Sampling, extrapolation to prove FCA liability approved by district court

The U.S. District Court for the Eastern District of Tennessee has held it is permissible for the government to extrapolate from a random sample to establish the elements of False Claims Act liability, according to a Law360 report.

In the case of United States ex rel. Martin v. Life Care Centers of America, Inc., the government alleges Life Care — a skilled nursing services provider — submitted fraudulent claims to Medicare as part of a nationwide scheme to defraud the system by providing unnecessary services. The government sought to present a sample of 400 patient admissions and extrapolate liability and damages for an additional 54,396 unidentified patient admissions from that sample.

Life Care argued the government should not be permitted to use sampling and extrapolating, as it violates Life Care's right to due process since the government would otherwise be unable to prove all of the elements of liability under the False Claims Act.

The court sided with the government, and noted Life Care's arguments against the use of statistical sampling should be made in front of a jury, according to the report.

It is likely the court's decision will be appealed, but if the district court's decision is upheld, it could open a new gateway for whistle-blowers and their attorneys to bring False Claims Act lawsuits.

More articles on the False Claims Act:

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10 latest healthcare industry lawsuits, settlements