Supreme Court Declines to Address FCA Falsity Standard, Denying Cert in Cases from Third and Ninth Circuits

March 4, 2021Articles

The Supreme Court has declined to take up the issue of False Claims Act (FCA) “objective falsity” in relation to medical opinions, denying certiorari in paired cases from the Third Circuit (United States ex rel. Druding v. Care Alternatives, Inc.)[1] and Ninth Circuit (Winter ex rel. United States v. Gardens Reg’l Hosp. & Med. Ctr., Inc.).[2] With that, the Court let pass what some observers had seen as a circuit split[3] revealed by the two decisions together with the Eleventh Circuit’s holding half a year earlier in United States v. AseraCare, Inc.[4]

Because the FCA does not define “false,” the alleged falsity of statements of opinion has proven nettlesome for some courts. In decisions handed down just weeks apart last March, the two appellate panels reversed defense victories predicated on the “objective falsity” standard under the FCA, with both cases turning on whether a physician’s medical opinion can be “false” within the statute’s meaning.

In support of their allegations that the defendant hospice care provider falsely certified patients as terminally ill, the Druding relators (i.e., FCA qui tam or “whistleblower” plaintiffs) offered expert testimony. The expert opined that just over one-third of the terminal-illness certifications he analyzed in his sampling of the hospice’s records were unsupported by information in patient medical charts.[5] The district court granted summary judgment for the defendant based solely on falsity, finding that the only evidence supporting the relators’ case was their expert’s testimony—and a “mere difference of opinion between physicians, without more, is not enough to show falsity.”[6] The Third Circuit reversed, holding that “expert testimony that opines that accompanying patient certifications did not support patients’ prognoses of terminal illness” was sufficient to establish a triable issue as to falsity.[7]

In Winter, the relator alleged that the defendant hospital’s admissions surged after a new management company came on board, and the relator identified dozens of patients whose medical records allegedly did not meet the statutory and regulatory requirements for Medicare inpatient coverage.[8] The district court granted the motion to dismiss, finding the relator’s allegations were “based on subjective medical opinions that cannot be proven to be objectively false”[9] and therefore the relator failed to allege “an objectively false claim.”[10] The Ninth Circuit reversed, explaining that it is well established law that a medical certification can be false, “for the same reasons any opinion can be false or fraudulent”—including “if the opinion is not honestly held, or if it implies the existence of facts . . . that do not exist.”[11] In sum, Winter declined “to graft any type of ‘objective falsity’ requirement onto the FCA.”[12] 

Though both Druding and Winter revived relators’ complaints the respective district courts had dismissed, the two courts positioned themselves quite differently with regard to FCA jurisprudence on falsity. The difference emerged particularly starkly with respect to AseraCare. The Druding court expressed its disaccord with what it characterized, perplexingly, as AseraCare’s holding that “clinical judgments cannot be untrue.”[13] In Winter, by contrast, the Ninth Circuit took care to proclaim its holding “not directly . . . contrary” to that of AseraCare that “a clinical judgment of terminal illness” supporting Medicare hospice eligibility “cannot be deemed false, for purposes of the False Claims Act, when there is only a reasonable disagreement between medical experts as to the accuracy of that conclusion, with no other evidence to prove the falsity of the assessment.”[14]

The Winter court’s careful harmonization of its position with that of the Eleventh Circuit in AseraCare may have helped obviate the need for the Supreme Court to take up the FCA “objective falsity” question. Still, alongside those holdings, Druding sits somewhat uneasily. It is entirely possible that Druding is actually consistent with AseraCare, which holds that “expert testimony that no reasonable physician . . . could have” reached the conclusions at issue creates a triable issue of fact on falsity.[15] In any event, defendants forced to grapple with Druding should invoke the standards for falsity of opinions enunciated by the Supreme Court in Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund,[16] along the lines we indicated in our earlier analysis.[17]


[1] 952 F.3d 89 (3d Cir. 2020), cert. denied sub nom. Alternatives v. United States, No. 20-371, 2021 U.S. LEXIS 915 (Feb. 22, 2021). The case involved medical certifications of terminal illness, necessary for patients to be eligible for Medicare hospice benefits. Id. at 91.

