Last year, Intermountain Healthcare lost an appeal to dismiss a whistleblower case accusing it, HCA-owned St. Mark's Hospital and a staff cardiologist of filing false Medicare claims for nearly 1,000 medically unnecessary heart operations.
On Jan. 14, Intermountain petitioned the U.S. Supreme Court to decide whether part of the whistleblower law violates a constitutional clause barring individuals not appointed by the president, the attorney general or the federal courts from prosecuting cases on behalf of the government. It wants to stop the case from moving to discovery.
The American Hospital Association and the Federation of American Hospitals filed a supporting brief saying meritless whistleblower lawsuits divert scarce resources from hospitals' core mission of providing care.
The underlying case—but not the U.S. Supreme Court appeal—centers on whether a False Claims Act case can be based on the allegation that a physician's determination of medical necessity is false. Courts around the country have ruled differently on that issue.
The whistleblower, Dr. Gerald Polukoff, alleged that Dr. Sherman Sorensen performed unnecessary heart procedures at an Intermountain hospital and at St. Mark's Hospital, citing American Heart Association and American Stroke Association guidelines. He said Sorensen falsely claimed that the procedures were based on stroke diagnoses.
The 2012 lawsuit, which the Justice Department did not join, said Intermountain and St. Mark's were complicit in the fraud.
A federal district judge in Salt Lake City dismissed the case, ruling that Sorensen's subjective clinical opinion “cannot be proven to be objectively false.”
But last July, with the Justice Department supporting the whistleblower, the 10th U.S. Circuit Court of Appeals reversed and remanded the lower court ruling. It said “a doctor's certification to the government that a procedure is 'reasonable and necessary' is 'false' under the FCA if the procedure was not reasonable and necessary under the government's definition of the phrase.”
The 10th Circuit did not rule on Intermountain's constitutional challenge because it was not raised at the district court level.
The case is currently in settlement talks, according to Rand Nolen, a Houston attorney representing Polukoff. He hopes the Justice Department will join the case, even though it won't lead to a large recovery. Nolen said the case is important because “if any doctor can simply say the magic words that in their medical judgment something was necessary and that gets you out of potential liability for false claims, that will wreak havoc in our system.”
An attorney representing Intermountain in the Supreme Court appeal declined to comment on the false claims case.