`
`In the
`Supreme Court of the United States
`
`ROLLINSNELSON LTC CORP., VICKI ROLLINS,
`AND WILLIAM NELSON,
`
`Petitioners,
`
`v.
`
`UNITED STATES OF AMERICA
`EX REL. JANE WINTER, et al.,
`
`Respondents.
`
`On PetitiOn fOr a Writ Of CertiOrari tO the United
`StateS COUrt Of aPPealS fOr the ninth CirCUit
`
`PETITION FOR A WRIT OF CERTIORARI
`
`Matthew D. UMhofer
`Counsel of Record
`KevIn J. MInnIcK
`SpertUS, LanDeS
`& UMhofer, LLp
`1990 South Bundy Drive,
`Suite 705
`Los Angeles, California 90025
`(310) 826-4700
`matthew@spertuslaw.com
`
`Counsel for Petitioner
`
`298930
`
`A
`
`(800) 274-3321 • (800) 359-6859
`
`
`
`i
`
`QUESTION PRESENTED
`
`This case turns on whether a Medicare reimbursement
`claim for inpatient hospital care can be alleged “false”
`under the False Claims Act (“FCA”) based solely on a
`post hoc review of medical records that disagrees with
`the admitting physician’s medical opinion. At issue here
`are the clinical judgments of several physicians, each
`expressing the view that inpatient hospital care was
`reasonable and necessary for a particular Medicare
`beneficiary. Medicare’s regulations directed those
`physicians to apply indeterminate and purposefully vague
`standards governing whether care was reimbursable.
`Indeterminate standards give providers the flexibility
`they need to supply covered healthcare to beneficiaries
`who present with an infinite array of ailments. By their
`nature, though, indeterminate standards are also subject
`to differing opinions and medical judgments, which are
`impossible in most circumstances to prove objectively
`false.
`
`Unfortunately, the lower courts have become
`irreconcilably split as to whether the FCA’s falsity element
`requires an objective falsehood, and therefore whether a
`difference of opinion over medical judgments is actionable.
`The decision below wrongly rejected the objective
`falsehood requirement, deepening and worsening the split.
`Healthcare professionals and Medicare providers deserve
`a unified national standard for falsity under the FCA.
`
`Thus, the question presented is: Whether the False
`Claims Act requires pleading and proof of an objectively
`false statement.
`
`
`
`ii
`
`PARTIES TO THE PROCEEDING
`
`The following list identifies all parties appearing here
`and in the United States Court of Appeals for the Ninth
`Circuit. See Supreme Court Rule 14.1(b). The petitioners
`here, and appellees below, are defendants RollinsNelson
`LTC Corp., Vicki Rollins, and William Nelson. The
`respondent here, and appellant below, is the United States
`of America ex rel. Jane Winter, a qui tam relator. The
`government has declined to intervene in this False Claims
`Act case under 31 U.S.C. § 3730(b)(2).
`
`The additional defendants named in the district
`court, but who are not party to this petition, are Gardens
`Regional Hospital and Medical Center, Inc., S&W Health
`Management Services, Inc., Beryl Weiner, Prode Pascual,
`Rafaelito Victoria, Arnold Ling, Cynthia Miller-Dobalian,
`Edgardo Binoya, Namiko Nerio, and Manuel Sacapano.
`
`
`
`iii
`
`CORPORATE DISCLOSURE STATEMENT
`
`Petitioner RollinsNelson LTC Corp. states under
`Supreme Court Rule 29.6 that it has no corporate parent
`and that no publicly held company owns ten percent or
`more of its stock.
`
`
`
`iv
`
`RELATED PROCEEDINGS
`
`• United States ex rel. Winter v. Gardens Reg’l Hosp.
`& Med. Ctr., Inc., No. CV 14-08850-JFW, U.S.
`District Court for the Central District of California.
`Judgement date Dec. 29, 2017.
`
`• Winter v. Gardens Reg’l Hosp. & Med. Ctr., No. 18-
`55020, U.S. Court of Appeals for the Ninth Circuit.
`Judgment entered Mar. 23, 2020.
