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10th Circuit Finds that Doctor’s Judgment is Not Automatically Reasonable and Necessary

Posted  July 20, 2018
By Sarah “Poppy” Alexander

By Poppy Alexander

Top-level heart surgeons work in a rarified world, where few may question their medical judgment. Yet that judgment is not infallible-and its presence is not in itself a protection against False Claims Act liability. The Tenth Circuit recently held as much in United States ex rel. Polukoff v. St. Mark’s Hospital et al., finding that a doctor may be exercising medical judgment while still submitting false claims to Medicare or Medicaid. This decision comes on the heels of a similar Sixth Circuit decision in United States v. Paulus, showing a clear trend among circuit courts to consider the issue.

In Polukoff, Drs. Polukoff and Sorensen, both heart surgeons, worked together at two Utah hospitals. Dr. Sorensen was renowned for a particular kind of heart surgery known as PFO closure, which helps close leaky heart valves that can cause heart troubles and strokes. Dr. Polukoff went to work under Dr. Sorensen to learn the procedure-but instead was horrified by what he found. According to the False Claims Act complaint he subsequently filed, Dr. Sorensen allegedly performed an outlandishly large number of PFO closures in violation of industry and hospital standards, and used the procedure to treat symptoms (namely, migraines) that the medical community does not believe are helped by the surgery. Because Medicare and Medicaid will not cover PFO closures except when medically indicated, Dr. Sorensen would represent that the procedures were to treat a certain kind of stroke, even when they were not. The district court dismissed Dr. Polukoff’s claims, finding that Dr. Sorensen’s medical judgment that the procedures were, in fact, necessary meant that the claims he submitted could not “false or fraudulent” as required by the FCA.

The Tenth Circuit reversed. Medicare requires all billings to be “reasonable and necessary.” Medicare provides guidance about what this phrase means. Reasonable and necessary services are safe, effective, not experimental, and appropriate for the patient and the circumstances. Dr. Sorensen’s use of the procedure outside the scope of any medically indicated condition-despite his stated belief that the procedure would help-does not meet these standards. Just because Dr. Sorensen may have thought the surgeries reasonable did not make them so. And in submitting his claims for payment, Dr. Sorensen certified that every service for which he billed the government was “medically indicated and necessary for the health of the patient.” Because this was not true, Dr. Sorensen submitted “legally false” claims for payment.

The appeals court provided three reasons for other courts to consider why a doctor’s medical judgment could false or fraudulent under the FCA:

  • The FCA is read broadly as a public good that helps the government reclaim fraudulently obtained money;
  • An opinion can still be false, even when it is an allegedly expert opinion; and
  • Medical judgment does not contradict the standard rule that medically unnecessary treatment can be the basis for a false claim.

Not only doctors are accountable for submitting unreasonable and unnecessary claims. The court found that the relator had sufficiently alleged facts suggesting that Dr. Sorensen’s two hospitals were well aware of Dr. Sorensen’s practices and submitted the bills to the government regardless. This knowing submission of false claims puts them on the hook as well.

Going forward, doctors, and the hospitals that employ them, need to be careful not to assume that their medical judgment will shield them from fraud liability. That judgment alone is not enough, if it is not grounded in the basic medical principles encompassed in the “reasonable and necessary” standard.

If you have any information about unreasonable or unnecessary medical care being billed to the government, please contact us.

Tagged in: Court Decision, FCA Federal, Healthcare Fraud, Lack of Medical Necessity, Medicare, Provider Fraud,

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