[2] 953 F.3d 1108 (9th Cir. 2020), cert. denied sub nom. RollinsNelson LTC Corp. v. United States ex rel. Winters, No. 20-805, 2021 U.S. LEXIS 1045 (Feb. 22, 2021). The case involved certifications of medical necessity for inpatient hospital care. Id. at 1112–13. (In the case style of the Supreme Court’s denial of certiorari, relator Jane Winter’s surname appears as “Winters.”)

[3] See Patrick M. Hagan, Two Circuits Hold the FCA Does Not Require “Objective Falsity,” Creating Confusion on the Appropriate Standard (Mar. 31, 2020), Click here for article.

[4] 938 F.3d 1278 (11th Cir. 2019). At least two other circuits, the Sixth and Tenth, have held that medical opinions can be “false or fraudulent” within the meaning of the FCA, requiring objective criteria for the falsity of an opinion. See United States v. Paulus, 894 F.3d 267,275 (6th Cir. 2018); United States ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 741 (10th Cir. 2018).  Like Winter, see infra n.11 and accompanying text, Paulus and Polukoff both seem eminently harmonizable with the holding in AseraCare.

[5] Druding, 952 F.3d at 91.

[6] 346 F. Supp. 3d 669, 685 (D.N.J. 2018) (quoting United States v. AseraCare, Inc., 176 F. Supp. 3d 1282, 1283 (N.D. Ala. 2016)) (emphasis original with AseraCare district court).

[7] Druding, 952 F.3d at 95.

[8] Winter, 953 F.3d at 1119–20.

[9] United States ex rel. Winter v. Gardens Reg’l Hosp. & Med. Ctr., Inc., No. CV 14-088850-JFW, 2017 U.S. Dist. LEXIS 221356, at *20 (C.D. Cal. Dec. 29, 2017).

[10] Id. at *18.

[11] Winter, 953 F.3d at 1119 (citing United States ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 742–43 (10th Cir. 2018)).

[12] Id.

[13] Druding, 952 F.3d at 100 (quoting AseraCare, 938 F.3d 1278, 1297 (11th Cir. 2019)). Similarly puzzling was the panel’s rebuke of the district court for laying down what the panel termed “a bright-line rule that a doctor’s clinical judgment cannot be ‘false.’” Id. at 98. In both cases—AseraCare and the district court’s holding in Druding itself—the panel appeared to address itself more to a straw man than to the respective holdings themselves.

[14] Winter, 953 F.3d at 1118 (quoting AseraCare, 938 F.3d at 1281) (emphases added by Ninth Circuit).

[15] See AseraCare, 938 F.3d at 1297, 1305 n.18 (emphasis added). The characterization of the record diverged widely in  Druding: the district court stated that the relators’ expert testified “that 12 of the 15 patients identified in the Amended Complaint were actually appropriate for hospice for at least part of their stay and . . . that reasonable physicians could differ with his assessment,” 346 F. Supp. 3d at 688 (emphasis added); the Third Circuit panel, on the other hand, asserted without citation to the record that the relators’ expert testified “any reasonable physician would have reached the conclusion he reached,” 952 F.3d at 94 (emphasis added).

[16] 575 U.S. 175 (2015); see also City of Dearborn Heights Act 345 Police & Fire Ret. Sys. v. Align Tech., Inc., 856 F.3d 605, 615­­­–16 (9th Cir. 2017) (tracing the three ways a statement of opinion can be false under Omnicare). Omnicare concerns falsity of statements of opinion in the securities setting, but has also guided courts in other statutory contexts, including the FCA. See, e.g., Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989, 2004 (2016).

[17] See Patrick M. Hagan, supra n.3, last paragraph. Click here for article.