`
`
`
`v
`
`QUESTION PRESENTED . . . . . . . . . . . . . . . . . . . . . . . i
`
`PARTIES TO THE PROCEEDING . . . . . . . . . . . . . . . ii
`
`CORPORATE DISCLOSURE STATEMENT . . . . . . iii
`
`RELATED PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . iv
`
`TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . .v
`
`TABLE OF APPENDICES . . . . . . . . . . . . . . . . . . . . . vii
`
`TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . viii
`
`PETITION FOR A WRIT OF CERTIORARI. . . . . . . .1
`
`OPINIONS BELOW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`JURISDICTIONAL STATEMENT . . . . . . . . . . . . . . . .1
`
`RELEVANT STATUTES AND REGULATIONS . . . .2
`
`STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . .2
`
`A. The Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`B. Respondent’s False Claims Act Theory . . . . . . . .3
`
`C. The District Court’s Dismissal . . . . . . . . . . . . . . .5
`
`TABLE OF CONTENTS
`
`Page
`
`
`
`vi
`
`D. The Ninth Circuit’s Reversal. . . . . . . . . . . . . . . . .7
`
`REASONS FOR GRANTING THE PETITION. . . . .10
`
`I. The Decision Below Deepens and Worsens a
`
`Recent Circuit Split. . . . . . . . . . . . . . . . . . . . . . . .11
`
`II. This Dispute Is An Opportune Case For
`Resolving This Exceptionally Important
`Question . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
`
`
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
`
`Table of Contents
`
`Page
`
`
`
`vii
`
`A P PEN DI X A — OPI N ION OF T H E
`U N I T E D S T A T E S C O U R T O F
`APPEALS FOR THE NINTH CIRCUIT,
` FILED MARCH 23, 2020 . . . . . . . . . . . . . . . . . . . . . .1a
`
`APPENDIX B — OPINION OF THE UNITED
`STATES DISTRICT COURT FOR THE
`CENTRAL DISTRICT OF CALIFORNIA,
` FILED DECEMBER 29, 2017 . . . . . . . . . . . . . . . . .28a
`
`A P PEN DI X C — OR DER DEN Y I NG
`REHEARING OF THE UNITED STATES
`COURT OF APPEALS FOR THE NINTH
` CIRCUIT, FILED JULY 6, 2020 . . . . . . . . . . . . . .52a
`
`A P P E N D I X D — S T A T U T E S A N D
` REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .54a
`
`TABLE OF APPENDICES
`
`Page
`
`
`
`viii
`
`CASES
`
`Azar v. Allina Health Servs.,
`
`139 S. Ct. 1804 (2019). . . . . . . . . . . . . . . . . . . . . . . . . .21
`
`Cafasso v. Gen. Dynamics C4 Sys., Inc.,
`
`637 F.3d 1047 (9th Cir. 2011) . . . . . . . . . . . . . . . . . . . .16
`
`Hagood v. Sonoma Cty. Water Agency,
`81 F.3d 1465 (9th Cir. 1996). . . . . . . . . . . . . . . . passim
`
`
`Hagood v. Sonoma Cty. Water Agency,
`
`302 F.3d 637 (6th Cir. 2002) . . . . . . . . . . . . . . . . . . . .14
`
`United States ex rel. Berg v.
`Honeywell Int’l, Inc.,
`740 F. App’x 535 (9th Cir. 2018), cert. denied,
`139 S. Ct. 1456 (2019) . . . . . . . . . . . . . . . . . . . . . .6, 8, 15
`
`
`
`
`United States ex rel. Clausen v.
`Lab. Corp. of Am.,
`290 F.3d 1301 (11th Cir. 2002). . . . . . . . . . . . . . . . . . .16
`
`
`
`United States ex rel. Druding v.
`Care Alternatives,
`952 F.3d 89 (3d Cir. 2020) . . . . . . . . . . . . . . . . . passim
`
`
`
`United States ex rel. Englund v.
`Los Angeles County,
` No. CIV. S-04-282 LKKJFM, 2006 WL 3097941
`
`(E.D. Cal. Oct. 31, 2006) . . . . . . . . . . . . . . . . . . . . . . . .6
`
`TABLE OF CITED AUTHORITIES
`
`Page
`
`
`
`ix
`
`United States ex rel. Polukoff v.
`St. Mark’s Hospital,
`895 F.3d 730 (10th Cir. 2018). . . . . . . . . . . . . . . . . .9, 14
`
`
`
`United States ex rel. Presser v.
