The U.S. Court of Appeals for the Ninth Circuit gave a whistleblower the green light to try to prove her allegations that Gardens Regional Hospital and Medical Center in Hawaiian Gardens, California, billed Medicare for medically unnecessary admissions, often for residents from related nursing homes. The appeals court reversed a lower court’s finding that subjective medical judgments cannot be the basis for a False Claims Act (FCA) violation.

“We are not alone in concluding that a false certification of medical necessity can give rise to FCA liability,” the appeals court said in the March 23 ruling,^[1] referring to the Fifth, Third and Tenth Circuits.

The appeals court sent the complaint filed by the whistleblower, Jane Winter, the former director of care management at Gardens Regional, back to the lower court for further proceedings. Winter alleged the hospital adopted InterQual admission criteria and then admitted patients who didn’t meet the criteria.

Although case law is developing that an opinion is not immune from FCA liability, the degree of difficulty in disputing the opinion depends on the nature of the certification (e.g., medical necessity, hospice eligibility), said attorney Scott Stein, with Sidley Austin in Chicago. “The language of certification matters.” Whistleblowers still face an uphill battle “because well-meaning providers can and do disagree about those kinds of subjective determinations, and that kind of disagreement alone should not be the basis for False Claims Act liability,” Stein said. “There’s still plenty of room for providers to defend against such claims where there’s a reasonable basis or disagreement over whether that standard is satisfied. To take an extreme example, the court is not willing to say if a patient comes in with a migraine and the doctor decides to remove their lung, that’s immune from False Claims Act liability merely because it involves the doctor’s stated opinion about medical necessity.”