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Appellate court to decide whether to allow statistical sampling in False Claims case

The complex nature of billing practices within the health care field makes it particularly vulnerable to errors and possible acts of fraud. In cases where a hospital or nursing home employee believes that an employer is engaging in dishonest financial practices aimed to defraud the federal government, a lawsuit may be filed under the False Claims Act.

A landmark ruling by the 4th U.S. Circuit Court of Appeals in a case involving Agape Senior Center of South Carolina and allegations of fraudulent billing is expected soon. According to the lawsuit, Agape is accused by several employees of certifying “patients for hospice and other services that were not medically necessary.” At issue in this case is whether the whistleblowers who brought the lawsuit will be allowed to introduce evidence gathered using a method known as statistical sampling in their case against Agape.

While the whistleblower plaintiffs were all employed at the same Agape facility, via statistical sampling, they want to examine random claims filed by all of Agape's facilities in an attempt to detect a pattern of widespread fraud. With roughly 60,000 claims submitted during the period in question and each with a possible false claim violation of up to $11,000, the discovery of fraudulent Medicare billing practices could spell financial ruin for Agape.

On a larger scale, if the appellate court sides with the plaintiffs, the case would set a precedent as the first time that "a federal appeals court has considered whether statistical sampling may be used in a False Claims Act matter." A positive ruling in this matter could have significant legal and financial implications for health care providers.

When it comes to billing practices, health care providers must ensure that they are accurate, honest and compliant with regulatory measures. This case highlights the growing focus and concern about possible fraudulent billing practices and how such practices could potentially be the financial downfall of a healthcare organization.

Source: Modern Healthcare, "Providers urge court to forbid statistical sampling in False Claims cases," Lisa Schenecker, March 29, 2016

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