`Acacia Mental Health Clinic, LLC,
`836 F.3d 770 (7th Cir. 2016). . . . . . . . . . . . . . . . . . . . .13
`
`
`
`United States ex rel. Riley v.
`St. Luke’s Episcopal Hospital,
`355 F.3d 370 (5th Cir. 2004) . . . . . . . . . . . . . . . . . . . .15
`
`
`
`United States ex rel. Roby v. Boeing Co.,
`
`100 F. Supp. 2d 619 (S.D. Ohio 2000) . . . . . . . . . . . . .14
`
`United States ex rel. Wilson v.
`Kellogg Brown & Root, Inc.,
`525 F.3d 370 (4th Cir. 2008). . . . . . . . . . . . . . . . . .12, 15
`
`
`
`United States ex rel. Yannacopoulos v.
`Gen. Dynamics,
`652 F.3d 818 (7th Cir. 2011) . . . . . . . . . . . . . . . . . . . . .13
`
`
`
`United States v. AseraCare, Inc.,
`
`176 F. Supp. 3d 1282 (N.D. Ala. 2016) . . . . . . . . . . . .14
`
`United States v. AseraCare, Inc.,
`938 F.3d 1278 (11th Cir. 2019) . . . . . . . . . . . . . . passim
`
`
`United States v. Paulus,
`
`894 F.3d 267 (6th Cir. 2018). . . . . . . . . . . . . . . . . . . . .14
`
`Cited Authorities
`
`Page
`
`
`
`x
`
`United States v. Prabhu,
`
`442 F. Supp. 2d 1008 (D. Nev. 2006). . . . . . . . . . . . . . .6
`
`Universal Health Services, Inc. v.
`United States ex rel. Escobar,
`136 S. Ct. 1989 (2016) . . . . . . . . . . . . . . . . . . . .3, 7, 8, 21
`
`
`
`STATUTES
`
`28 U.S.C. § 1254(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`31 U.S.C. § 3729(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`31 U.S.C. § 3729(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`31 U.S.C. § 3729(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`31 U.S.C. § 3729(a)(1)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`31 U.S.C. § 3730(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`31 U.S.C. § 3730(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
`
`42 U.S.C. § 1395y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`42 U.S.C. § 1395y(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . .3
`
`Cited Authorities
`
`Page
`
`
`
`xi
`
`REGULATIONS
`
`42 C.F.R. § 412.3(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`42 C.F.R. § 412.3(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . .4, 18
`
`42 C.F.R. § 412.3(d)(1)(i) . . . . . . . . . . . . . . . . . . . . . . . .4, 19
`
`42 C.F.R. § 412.3(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . .4, 18
`
`42 C.F.R. § 418.22(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . .17
`
`Cited Authorities
`
`Page
`
`
`
`1
`
`PETITION FOR A WRIT OF CERTIORARI
`
`Petitioners RollinsNelson LTC Corp., Vicki Rollins,
`and William Nelson respectfully petition this Court for
`a writ of certiorari to review the decision of the United
`States Court of Appeal for the Ninth Circuit in this case.
`
`OPINIONS BELOW
`
`The decision of the court of appeals is published as
`Winter v. Gardens Reg’l Hosp. & Med. Ctr., 953 F.3d
`1108, 1113 (9th Cir. 2020), and is reprinted at Pet. App.
`1a. The order of the court of appeals denying rehearing
`and rehearing en banc is reprinted at Pet. App. 52a.
`The district court’s unpublished opinion dismissing
`respondent’s complaint is available on Westlaw at United
`States ex rel. Winter v. Gardens Reg’l Hosp. & Med. Ctr.,
`Inc., No. CV 14-08850-JFW (Ex), 2017 WL 8793222, at *1
`(C.D. Cal. Dec. 29, 2017), and is reprinted at Pet. App. 28a.
`
`JURISDICTIONAL STATEMENT
`
`The United States Court of Appeals for the Ninth
`Circuit entered its opinion and judgment on March 23,
`2020. Petitioner filed a petition for rehearing and for
`rehearing en banc on April 6, 2020, which the court of
`appeals denied on July 15, 2020. On March 19, 2020, this
`Court ordered that “the deadline to file any petition for
`a writ of certiorari due on or after the date of this order
`is extended to 150 days from the date of the lower court
`judgment, order denying discretionary review, or order
`denying a timely petition for rehearing.” (Order of Mar.
