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A claim is false under the False Claims Act only where a party certifies compliance with a statute or regulation as condition to governmental payment, the 2nd U.S. Circuit Court of Appeals ruled Wednesday. Joining four other circuits in adopting that standard for claims under the act, the court said “not all instances of regulatory noncompliance will cause a claim to be false.” The ruling came in a case involving Patricia Mikes, who sued a medical group of pulmonary and critical care doctors alleging that the group submitted false claims for Medicare reimbursement for tests that measure pulmonary function. In Mikes v. Strauss, 00-6269, Mikes charged that spirometry tests conducted by Pulmonary and Critical Care Associates of Westchester and Putnam Counties in New York did not meet the standards established by American Thoracic Society. Mikes had been fired from the association after only five months on the job — a dismissal she charged was based on questions she raised about the spirometry tests and other procedures. The doctors countered that Mikes was dismissed because she had trouble obtaining privileges at area hospitals. Mikes lost a motion for summary judgment in the Southern District of New York under the False Claims Act, which allows for a qui tam cause of action that gives a whistleblower plaintiff a percentage of any money recovered by the government from fraudulent claims. Southern District Judge Colleen McMahon ruled that submitting a claim to the government for service that fell short of the required standard of care does not make that claim actionable under the False Claims Act. Judge McMahon also found that the reimbursement claim did not implicitly certify that the spirometry tests conformed to a specific standard, and that even if the Medicare claims were objectively false, Mikes had not shown that the physicians knew or should have known that when they were submitted. On appeal, 2nd Circuit Senior Judge Richard J. Cardamone said, “Mikes relies principally on the ‘certification theory’ of liability, which is predicated upon a false representation of compliance with a federal statute or regulation or a prescribed contractual term.” “It differs from an ‘actually false’ certification, which involves an incorrect description of goods or services provided or a request for reimbursement for goods or services never provided,” Judge Cardamone said. The judge said it was clear that a claim for reimbursement to the government is not legally false where the service provided failed to comply with a statute, regulation or contractual term “that is only tangential to the service for which the reimbursement is sought.” “Since the act is restitutionary and aimed at retrieving ill-begotten funds, it would be anomalous to find liability when the alleged noncompliance would not have influenced the government to pay,” he said. Therefore, he said, the court was joining the 4th, 5th, 9th and District of Columbia Circuits in holding that noncompliance can be penalized under the act only where compliance with a regulation, statute or contractual term is made a condition of government payment. Although Mikes had challenged the reimbursement claims on the grounds that the Medicare form submitted to the government requires that the procedure be medically necessary, Judge Cardamone said her challenge was only to the “quality of the defendants’ spirometry tests and not the decisions to order this procedure for patients. …” NARROW READING As to her allegation that the submissions to the government were “impliedly false,” he said, the implied certification theory should not be read too “expansively and out of context.” “The False Claims Act was not designed for use as a blunt instrument to enforce compliance with all medical regulations — but rather only those regulations that are a precondition to payment,” he said. Judge Cardamone said permitting qui tam plaintiffs to assert quality-of-care challenges would “promote federalization of medical malpractice” and “replace the aggrieved patient as plaintiff.” “Beyond that, we observe that the courts are not the best forum to resolve medical issues concerning levels of care,” he said. “State, local or private medical agencies, boards and societies are better suited to monitor quality of care issues,” he said. Finally, Judge Cardamone noted that the section of the Medicare statute setting forth the conditions for participation in the Medicare reimbursement program by practitioners, 42 U.S.C. � 1320c-5(a)(2), does not deal with prerequisites to receiving reimbursement. “Since � 1320c-5(a) does not expressly condition payment on compliance with its terms, defendants’ certifications on the … forms are not legally false,” he said. Judge Fred I. Parker and Eastern District Judge Arthur D. Spatt, sitting by designation, joined in the opinion. Harold R. Burke of Holland Kaufmann & Bartels in Greenwich, Conn., represented Mikes. Barry B. Cepelewicz, David J. Meiselman and Arthur G. Larkin of Meiselman, Denlea, Packman & Eberz in White Plains, N.Y., represented the defendant physicians.

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