Appeals Court dismisses statistics-based FCA case

The U.S. Court of Appeals for the 9th Circuit yesterday stopped data analysis company Integra Med Analytics from proceeding with a False Claims Act lawsuit alleging Providence Health & Services used inflated codes to bill Medicare. Reversing the district court decision, the appeals court held that Integra “failed to state a plausible claim for relief because its allegations do not eliminate an obvious alternative explanation—that Providence, with [J.A. Thomas & Associates’] assistance, was more effective at properly coding for better Medicare reimbursement than others in the healthcare industry.” 

The AHA, California Hospital Association, and Washington State Hospital Association last year urged the U.S. Court of Appeals for the 9th Circuit to reverse the district court decision, which they said "gives private plaintiffs broad license to file suits under the False Claims Act in ways that Congress never intended and expressly barred."