`19, 2020.) This Court has jurisdiction under 28 U.S.C.
`§ 1254(1).
`
`
`
`2
`
`RELEVANT STATUTES AND REGULATIONS
`
`The relevant provisions of 31 U.S.C. § 3729(a)(1), 42
`U.S.C. § 1395y, and 42 C.F.R. § 412.3(d) are reprinted at
`Pet. App. 54a-55a, 60a-127a, and 128a-130a respectively.
`
`STATEMENT OF THE CASE
`
`A. The Parties
`
`Petitioners owned fifty percent of the hospital
`management company that oversaw operations at Gardens
`Regional Hospital and Medical Center, Inc., otherwise
`known as Tri-City Regional Medical Center (“Tri-City”).
`Pet. App. 9a. Tri-City, now bankrupt, is a non-profit, acute
`care hospital with inpatient and outpatient services. Pet.
`App. 30a. The other defendants named in the district
`court, who are not petitioners here, are the other owners of
`the hospital management company and several attending
`physicians with admitting privileges at Tri-City. Id.
`
`Respondent Jane Winter is a registered nurse who
`began working in the Tri-City emergency room on August
`11, 2014. Her employment was terminated on November 6,
`2014. Respondent filed her False Claims Act lawsuit under
`seal on November 14, 2014 in the United States District
`Court for the Central District of California, invoking the
`statute’s qui tam provisions, 31 U.S.C. § 3730(b), which
`allow private plaintiffs to sue on behalf of the government
`under certain circumstances and to keep a share of the
`proceeds if successful. Pet. App. 36a. After conducting a
`“thorough investigation” of the allegations in the sealed
`complaint, the government declined to intervene on March
`16, 2017. Pet. App. 37a.
`
`
`
`3
`
`B. Respondent’s False Claims Act Theory
`
`The FCA’s remedies, which include treble damages
`and per-violation civil penalties, are “essentially punitive
`in nature.” Universal Health Servs., 136 S. Ct. at 1996
`(citation omitted). Those steep remedies attach to any
`person who knowingly presents or causes to be presented
`a false claim for payment or anyone who knowingly makes,
`uses, or causes to be made or used, a false record or
`statement material to a false claim. 31 U.S.C. §§ 3729(a)
`(1)(A)-(B). The FCA also provides for conspiracy liability.
`31 U.S.C. § 3729(a)(1)(C). Respondent alleged all of those
`theories here.
`
`Respondent’s allegations are about Medicare’s
`reimbursement requirement for inpatient hospital
`treatment. Medicare generally reimburses inpatient care
`at higher amounts than outpatient care. The operative
`pleading (Respondent’s Second Amended Complaint)
`alleges that Petitioners submitted false claims, or caused
`them to be submitted, by certifying the medical necessity
`of inpatient hospital admissions at Tri-City. Respondent
`identified approximately 65 such claims. Pet. App. 10a.
`There is no allegation that Petitioners or Tri-City failed
`to actually deliver inpatient care. Respondent argues only
`that the treatment was not reimbursable. Id.
`
`The applicable statutory scheme requires that
`inpatient admissions be “reasonable and necessary for
`the diagnosis or treatment of illness or injury or to
`improve the functioning of a malformed body member[.]”
`42 U.S.C. § 1395y(a)(1)(A). Regulations further provide
`that inpatient treatment “is generally appropriate for
`payment under Medicare Part A when the admitting
`
`
`
`4
`
`physician expects the patient to require hospital care
`that crosses two midnights,” or if other circumstances
`requiring inpatient care are “supported by the medical
`record.” 42 C.F.R. § 412.3(d)(1), (3) (emphasis added); Pet.
`App. 60a and 128a-130a.
`
`This regulatory requirement is sometimes called
`the “two-midnight rule.” See Pet. App. 35a. To guide the
`admitting physician in developing his or her “expectation”
`in relation to the two-midnight rule, the regulation
`provides this, and only this:
`
`The expectation of the physician should be
`based on such complex medical factors as
`patient history and comorbidities, the severity
`of signs and symptoms, current medical needs,
`and the risk of an adverse event. The factors
`that lead to a particular clinical expectation
`must be documented in the medical record in
`order to be granted consideration.
