The opinion
Case: 24-50176 Document: 109-1 Page: 1 Date Filed: 03/28/2025
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________ FILED
March 28, 2025
No. 24-50176 Lyle W. Cayce
____________ Clerk
United States of America, ex rel, Tiffany Montcrief,
Relator; Roberta A. Martinez, Relator; Alicia Burnett,
Relator,
Plaintiffs—Appellees,
versus
Peripheral Vascular Associates, P.A.,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:17-CV-317
______________________________
Before Haynes, Duncan, and Wilson, Circuit Judges.
Haynes, Circuit Judge:
This is a False Claims Act case brought by Tiffany Montcrief and
others (together “Relators”) against Peripheral Vascular Associates, P.A.
(“PVA”), a vascular surgery practice based in San Antonio and South
Texas. Relators allege that PVA billed Medicare for vascular ultrasound
services that PVA had not yet completed.
As relevant here, there are two categories of allegedly false claims: the
“Testing Only” claims and the “Double Billing” claims. Before trial, the
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district court granted partial summary judgment to Relators, concluding that
PVA submitted Testing Only and Double Billing claims to Medicare that
were knowingly false. A jury then determined that these false claims were
material and that thousands of such claims caused the federal government
(the “Government”) to pay out money or forfeit moneys due. The district
court entered judgment totaling approximately $28.7 million against PVA.
On appeal, PVA challenges the district court’s grant of partial
summary judgment to Relators. PVA also challenges certain rulings of the
district court during and after trial with respect to materiality and damages.
We agree with some, but not all, of PVA’s arguments. For the reasons
below, we AFFIRM the district court’s grant of partial summary judgment
to Relators on the Testing Only claims, but we remand those claims for a new
trial on damages. We REVERSE the partial summary judgment ruling with
respect to the Double Billing claims. We thus VACATE the final judgment
and REMAND for a new trial consistent with this opinion.
I. Background
A. Factual Background
1. PVA and vascular ultrasounds
PVA’s vascular surgery practice, comprising twenty-two physicians
and 220 employees across seventeen locations, handles about 80,000 patient
encounters per year. Approximately 68 percent of PVA’s revenue comes
from Medicare and Medicare Advantage.
PVA performs “noninvasive vascular diagnostic studies,” which are
also known as “vascular ultrasounds” or “vascular studies.” PVA conducts
between approximately 40,000 and 50,000 such procedures per year.
A vascular ultrasound has two components: a technical component
and a professional component. The technical component consists of a
technician actually performing the ultrasound. The professional component
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consists of a physician reading and interpreting the results of the ultrasound.
The two components can be billed separately or combined into a single
charge and billed “globally.” PVA’s practice was to bill the components
globally.
2. Billing Medicare
To bill Medicare, PVA used alphanumeric codes (the “CPT–4
codes”) set forth in a manual, published by the American Medical
Association, entitled Current Procedural Terminology, Fourth Edition (the
“CPT–4 Manual” or “Manual”). The Department of Health and Human
Services, which oversees Medicare, has adopted the codes in the CPT–4
Manual as one of its “standard medical data code sets.” 45 C.F.R.
§ 162.1002 (a)(5), (b)(1), (c)(1). PVA reported these codes to Medicare on
a claim form called the CMS-1500 form.
Each type of vascular ultrasound is associated with a certain CPT–4
code. To bill only for the technical component of the ultrasound, PVA could
have appended a “TC” modifier to the end of the applicable code. To bill
only for the professional component, PVA could have appended a “26”
modifier. On a “global” bill for both components, no modifier is appended.
PVA could also, using certain CPT–4 codes, bill for “Evaluation and
Management,” or E/M, visits between physicians and patients. When a
patient underwent a vascular ultrasound and also received an E/M visit, the
treating physician would typically dictate his or her interpretation of the
ultrasound into the notes in the patient’s official medical record, which was
contained in a program called “Allscripts.” The medical record contained,
in addition to the interpretation of the ultrasound, notes on the patient’s
history and physical examination—essentially, everything PVA did for that
patient. The doctor would electronically sign this record before PVA billed
for the relevant service.
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A standalone written report interpreting the ultrasound would also be
separately created in a program called “MedStreaming” and signed by a
doctor. PVA adopted the MedStreaming program in 2014. A
MedStreaming report would be created for every vascular study, regardless
of whether the patient received an E/M visit or whether an interpretive
dictation was entered into a patient’s full record in Allscripts. As PVA
concedes, PVA doctors sometimes wrote and signed the interpretive
MedStreaming reports after claims for vascular ultrasounds were submitted
to Medicare.
