Do you have to prove every single false claim in a large, complex qui tam False Claims Act case, or can you simplify your burden of proof by using EXTRAPOLATION EVIDENCE? This is a very important, hotly contested and evolving legal issue that appears to be heading in favor of relators and the Government.
Recently, this question was addressed by a federal district judge in the Eastern District of Tennessee, in US ex rel. Martin v. Life Care Centers of America, Inc., Case No. 1:08-cv-251. There, the Government wanted to use statistical sampling to show that the defendant, which owned 200 skilled nursing facilities (SNFs), was defrauding Medicare, Medicaid and TRICARE on a large scale by keeping patients in its facilities for longer than was medically necessary, and for other forms of billing misconduct. Specifically, the Government wanted to focus on only 400 patient admissions at 82 centers to establish both liability and damages across the board. Defendant Life Care Centers of America opposed the use of statistical sampling and extrapolation for liability purposes.
After reviewing the legal landscape of cases permitting or denying the use of extrapolation methodology, the Tennessee judge sided with the Government. He appears to be have been greatly influenced by the “sheer scale” of the Medicare program in terms of size and complexity, as well as “the large number of claims that can be submitted by a single entity to be reimbursed by Medicare.” According to the judge, it simply “is often not practicable to do a claim-by-claim review of each allegedly false claim in a complex FCA action.”
Practical pointer: In an appropriate case, it may make sense for relator’s counsel to retain an expert who can devise a sound method for obtaining a statistically representative sample of claims and then extrapolate from those samples to establish both liability and damages.
