WBK Industry News - Litigation Developments

Supreme Court Leaves in Place 5th Circuit’s Ruling on the Use of Statistical Data in False Claims Act Complaints

The Supreme Court denied a relator’s petition to review a decision by a panel of the U.S. Court of Appeals for the Fifth Circuit, which held that the relator had not alleged a false claim for the purposes of the False Claims Act (FCA) by using statistical data when that data is also consistent with a “legal and obvious alternative.”

The Fifth Circuit panel had affirmed the district court’s order granting a hospital’s motion to dismiss an FCA complaint that was dependent on a statistical analysis of the hospital’s coding of diagnoses for Medicare reimbursements.  The relator claimed that the hospital was providing unnecessary medical care to boost its reimbursements.  In support, the relator alleged that during a six-year period, the hospital coded certain diagnoses at a rate that was consistent with fraudulent coding.  However, the allegations showed that the coding rate was also consistent with the hospital adopting guidance from the Centers for Medicare and Medicaid Services more quickly than other hospitals, which showed similar coding rates in subsequent years.  The relator had therefore not pled a false or fraudulent claim with the required specificity. 

The Fifth Circuit panel emphasized that its ruling did not foreclose the use of statistical data to plead a false claim under the FCA, when paired with particular details concerning the alleged fraudulent activity.