By signing a CMS-1500 form, a physician certifies, among other
things, that the information on the form is true, accurate, and complete and
that the claim complies with applicable law and instructions. The physician
also certifies that “the services on this form were medically necessary and
personally furnished by me or were furnished incident to my professional
service by my employee under my direct supervision, except as otherwise
expressly permitted by Medicare.”
3. Testing Only and Double Billing claims
As mentioned above, two theories of fraud are relevant to this appeal.
The first theory focuses on what the parties call “Testing Only” claims.
These claims were for vascular ultrasounds performed on patients who did
not see a doctor, i.e., they did not receive an E/M visit, and no data was
entered into Allscripts for these patients. Again, as PVA concedes, at least
some of these claims were submitted to Medicare before a doctor wrote and
signed the relevant MedStreaming report—the only interpretive report,
whether written separately or dictated into a larger medical record, created
for patients whose claims fell into this category.
The second theory focuses on what the parties call “Double Billing”
claims. The parties agree that these claims were for services provided to
patients who received E/M visits and underwent vascular ultrasounds and
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for whom standalone MedStreaming reports were at least sometimes not
written and finalized until after PVA billed Medicare. The “Double Billing”
label appears to stem from the allegation that for each of these E/M visits,
PVA billed Medicare for E/M services and also separately submitted global
bills for ultrasound services.1
4. Relevant CPT–4 provisions
The CPT–4 Manual has been described as containing the “Rosetta
Stone for the billing codes” used by Medicare. Ohio Hosp. Ass’n v. Shalala,
201 F.3d 418, 420 (6th Cir. 1999). It is updated periodically, including in or
around 2016. The Manual’s Introduction explains that “[s]pecific guidelines
are presented at the beginning of each of the [Manual’s] sections,” such as
the Medicine section, the Radiology section, or the E/M section. The
guidelines “define items that are necessary to appropriately interpret and
report the procedures and services contained in that section” and “provide
explanations regarding terms that apply only to a particular section” (emphases
added).
Vascular ultrasounds are addressed in the “Noninvasive Vascular
Diagnostic Studies” subsection of the Medicine section. The introduction
to that subsection explains that vascular studies “include patient care
required to perform the studies, supervision of the studies and interpretation
of study results with copies for patient records of hard copy output with
analysis of all data, including bidirectional vascular flow or imaging when
provided.”
_____________________
1
With respect to a third category of claims, the “Wrong Provider” claims, the
district court granted judgment as a matter of law to PVA before submitting the case to the
jury. Relators do not challenge this ruling, so we do not further address the Wrong Provider
claims.
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Since about 2016, the guidelines for the Medicine section have
incorporated by cross-reference the guidelines for the Radiology section. See
Am. Med. Ass’n, Current Procedural Terminology: CPT
2016 Standard Edition 390 (4th ed. 2015) [hereinafter CPT 2016].
The latter guidelines contain somewhat ambiguous language about whether
radiologic procedures require standalone written reports, see CPT 2016 at
285–86, and this language continued to change as the Manual was further
updated between about 2016 and 2020. Moreover, the E/M guidelines
appear to allow physicians to bill separately, using different CPT-4 codes,
for E/M services and for vascular ultrasounds ordered during patient
encounters, and these guidelines are also somewhat esoteric with respect to
whether physicians’ interpretations of the ultrasounds must appear in
standalone written reports.
5. PVA’s temporary policy change
Around early 2017, PVA changed its approach to billing for vascular
ultrasounds. The practice transitioned to billing Medicare after the
interpretive reports were created in MedStreaming. The change was
expected to decrease the speed at which PVA could bill for its ultrasound
services and slow down PVA’s incoming cash flow.
The change was apparently recommended in part to avoid audit
requests for incomplete medical records and because, at least for a time, PVA
thought studies needed to be interpreted in written reports before they were
billed. But the policy shift caused a significant change to workflow in the
vascular lab. The district court found that PVA abandoned the policy change
when it realized that about a third of its revenue would not come in as quickly.
On appeal, PVA characterizes its policy change as a “temporar[y]
experiment[].”
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B. Procedural History
The False Claims Act, codified at 31 U.S.C. §§ 3729–33, forbids
knowingly submitting a false or fraudulent claim for payment to the
Government. 31 U.S.C. § 3729(a); see United States ex rel. Schutte v.
SuperValu Inc., 598 U.S. 739, 742 (2023); United States ex rel. Polansky v. Exec.
Health Res., Inc., 599 U.S. 419, 423 (2023). The Act “permits private
parties,” known as relators, “to bring lawsuits in the name of the United
States—called qui tam lawsuits—against those who they believe have
defrauded the Federal Government.” Schutte, 598 U.S. at 743; see 31 U.S.C.
