Fourth Circuit Sidesteps Statistical Sampling Issue

Alexander R. Bilus
Published February 15, 2017

In a decision issued yesterday, the United States Court of Appeals for the Fourth Circuit dismissed an appeal that would have addressed one of the most pressing unresolved issues in False Claims Act jurisprudence: whether relators in an FCA lawsuit can rely on “statistical sampling” to prove their case.

In United States ex rel. Michaels and Whitesides v. Agape Senior Community, Inc., et al., No. 15-2145, the relators claimed that elder care facility operators had fraudulently billed Medicare and other programs for services that were not actually provided or that were provided to ineligible patients. Rather than reviewing each patient’s chart to identify the allegedly fraudulent claims, the relators wanted to review a sample of the charts and then extrapolate that information across all patients to prove the defendants’ liability and damages. According to the relators, this sampling technique might have avoided more than $36 million in litigation costs. The defendants argued that sampling would deprive them of their constitutional right to a jury trial on each individual alleged false claim. The district court held that sampling would be improper since all of the charts were intact and available for review—no evidence had been destroyed or dissipated.

The Fourth Circuit initially allowed the relators to bring an interlocutory appeal on this issue, but later backtracked, concluding that the issue was not appropriate for interlocutory review because it did not present a controlling question of law. Accordingly, the Fourth Circuit dismissed the appeal as improvidently granted. The relators will be able to appeal the issue after a final judgment in the case (if the case is not resolved before that point). Thus, the battle over the propriety of statistical sampling in FCA cases will continue as courts around the country grapple with the issue. ​

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