First Circuit Says Doctor Knows Best When It Comes to Lab Test Necessity
The First Circuit reviewed a qui tam action alleging violations of the Anti-Kickback Statute and the False Claims Act due to the submission of claims for allegedly medically unnecessary tests to Medicare. The district court granted summary judgment in favor of the defendant, concluding that the relator failed to provide sufficient evidence that the defendant “knowingly” submitted false claims, because it relied on doctors’ orders to determine the medical necessity of the tests. The appellate court affirmed this decision, emphasizing that laboratories are generally entitled to rely on a doctor’s order to establish medical necessity, and the burden shifts to the FCA claimant to rebut this presumption. U.S. ex rel. Omni Healthcare Inc. v. MD Spine Solutions LLC
Hospitals Get Second Bite Out of Insurer
Several hospitals sought to recover payments for medical services provided to Cigna enrollees, claiming breach of express and implied contracts, and promissory estoppel. Initially, the trial court dismissed the hospitals’ claims, agreeing with Cigna’s argument that the claims were improperly repackaged violations of the Texas Insurance Code’s emergency care provisions, which do not allow for a private right of action. However, the Court of Appeals reversed this decision, finding that the hospitals’ amended petition did not allege emergency care claims and thus were not barred by the Insurance Code. The appellate court remanded the case for further proceedings, allowing the hospitals to pursue their claims for breach of contract and attorney’s fees. Dallas Medical Center v. CIGNA