§ 3730(b); Polansky, 599 U.S. at 423. “When a relator files a complaint, the
Government gets an initial opportunity to intervene in the case. If the
Government does so, it takes the lead role. If not, that responsibility falls to
the relator, the only person then pressing the suit.” Polansky, 599 U.S. at
423.
Tiffany Montcrief2 is a vascular technologist and sonographer who
worked at PVA in 2016. In 2017, Montcrief and two other Relators filed this
False Claims Act suit against PVA. The only claims that remain active are
asserted under 31 U.S.C. § 3729(a). The Government declined to intervene
in the case but, since then, has filed an amicus brief in this appeal.
A claim under the False Claims Act “consists of four elements: (1)
whether there was a false statement or fraudulent course of conduct; (2)
made or carried out with the requisite scienter; (3) that was material; and (4)
that caused the government to pay out money or to forfeit moneys due (i.e.,
that involved a claim).” United States ex rel. King v. Solvay Pharms., Inc., 871
F.3d 318, 324 (5th Cir. 2017) (per curiam) (internal quotation marks and
_____________________
2
Montcrief’s name appears in the record alternatively as “Montcrief” and as
“Montcrieff.” We refer to Montcrief here as Montcrief’s appellate counsel does.
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citation omitted). After the parties filed cross motions for summary
judgment, the district court granted summary judgment to Relators on the
issues of falsity and knowledge of falsity and concluded that the issues of
materiality and damages would be tried to a jury.
A five-day trial was held in February 2022. Relators put on expert
testimony regarding ultrasound bills that PVA submitted to Medicare
between 2014 and 2019.
PVA asked the district court to require the jury to decide whether
PVA had submitted each claim to Medicare with knowledge that the falsity
of the claim was material to the Government. The district court rejected that
request.
The jury found that the claims PVA submitted to Medicare were
material and that PVA submitted 2,755 Testing Only claims and 4,625
Double Billing claims that caused the Government to pay out money or forfeit
moneys due. The jury found that the Government suffered $408,765 in
damages because of the Testing Only Claims and $2,319,434 because of the
Double Billing claims.
Relators argued to the district court that PVA was subject to between
approximately $64 million and $128 million in statutory penalties. See 31
U.S.C. § 3729(a)(1). But Relators added that they would accept a judgment
imposing approximately $21.8 million in statutory penalties to obviate any
problem under the Excessive Fines Clause of the Eighth Amendment. The
district court concluded that a judgment imposing about $21.8 million in
penalties would not violate the Eighth Amendment. The district court also
awarded Relators more than $2.4 million in attorneys’ fees, costs, and
expenses.
Relators also requested treble damages. See 31 U.S.C. § 3729(a)(1).
PVA moved for judgment as a matter of law on damages, arguing that the
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Government suffered no damages because “it [was] not an issue about
whether PVA would be paid for [its] services, but simply when.” In
resolving this dispute, the district court noted that it could not “simply
disregard the fact that the services for which PVA submitted claims were
actually performed in every case.” But it also observed that “payment today
is not the same as payment tomorrow” and that “[t]he common measure of
the difference between payment now and payment later is interest.”
The district court therefore “set aside” the jury’s verdict on damages
in favor of “an interest-based model of damages.” The district court
concluded, however, that “given PVA’s failure to rebut [expert] testimony
at trial or to present a workable interest model in its post-trial briefing,” there
was “insufficient information from which to calculate damages.” The
district court therefore ordered the parties to propose models for evaluating
damages and allowed them to submit evidence. Accordingly, Relators
submitted an expert declaration that calculated interest-based damages in the
amount of $1,455,379, before trebling. The district court accepted that
calculation and entered a remittitur, resulting in a treble damages award of
$4,366,137. Final judgment totaling approximately $28.7 million was entered
February 14, 2024.
PVA timely appealed. In its amicus brief in support of Relators, the
Government noted that it “is a real party in interest in all actions under the
False Claims Act” and that it “has a substantial interest in ensuring the
integrity of Medicare.”
II. Jurisdiction
The district court had federal question jurisdiction over this case
pursuant to 28 U.S.C. § 1331. We have appellate jurisdiction under 28
U.S.C. § 1291, as PVA appealed from the district court’s final judgment.
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III. Discussion
PVA raises several issues for our review. First, PVA argues that the
district court erred in granting partial summary judgment to Relators on the
issues of falsity and knowledge of falsity. Next, PVA contends that the jury’s
finding on materiality was not supported by legally sufficient evidence.