`
`42 C.F.R. § 412.3(d)(1)(i) (emphasis added). Importantly,
`these regulations do not require the physician to amass
`a medical record that proves the patient will require care
`spanning two midnights. It is enough for the physician
`to develop an expectation based on complex medical
`factors documented in the patient’s record. Put simply,
`the framework asks for an informed clinical opinion, not
`a certification of objective fact.
`
`Respondent alleged that Tri-City physicians certified
`the necessity of all the relevant inpatient admissions,
`whereas her own after-the-fact review of patient
`records yielded a different conclusion. (Pet. App. 31a.)
`
`
`
`5
`
`Respondent’s review allegedly concluded that each
`admission was medically unnecessary, resulting in false
`claims to Medicare under an “implied false certification”
`theory. Pet. App. 40a. But she made that determination not
`by independently applying her understanding of “complex
`medical factors” or the two-midnight rule. Id.
`
`Instead, Respondent “observed that Defendants . . .
`admitted or caused to be admitted a significant number
`of patients from skilled nursing facilities owned by
`[Respondents] that did not meet inpatient hospital
`admission criteria, as objectively determined with the
`applicable InterQual criteria—criteria that CMS uses
`when auditing or inspecting hospitals.” (Respondent’s
`Second Amended Complaint ¶ 56 (emphasis added).)1
`The “InterQual Criteria” are published by a third party,
`McKesson Health Solutions, LLC, and are not promulgated
`or formally adopted by any Medicare authority. Pet. App.
`31a. Nevertheless, Respondent asserts that claims for
`payment are false if the underlying hospital admission
`diverges from the InterQual criteria, as she applied them
`during her review of the cold files. Pet. App. 32a.
`
`C. The District Court’s Dismissal
`
`Petitioners and other defendants moved to dismiss
`on the grounds that (a) Respondent had not alleged an
`objectively false claim for payment and (b) the allegedly
`false certifications were not material to the government’s
`payment decision as a matter of law. Pet. App. 41a. The
`district court granted the motions in their entirety. Id.
`
`1. CMS refers to the Centers for Medicare and Medicaid
`Services, the subdivision of the Department of Health and Human
`Services that administers Medicare. Pet. App. 6a.
`
`
`
`6
`
`First, as the district court accurately acknowledged,
`Respondent’s “contention that the medical provider’s
`certifications were false is based on her own after-the-
`fact review of Tri-City’s admission records.” Id. The
`district court applied the Ninth Circuit’s holding in
`Hagood v. Sonoma Cty. Water Agency, 81 F.3d 1465,
`1477-78 (9th Cir. 1996), to this contention and found
`Respondent’s allegations insufficient. Like many courts
`before it, the district court read Hagood to require a
`plaintiff to allege “that a defendant knowingly made
`an objectively false representation to the Government
`that caused the Government to remit payment.” Pet.
`App. 42a.2 Respondent’s allegations, however, identified
`at most a “difference of opinion.” Id. The mere “fact
`that [Respondent] reached a different conclusion on the
`issue of medical necessity does not render the provider’s
`certification false.” Id. Instead, the district court
`concluded that Respondent’s allegations were “based on
`
`2. District courts in the Ninth Circuit, and even the Ninth
`Circuit itself, had routinely interpreted Hagood as requiring an
`objectively false statement for FCA liability to attach. See, e.g.,
`United States ex rel. Berg v. Honeywell Int’l, Inc., 740 F. App’x 535,
`537 (9th Cir. 2018), cert. denied 139 S. Ct. 1456 (2019). (affirming
`summary judgment in defendant’s favor because “[t]he scope of
`Honeywell’s statements and the qualifications upon them were
`sufficiently clear, so that the statements—so qualified—were not
`objectively false or fraudulent.”) (emphasis added); United States v.
`Prabhu, 442 F. Supp. 2d 1008, 1032-33 (D. Nev. 2006) (“[P]laintiff
`must demonstrate that an objective gap exists between what the
`Defendant represented and what the Defendant would have stated
`had the Defendant told the truth”); United States ex rel. Englund
`v. Los Angeles County, No. CIV. S-04-282 LKKJFM, 2006 WL
`3097941, at *10 (E.D. Cal. Oct. 31, 2006) (“It is well established
`in this Circuit and elsewhere that imprecise statements or
`differences in interpretation growing out of a disputed legal
`question are not false under the FCA.”).
