On October 26, 2016, the US Court of Appeals for the Fourth Circuit held oral arguments in United States ex rel. Michaels v. Agape Senior Community, Inc. In this case, the relators alleged that the defendants caused the submission of false claims for hospice reimbursement. The Medicare regulations governing the hospice benefit require physicians to certify that the patient seeking the benefit have a terminal illness with a prognosis of six months or fewer. The relators allege that those certifications were false.
At the district court, the relators had sought to use statistical sampling to establish liability. After the district court concluded—in the context of a discovery dispute—that it would not permit the relators to use statistical sampling to prove their case, the parties engaged in mediation efforts. The relators and defendants reached a settlement, but the government objected. The district court then certified for interlocutory appeal two issues: (1) whether the government has an unreviewable power to veto a False Claims Act settlement; and (2) whether statistical sampling can be used to establish liability.
At the oral arguments, the Fourth Circuit panel was somewhat skeptical to the notion that it could even conduct an interlocutory review the district court’s ruling on statistical sampling, noting that the district court made an evidentiary ruling that it could have revisited later in the proceedings, including at trial.