Further, PVA asserts that the jury should have been required to find that
PVA knew its allegedly false claims were material to the Government.
Finally, PVA takes issue with the district court’s reliance in calculating
damages on the post-trial expert declaration submitted by Relators. We
address these issues in turn.3
A. Summary Judgment Stage
The district court granted partial summary judgment to Relators on
the issues of falsity and knowledge of falsity. See Schutte, 598 U.S. at 747
(stating that these are “two essential elements” of a False Claims Act
violation). We review a grant of summary judgment de novo. Guzman v.
Allstate Assurance Co., 18 F.4th 157, 160 (5th Cir. 2021). In doing so, we
“view the evidence in the light most favorable to the nonmovant,” which in
this case is PVA. Id. Further, we “draw all reasonable inferences in th[e]
[nonmovant]’s favor.” Kirchner v. Deutsche Bank Nat’l Tr. Co., 896 F.3d 337,
339 (5th Cir. 2018) (per curiam).
_____________________
3
We do not reach two additional arguments made by PVA. First, because we
remand for a new trial in full on the Double Billing claims and on damages on the Testing
Only claims, we need not evaluate whether the district court’s imposition of penalties and
trebled damages violated the Excessive Fines Clause. Second, we decline to consider
whether the qui tam provisions of the False Claims Act violate Article II of the
Constitution, as PVA acknowledges that this issue is foreclosed at this juncture by our
decision in Riley v. St. Luke’s Episcopal Hospital, 252 F.3d 749, 751 (5th Cir. 2001) (en banc).
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“The court shall grant summary judgment if the movant[s] show[]
that there is no genuine dispute as to any material fact and the movant[s] [are]
entitled to judgment as a matter of law.’” Fed. R. Civ. P. 56(a).
Additionally, where the movants—here, Relators—bore the burden of proof
at trial, the movants had to “establish beyond peradventure” the relevant
elements of the claim to receive summary judgment on those elements.
Guzman, 18 F.4th at 160 (quotation omitted).
1. Falsity
The False Claims Act penalizes claims that are factually false or legally
false. See United States ex rel. Ruscher v. Omnicare, Inc., 663 F. App’x 368,
373 (5th Cir. 2016) (per curiam). PVA argues that its Testing Only and
Double Billing claims were not false. It contends that the district court erred
in interpreting the CPT–4 Manual and in concluding at the summary
judgment stage that the Manual required PVA to create separate, written
reports for vascular ultrasounds in MedStreaming before billing Medicare.
We agree with PVA that partial summary judgment was inappropriate
with respect to the Double Billing claims, but we find no error in the district
court’s treatment at the summary judgment stage of the Testing Only claims.
We address each set of claims in turn.
a. Testing Only claims
As explained above, the Testing Only claims involved patients who
did not see a doctor and for whom no report was created in Allscripts. The
only interpretive reports created for these patients were the MedStreaming
reports, which—at least as relevant here—were not finalized until after PVA
billed Medicare.
From the fact that the MedStreaming reports were not finalized
before PVA billed Medicare, the only reasonable inference is that PVA
physicians failed to complete the professional components of the
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corresponding vascular ultrasounds before billing Medicare using “global”
CPT–4 codes, which covered both the technical and professional
components. This is thus a “paradigmatic case” involving “a request for
reimbursement for goods or services” that had not yet been furnished.
United States v. Sci. Applications Int’l Corp., 626 F.3d 1257, 1266 (D.C. Cir.
2010). In other words, these claims were “factually false.” Ruscher, 663 F.
App’x at 373. Indeed, PVA physicians certified to Medicare on each relevant
CMS-1500 claim form that “the services . . . were medically necessary and
personally furnished by me or were furnished incident to my professional service by
my employee” (emphasis added).
PVA’s arguments to the contrary are not persuasive. First, PVA
argues that the CPT–4 Manual does not require a physician billing for the
professional component of a vascular ultrasound to create a written report
memorializing his or her interpretation of the ultrasound. The key provision
explains that “[v]ascular studies include patient care required to perform the
studies, supervision of the studies and interpretation of study results with copies
for patient records of hard copy output with analysis of all data, including
bidirectional vascular flow or imaging when provided” (emphasis added).
Based on this language, we conclude that the professional component of a
vascular ultrasound requires some “analysis of all data” to be memorialized
in a patient’s records, e.g., via a written report by the evaluating professional.