`
`
`
`7
`
`subjective medical opinions that cannot be proven to be
`objectively false.” Id.
`
`Respondent’s reliance on the InterQual criteria could
`not satisfy the objective falsehood requirement either. The
`district court explained that the private InterQual criteria
`are not Medicare’s interpretation of the ultimate payment
`standard. Rather, they purport to be a “collection of data”
`that “represent a consensus of medical opinions.” Id.
`Respondent’s reliance on such a collection of third-party
`medical opinions, even if they proved to disagree with Tri-
`City’s admission decisions, could “not demonstrate that the
`providers’ certifications that the admissions and relevant
`services were medically necessary were objectively false.”
`Id. Put differently, InterQual’s compendium of opinions,
`even if in Respondent’s favor, still established only a
`difference of opinion, not any objectively false statement.
`
`Second, the district court applied this Court’s holding
`in Universal Health Services., Inc. v. United States ex
`rel. Escobar, 136 S. Ct. 1989, 2001 (2016), and found the
`allegedly false certifications immaterial as a matter of law.
`
`The district court therefore dismissed Respondent’s
`FCA allegations, including her claim that Respondents
`conspired to violate the FCA, without leave to amend.
`Pet. App. 44a. Although Respondent’s claim for retaliation
`under 31 U.S.C. § 3730(h) survived the motion, Respondent
`voluntarily dismissed that claim to enable her appeal to
`the Ninth Circuit. Pet. App. 12a n.6.
`
`D. The Ninth Circuit’s Reversal
`
`The court of appeals held that the FCA does not
`require a plaintiff to plead an objective falsehood and that
`
`
`
`8
`
`implied certifications of medical necessity are material
`because they are a condition of payment. Pet. App. 19a.
`
`First, the court of appeals held that “the FCA
`imposes liability for all ‘false or fraudulent claims’—it
`does not distinguish between ‘objective’ and ‘subjective’
`falsity or carve out an exception for clinical judgments
`and opinions.” Pet. App. 15a. Remarkably, the court of
`appeals failed even to mention its Hagood decision, which
`the district court correctly cited as requiring an objective
`falsehood.3 Hagood had since 1996 directed the many
`lower courts of the Ninth Circuit that reasonable disputes
`about the application of indeterminate legal standards are
`not “false” in the sense intended by the FCA, even if the
`defendant’s application is later seen as reaching the wrong
`result. Hagood, 81 F.3d at 1477; Berg, 740 F. App’x at 537.
`The court of appeals departed from that established rule
`without a direct explanation.
`
`The court of appeals also acknowledged the obvious
`concerns about rampant liability for honestly held medical
`judgments, and struggled to meet those concerns by
`pivoting to other elements. Any concerns about open-
`ended liability attaching to the difficult application of
`indeterminate hospital admission standards should be
`addressed using the materiality and scienter elements
`under Universal Health Services, 136 S. Ct. at 2001, not
`by distinguishing between objectively false certifications
`and mere differences in medical judgments, the court of
`appeals held. Pet. App. 15a.
`
`3. Petitioners raised this irregularity in their petition for
`rehearing en banc, but the court of appeals declined to amend its
`opinion. Pet. App. 53a.
`
`
`
`9
`
`In other words, an alleged disagreement with a
`doctor’s clinical judgment to admit a Medicare beneficiary
`for inpatient care satisfies the FCA’s falsity element, and
`leaves the parties to litigate scienter and materiality. Thus,
`Respondent had stated an FCA claim by her allegation
`that Tri-City’s admissions failed to satisfy the admission
`criteria as applied by Respondent, an ER nurse, despite
`the physicians’ judgments to the contrary. Pet. App. 21a.
`
`The court of appeals also expressly joined the Third
`and Tenth Circuits in “rejecting the ‘bright-line rule
`that a doctor’s clinical judgment cannot be ‘false’” in the
`sense intended by the FCA. Pet. App. 17a (citing United
`States ex rel. Druding v. Care Alternatives, 952 F.3d at
`89, 100 (3d Cir. 2020) and United States ex rel. Polukoff
`v. St. Mark’s Hospital, 895 F.3d 730, 742 (10th Cir. 2018)).
