Providers rip use of statistical sampling in fraud cases

The American Health Care Association is lending its clout to a controversial court case debating the use of statistical sampling in False Claims Act cases.

In an amicus brief filed Thursday, the AHCA supported hospice provider Agape Senior Community Inc. by slamming the use of statistical sampling in FCA cases as a “novel shortcut” with “no textual basis in the FCA.”

Statistical sampling uses a “representative sample” of submitted claims thought to be upcoded, and compares them to the total number of claims submitted during the period when the violations were said to occur.

Agape was accused of defrauding federal healthcare programs by falsely certifying patients for a certain level of hospice care when hospice care was not appropriate. The Agape case is the latest in a string of similar complaints where courts have upheld the use of statistical sampling.

In its brief, AHCA  said the use of statistical sampling violates the provider's due process right to mount a meaningful defense against the accusations, and creates unfair pressure to settle the case pretrial.

“AHCA has a monumental interest to defend our membership's basic due process rights when facing draconian liabilities, such as treble damage awards that can be imposed under the FCA,” said AHCA President and CEO Mark Parkinson in a statement. “The government wants general sampling to replace specific proof as a shortcut to winning FCA cases. That will also give big government a giant sledgehammer in forcing defendants into pretrial settlements irrespective of the merits of the case. Sampling cannot be a substitute for actual proof in an FCA case.”

The use of statistical sampling has also been called “trial by formula” by the U.S. Supreme Court, Parkinson noted. U.S. ex rel. Michaels v. Agape Senior Community, et al. is currently slated for review by the U.S. Court of Appeals for the Fourth Circuit.