Second, PVA suggests that the fact that doctors signed the relevant
MedStreaming reports after billing Medicare does not mean the doctors did
not perform the associated interpretive work before billing Medicare, but this
argument is insufficient to avoid summary judgment. As an initial matter, it
would be unreasonable on these facts to infer that PVA doctors only failed to
sign their reports before billing Medicare but did perform all the other work
required by the professional component. See Kirchner, 896 F.3d at 339
(stating that the court construes only reasonable inferences in the
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nonmovant’s favor). The evidence—including email, deposition testimony,
and committee meeting notes—tends to show that, except during the time of
the 2017 policy change, PVA was billing before studies were read and
interpreted by physicians. Further, PVA points to no evidence suggesting
otherwise with respect to any of the thousands of Testing Only claims
submitted to the jury. See Lyons v. Katy Indep. Sch. Dist., 964 F.3d 298, 302
(5th Cir. 2020) (stating that once movants meet their summary judgment
burden, “the burden shifts to the nonmovant to establish an issue of fact that
warrants trial”). We therefore conclude that it was appropriate for the
district court to grant summary judgment to Relators on the falsity element
with respect to the Testing Only claims.
a. Double Billing claims
The Double Billing claims were for services provided to patients who
received E/M visits and underwent vascular ultrasounds and for whom
standalone MedStreaming reports were (as relevant here) not written and
finalized until after PVA billed Medicare. It appears undisputed that
Allscripts reports were created and signed before submitting these claims to
Medicare and that the falsity of the claims thus turns on whether the CPT–
4 Manual also required PVA to generate a separate MedStreaming report
before billing. Like the parties, see United States v. Sineneng-Smith, 590 U.S.
371, 375 (2020), we treat the meaning of the guidance in the CPT–4 Manual
as ultimately presenting an issue of fact, although these claims appear akin to
claims that are “legally false,” Ruscher, 663 F. App’x at 373.
We agree with PVA’s argument that the district court improperly
mixed and matched provisions of the Manual that appear in different
sections. For example, the district court relied on a statement in the
Radiology section of the 2020 version of the Manual that “[u]se of
ultrasound, without . . . final, written report, is not separately reportable.”
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But vascular ultrasounds are categorized under the Medicine section, not the
Radiology section. Further, even though this case involves claims going back
to 2014, the district court relied on the Manual’s Radiology guidelines, which
have only been incorporated by the Medicine guidelines since about 2016 and
were further amended at an uncertain time between approximately 2016 and
2020.4
In any event, the most important question with respect to the Double
Billing claims is whether the Manual requires a report separate from the
report in Allscripts, i.e., whether it requires a separate MedStreaming report.
Recall that each Double Billing patient received an E/M visit. The district
court, in concluding that separate MedStreaming reports were required,
accordingly relied on language that appears in the E/M section of the
Manual. This language provides that a “physician’s interpretation of the
results of diagnostic tests/studies (ie, professional component) with
preparation of a separate distinctly identifiable signed written report may also be
reported separately, using the appropriate CPT code with modifier 26
appended” (emphasis added). The italicized text just quoted is the language
emphasized by the district court and used to support its conclusion that a
MedStreaming report is required in addition to an Allscripts report.
We cannot say “beyond peradventure” that this language is clear
enough to support a grant of summary judgment to Relators. Guzman, 18
F.4th at 160 (quotation omitted). We conclude on this record that the CPT–
4 Manual is ambiguous with respect to whether the section of an Allscripts
report dedicated to interpreting a patient’s ultrasound can serve as a
“separate distinctly identifiable signed written report,” even if it is attached
_____________________
4
As PVA points out, the language in the Medicine guidelines incorporating the
Radiology guidelines does not appear in the record. Even if we were to take judicial notice
of the language, that would not save the claims from before it first appeared in about 2016.
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to the rest of the relevant patient’s medical record. Indeed, PVA submitted
to the district court an expert’s opinion that the CPT–4 guidance “does not
state . . . that in the context of an [E/M] service, there should be a stand-
alone report.” The expert continued: “It simply states that . . . the
interpretation must be documented in written report to be supported.” We
therefore conclude that it was error to grant summary judgment to Relators
on the falsity element with respect to the Double Billing claims.5
2. Knowledge of falsity
PVA also challenges the district court’s summary judgment ruling
regarding “knowledge” of falsity. With respect to the Testing Only claims,
the district court did not err. The evidence makes clear that PVA was at least
“conscious of a substantial and unjustifiable risk” that it could not submit
global ultrasound claims to Medicare before doctors completed the
professional components of the relevant ultrasounds and that PVA
“submit[ted] the claims anyway.” Schutte, 598 U.S. at 751. An email
predating PVA’s adoption in 2014 of MedStreaming shows awareness that
“studies . . . cannot be billed until” they are “actually interpreted.” Further,
meeting notes indicate that PVA’s shift to billing after completion of
MedStreaming reports was “[r]ecommended” to “[e]nsure no audit
requests for incomplete medical records.” Regardless of whether PVA
actually knew its Testing Only claims were false, its concern about “audit
requests” and its earlier awareness that interpretation of vascular studies
_____________________
5
Since it filed a cross motion for summary judgment, PVA argues that we should
reverse and render judgment for PVA. We decline PVA’s invitation. As discussed above,
we conclude that there are ambiguities in the record and in the CPT–4 Manual. These
ambiguities preclude a grant of summary judgment on the falsity of the Double Billing
claims for either party. Although the CPT–4 provisions do not clearly favor Relators, they
also do not clearly exonerate PVA. Accordingly, this issue is most appropriately decided
by a jury.