`In doing so, the court of appeals questioned the Eleventh
`Circuit’s holding that “‘a claim that certifies that a patient
`is terminally ill . . . cannot be “false”—and thus cannot
`trigger FCA liability—if the underlying clinical judgment
`does not reflect an objective falsehood,’” but suggested
`that the Eleventh Circuit rule may not ultimately be
`inconsistent with its holding. Pet. App. 17a (quoting United
`States v. AseraCare, Inc., 938 F.3d 1278, 1296-97 (11th
`Cir. 2019).4
`
`Second, although not relevant to this Petition, the
`court of appeals also held that “a false certification
`of medical necessity can be material.” Pet. App. 24a.
`Petitioner sought rehearing and rehearing en banc, which
`the court of appeals denied. Pet. App. 53a.
`
`4. As explained in further detail below, the court of appeals’
`attempt to harmonize its reversal with the Eleventh Circuit’s
`AseraCare holding is not persuasive.
`
`
`
`10
`
`REASONS FOR GRANTING THE PETITION
`
`The decision below joined the wrong side of a
`deepening circuit split. The Eleventh Circuit recently
`affirmed that the FCA’s falsity element requires an
`objectively false statement, following the Fourth and
`Seventh Circuits. Shortly after the Eleventh Circuit
`ruled, the Third Circuit rejected the objective falsehood
`requirement on facts indistinguishable from that Eleventh
`Circuit case, expressly acknowledging that it was creating
`a split of authority. The Tenth Circuit appears to agree
`with the Third Circuit, but the Fifth and Sixth Circuits
`have articulated holdings so unclear that they are cited
`by both sides of the split.
`
`The decision below exacerbates this confusion by
`joining the Third Circuit in rejecting the objective
`falsehood requirement—despite Ninth Circuit precedent
`that has been cited for decades as supporting the
`objective falsehood requirement. Still more confusing,
`the court of appeals tried unconvincingly to harmonize
`its holding with the Eleventh Circuit’s affirmation of the
`objective falsehood requirement, muddying the waters
`by suggesting there is no circuit split after all. Only
`this Court’s intervention can reconcile this morass of
`conflicting standards.
`
`This dispute also presents the right vessel for
`resolving the split. Respondent’s FCA theory depends
`on an alleged difference of opinion: Tri-City’s physicians
`versus Respondent and her post hoc application of the
`medical opinions memorialized in the InterQual criteria.
`The resolution of the split is therefore key to correct
`resolution of this case, and a reversal of the decision below
`
`
`
`11
`
`would dispose of Respondent’s FCA allegations entirely.
`More broadly, the question presented is exceptionally
`important, and it merits immediate review, without
`awaiting yet another circuit court to further destabilize
`the law without any hope of resolving the irreconcilable
`positions of the courts of appeals already on record.
`Medicare payment rules, even the purposefully vague
`ones, apply nationally, and the FCA’s punitive remedies
`weigh heavily on practitioners and providers. A uniform,
`national answer to whether the FCA penalizes differences
`in medical judgment is sorely needed.
`
`The question presented here is also closely related
`to the pending Petition for a Writ of Certiorari filed in
`Care Alternatives v. United States ex rel. Druding, No.
`20-371. The Third Circuit’s holding in Care Alternatives
`is at the core of the circuit split identified in this Petition,
`and the Care Alternatives petition cites the Ninth
`Circuit’s decision below as evidence that “the courts of
`appeal are in open disarray over when opinions, such as
`a physician’s clinical judgment about life expectancy or
`the necessity of treatment, can be deemed ‘false’ under
`the FCA.” Care Alternatives Pet. at 21. Accordingly,
`Petitioners respectfully submit that, to the extent the Care
`Alternatives petition is granted, this Petition be granted
`along with it to resolve the related questions together.
`
`I. The Decision Below Deepens and Worsens a Recent
`Circuit Split.
`
` A. The lower courts have become irreconcilably
`split as to whether the FCA’s falsity element requires an
`objective falsehood, and therefore whether a difference
`of opinion over medical judgments is actionable. On the
`
`
`
`12
`
`correct side of the split is the Eleventh Circuit’s AseraCare
`decision. 938 F.3d 1278 (11th Cir. 2019). In AseraCare,
`the government challenged a hospice facility’s claims for
`Medicare reimbursement for end-of-life hospice care. The
`facility’s medical professionals had determined in their
`judgment that particular patients were “terminally ill,”
`which is the prerequisite for triggering Medicare coverage
`in that context. Id. at 1289. The government alleged that
`these certifications were false because they were made
`“on the basis of erroneous clinical judgments that those
`patients were terminally ill.” Id. at 1281 (emphasis added).
