Court of Appeals Rejects Quality of Care Standard for False Claims Act Liability (January 2002)

The United States Court of Appeals for the Second Circuit recently issued a decision that could narrow the scope of the prosecution of cases brought against health care providers under the False Claims Act, 31 U.S.C. § 3729, et seq. (the “Act”). This decision, United States ex rel. Mikes v. Straus, (http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=2nd&navby=case&no=006269) does significant harm to the theory that reimbursement claims for services not meeting alleged “quality of care” standards qualify as false claims under the Act. The Mikes case was initiated by relator Patricia Mikes against her former employers, three physicians specializing in oncology and hematology, under the qui tam provisions of the Act. In September 1991, relator allegedly discussed with defendant Straus her concerns relating to spirometry tests that were being performed in defendants’ offices. These concerns stemmed from her belief that defendants failed to comply with applicable standards for calibrating the equipment on which such tests were performed. Three months after voicing her concerns, she was fired. Relator contended that the American Thoracic Society (“ATS”) guidelines recommended daily calibration of spirometers, that the tests be performed in a certain manner, and that spirometer technicians be appropriately trained. She maintained that defendants did not follow these guidelines and, consequently, their performance of spirometry yielded inherently unreliable data.