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must precede billing show that PVA either “intentionally avoid[ed] taking
steps” to learn whether the Testing Only claims were false or took “a
substantial and unjustifiable risk” that they may have been false. Schutte, 598
U.S. at 751; see also id. at 753 (“Although the terms, in isolation, may have
been somewhat ambiguous, that ambiguity does not preclude respondents
from having learned their correct meaning—or, at least, becoming aware of a
substantial likelihood of the terms’ correct meaning.”).
Relators’ evidence of PVA’s knowledge is not as strong, however,
with respect to the Double Billing claims. For example, the pre-
MedStreaming email showing awareness that “studies . . . cannot be billed
until” they are “actually interpreted” (emphasis added) speaks only to the
clear CPT–4 requirement that ultrasounds be interpreted. The email sheds
no light on whether PVA was also aware that ultrasound interpretations
reported in Allscripts (as opposed to MedStreaming) might not be
sufficiently “separate[ly] [and] distinctly identifiable” such that they may
not serve as predicates for global ultrasound bills. As discussed above, the
record here does not even make clear that the “separate[ly] [and] distinctly
identifiable” language means what Relators say it means. Accordingly, the
district court erred in granting summary judgment to Relators on the scienter
element with respect to the Double Billing claims.6
B. Trial Stage
We next consider whether, with respect to the Testing Only claims,
the judgment entered after trial can withstand PVA’s challenges regarding
materiality, knowledge of materiality, and damages.
_____________________
6
As above, we decline to reverse and render judgment for PVA on the Double
Billing claims. Relators did submit evidence to the district court suggesting that a
standalone report is required. Accordingly, the scienter issue should go to the jury.
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1. Materiality
PVA briefly argues that no evidence supports the jury’s finding on the
materiality element. “The standard for appellate review of a jury’s verdict is
exacting,” and the verdict “must be upheld unless the facts and inferences
point so strongly and so overwhelmingly in favor of one party that reasonable
men could not arrive at any verdict to the contrary.” Granberry v. O’Barr,
866 F.2d 112, 113 (5th Cir. 1988) (quotation omitted).
We affirm the verdict with respect to materiality. Relators’ experts
testified extensively that had Medicare known it was being billed for
incomplete procedures, it would not have paid the relevant claims. We thus
conclude that there was sufficient evidence from which the jury could
conclude that Medicare “attach[ed] importance” to whether billed services
had actually been rendered. Universal Health Servs., Inc. v. United States ex
rel. Escobar, 579 U.S. 176, 193 (2016) (quotation omitted).
2. Knowledge of materiality
PVA next argues that the jury should have been asked whether PVA
had submitted each claim to Medicare with knowledge that the falsity of the
claim was material to the Government—an issue distinct from the district
court’s summary judgment ruling that PVA knew the claims were false. In
other words, PVA contends that the False Claims Act’s scienter
requirement applies not only to the falsity element but to the materiality
element as well. This is a legal question that we review de novo. See Dallas
Indep. Sch. Dist. v. Woody, 865 F.3d 303, 309 (5th Cir. 2017).
While PVA relies on language in the Supreme Court’s Escobar
opinion suggesting that the False Claims Act’s scienter requirement extends
to the materiality element in certain situations, see Escobar, 579 U.S. at 181,
we conclude that case had to do with “fraudulent” misrepresentations by
omission rather than claims that were outright “false,” 31 U.S.C.
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§ 3729(a)(1)(A)–(B). By contrast, Schutte, decided more recently, involved
outright falsehoods. There, respondent pharmacies were required when
submitting reimbursement claims to Medicare and Medicaid to disclose their
“usual and customary” prices for certain drugs. 598 U.S. at 743. Petitioners
accused the pharmacies of “report[ing] higher prices to [Medicare and
Medicaid] than the ones that they usually and customarily charged to the
public.” Id. at 745.