`A battle of the experts ensued, in which the government’s
`medical expert testified after reviewing the cold patient
`records that “in his opinion, the patients were not
`terminally ill.” Id. at 1287.
`
`Importantly, the Eleventh Circuit acknowledged
`that a physician’s terminal illness diagnosis is, at root, a
`statement of his or her medical opinion, not an assertion
`of fact. Id. at 1296-97. Such a medical opinion “cannot
`be ‘false’—and thus cannot trigger FCA liability—if the
`underlying clinical judgment does not reflect an objective
`falsehood.” Id. (emphasis added). As a result, “a reasonable
`difference of opinion among physicians reviewing medical
`documentation ex post is not sufficient on its own to
`suggest that those judgments—or any claims based on
`them—are false under the FCA.” Id. at 1297.
`
`The Eleventh Circuit agrees with the Fourth and
`Seventh Circuits. The Fourth Circuit has long held the
`FCA’s falsity element to require objective falsehood.
`United States ex rel. Wilson v. Kellogg Brown & Root,
`Inc., 525 F.3d 370, 376 (4th Cir. 2008) (“To satisfy this first
`element of an FCA claim, the statement or conduct alleged
`
`
`
`13
`
`must represent an objective falsehood.”). The Seventh
`Circuit also requires an objective falsehood and therefore
`rejects allegations that turn only on differences between
`the judgment of the qui tam relator and the defendant.
`United States ex rel. Yannacopoulos v. Gen. Dynamics,
`652 F.3d 818, 836 (7th Cir. 2011) (“A statement may be
`deemed ‘false’ for purposes of the False Claims Act only
`if the statement represents ‘an objective falsehood.’”)
`(citation omitted); United States ex rel. Presser v. Acacia
`Mental Health Clinic, LLC, 836 F.3d 770, 780 (7th Cir.
`2016) (“Many potential relators could claim that ‘in my
`experience, this is not the way things are done.’ . . . Ms.
`Presser’s subjective evaluation, standing alone, is not a
`sufficient basis for a fraud claim.”) (emphasis added).
`
`On the other side of the split is the Third Circuit’s Care
`Alternatives holding, for which a petition for certiorari
`is pending. The Care Alternatives case presented the
`same facts as the Eleventh Circuit’s AseraCare case, i.e.,
`a hospice facility whose doctors had diagnosed terminal
`illnesses and a battle of the experts as to whether those
`certifications were in error. 952 F.3d at 94. But the Third
`Circuit expressly rejected any requirement for “objective
`falsity.” Id. at 96. Notably, the Third Circuit did not hold
`that a physician’s terminal illness diagnosis constituted a
`statement of fact. Instead, it held that “medical opinions
`may be ‘false’ and an expert’s testimony challenging a
`physician’s medical opinion can be appropriate evidence
`for the jury to consider on the question of falsity.” Id. at
`98. Parting with the Eleventh Circuit (and with the Fourth
`and Seventh, albeit silently) the Third Circuit concluded
`that a “difference of medical opinion is enough evidence
`to create a triable dispute of fact regarding FCA falsity.”
`Id. at 100.
`
`
`
`14
`
`The Third Circuit cited the Tenth Circuit’s holding in
`United States ex rel. Polukoff v. St. Mark’s Hospital, 895
`F.3d 730 (10th Cir. 2018), with approval. That case, like the
`decision below, addressed a medical opinion that services
`were “reasonable and necessary.” The Tenth Circuit held
`that “a doctor’s certification to the government that a
`procedure is ‘reasonable and necessary’ is ‘false’ under the
`FCA if the procedure was not reasonable and necessary
`under the government’s definition of the phrase.” Id. at
`743. Both the third Circuit and the decision below cited
`Polukoff as authority for rejecting the objective falsehood
`requirement.
`
`The Fifth and Sixth Circuits have not taken clear
`positions on the objective falsehood requirement, adding
`to the confusion in the lower courts. For instance, although
`both the decision below and the Third Circ