The Supreme Court held that even if the legal meaning of the
regulatory phrase “usual and customary” was ambiguous, the pharmacies
could be liable under the False Claims Act if they “correctly interpreted the
relevant phrase and believed their claims were false.” Id. at 743. In other
words, the pharmacies could not rely on the possibility that some other
person could have mistakenly, but reasonably, interpreted the phrase in a way
that would have authorized their reimbursement practices. The Court
rejected the pharmacies’ argument that “information,” as that term is used
in the False Claims Act’s definition of “knowingly,” “can refer only to
purely factual information.” Id. at 751 n.4. The Court responded that the
“definition of ‘information’ is broad” and added that “in this context, the
scienter requirement of the [Act] is plainly directed to the falsity of the claims
submitted.” Id. (emphasis added).
This case involves outright falsehoods, not misrepresentations by
omission. By signing a CMS-1500 form, a physician expressly certifies that
“the services on this form were medically necessary and personally furnished
by me or were furnished incident to my professional service by my employee
under my direct supervision.” With respect to the Testing Only claims, the
district court concluded (and we have now affirmed) that certain of such
express certifications made by PVA were false. Accordingly, we rely on
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Schutte rather than Escobar.7 We therefore conclude that the district court
did not err in declining to extend the False Claims Act’s scienter requirement
to the materiality element in this case.
3. Damages
a. Remittitur
Next, PVA challenges the district court’s reliance on Relators’ post-
trial expert declaration in granting remittitur and recalculating damages. The
district court’s decision on remittitur is reviewed for abuse of discretion. See
Longoria v. Hunter Express, Ltd., 932 F.3d 360, 364 (5th Cir. 2019).
PVA argues that at minimum, a new trial was required on damages.
Relators’ theory at trial was that damages should be measured according to
the full amount paid by the Government in connection with each of PVA’s
allegedly false claims. The district court, acknowledging that “the services
for which PVA billed were eventually performed,” set aside the jury’s verdict
on damages in favor of “an interest-based model of damages.” But the
district court also concluded that there was “insufficient information from
which to calculate damages.” The district court thus allowed Relators to
submit an expert declaration calculating interest-based damages in the
amount of $1,455,379, before trebling, and the district court accepted that
calculation.
We agree with PVA that the district court abused its discretion and
that a new trial is required to calculate damages. The district court’s
_____________________
7
At oral argument, counsel for PVA suggested that this case involves omissions
rather than outright falsehoods. But counsel did not explain why we should treat a
physician’s CMS-1500 certification as an omission. Escobar involved “implied false
certification” of compliance with Medicaid requirements. 579 U.S. at 186 (emphasis
added). Here, PVA expressly certified on CMS-1500 forms that it had already furnished
the relevant services.
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remittitur was subject to the maximum recovery rule, under which “the
verdict must be reduced to the maximum amount the jury could properly have
awarded.” Caldarera v. E. Airlines, Inc., 705 F.2d 778, 784 (5th Cir. 1983)
(emphasis added). The district court, however, expressly concluded after
trial that there was “insufficient information from which to calculate damages”
(emphasis added). Accordingly, it was improper for the district court to
allow Relators to submit additional proof—their expert declaration—and to
rely on that proof, which was never shown to the jury, to enter a damages
award.8
Relators’ response is unconvincing.9 Relators contend that there were
“no fact issues left for a jury to resolve” (emphasis removed), but that
statement flatly contradicts the district court’s express conclusion that the
trial record did not contain sufficient evidence to properly calculate damages.
It is true that the district court, in concluding that its remittitur
involved only an issue of law, credited Relators’ statement that their expert’s
interest calculation was produced using “PVA’s datasets on which all of his
prior work was based.” The district court determined that the expert’s
assurance was sufficient to cure the fact that Relators had “not cite[d]
specific trial evidence in support of [the expert’s] calculations.”
_____________________
8
PVA also briefly argues that the remittitur fails on its own terms because interest
should have accrued only from the time of the allegedly false bill until the time the relevant
MedStreaming report was finalized, rather than (as the district court concluded) until the
date the relevant claim was determined to be false by the jury. The district court rejected
this argument, analogizing to the process Medicare uses when it denies a claim. We express
no opinion on whether the district court’s conclusion on this issue was correct.
9
The Government advises that it “takes no position on whether the district court’s
interest-based damages calculation should be affirmed or instead remanded for further
proceedings.”
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But the expert’s new calculations were not submitted to the jury or
subject to cross-examination, and the expert’s new declaration acknowledged
that, as we discuss further below, the jury’s verdict departed somewhat from
the calculations he presented at trial. Further, PVA submitted its own post-
trial declaration that challenged Relators’ damages calculations and set forth
calculations of its own. Although the district court reproached PVA for
using its post-trial briefing to “attempt to relitigate its liability,” the district
court did not mention this declaration in its order entering the remittitur.
The district court may have found PVA’s post-trial declaration to be lacking
in credibility, but it is ordinarily the province of the jury to weigh credibility
issues. See United States v. Valasquez, 881 F.3d 314, 328 (5th Cir. 2018) (per
curiam).
All told, the damages award was based on calculations by a witness
that were not presented to the jury and were contested by an opposing
witness, Relators did not cite trial evidence supporting the calculations, and
the district court expressly determined that the trial record did not contain
sufficient evidence from which to calculate damages. We thus hold that the
district court should have granted a new trial on damages with respect to the
Testing Only claims. See Smith v. Transworld Drilling Co., 773 F.2d 610, 613
(5th Cir. 1985) (stating that “[i]f the trial judge is not satisfied with the
verdict of a jury, he has the right—and indeed the duty—to set the verdict
aside and order a new trial” (alteration in original) (quotation omitted)).10
_____________________
10
Once more, PVA urges us to render judgment for PVA on this issue. PVA
argues that Relators completely failed to prove damages. However, although the district
court concluded that the trial record was insufficient for calculating the exact measure of
damages, the trial record contained plenty of evidence supporting a determination that the
Government suffered some nonzero amount of damages under the interest-based damages
theory. A new trial is thus preferable to rendering judgment for PVA. See Smith, 773 F.2d
at 613.
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b. Number of false claims
Damages must therefore be retried with respect to the Testing Only
claims, but that might not be all. Relators’ expert calculated $412,475 in
damages resulting from the Testing Only claims, but the jury awarded only
$408,765 in damages for those claims. PVA therefore argues that any new
trial on damages should also determine the true number of false claims that
resulted in damages. See Worsham v. City of Pasadena, 881 F.2d 1336, 1338–
39 (5th Cir. 1989) (holding that it was not abuse of discretion to require new
trial on damages and liability where damages award shocked the conscience
and where damages issue was “inextricably linked” to liability issue).
We leave this issue for the district court to resolve in the first instance.
In his declaration, Relators’ expert suggested that it would be possible to
identify, based on evidence presented at trial, which particular Testing Only
claims were included in the jury’s damages calculation—and which were not.
On remand, the district court will have discretion to determine whether such
an identification is possible and, if not, to decide that the issue of the number
of actionable false claims is “too closely intertwined” with the issue of
damages “to justify retrial on the damages issue alone.” Worsham, 881 F.2d
at 1339.
IV. Conclusion
For the reasons above, we AFFIRM the district court’s grant of
summary judgment as to falsity and scienter with respect to the Testing Only
claims and REVERSE the district court’s grant of summary judgment as to
falsity and scienter with respect to the Double Billing claims. Further, we
VACATE the final judgment and REMAND for a new trial consistent with
this opinion.
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Stuart Kyle Duncan, Circuit Judge, concurring:
I fully concur in Judge Haynes’ well-crafted opinion. I write
separately to point out the constitutional flaws in the FCA’s qui tam device,
which our precedent prevents us from addressing. See Riley v. St. Luke’s
Episcopal Hosp., 252 F.3d 749 (5th Cir. 2001) (en banc) (upholding FCA’s
constitutionality). In short, “[t]here are substantial arguments that the qui
tam device is inconsistent with Article II and that private relators may not
represent the interests of the United States in litigation.” United States ex rel.
Polansky v. Executive Health Res., Inc., 599 U.S. 419, 449 (2023) (Thomas, J.,
dissenting); see id. at 442 (Kavanaugh, J., joined by Barrett, J., concurring).
This case exemplifies the problem.
Unlike Articles I and III, which respectively place federal legislative
and judicial power in multi-member bodies, Article II places the power to
execute federal law in one person: “The executive Power shall be vested in a
President of the United States of America.” U.S. Const. art. II, § 1, cl. 1.
1
“The entire ‘executive Power’ belongs to the President alone,” 599
U.S. at 449 (Thomas, J., dissenting), so “it can only be exercised by the
President and those acting under him.” id. The FCA defies this exclusive
vesting of executive power twice over.
First, it violates the Appointments Clause, which empowers the
President to appoint (with the Senate’s advice and consent) all principal
Officers of the United States. U.S. Const. art. II, § 2, cl. 2. Under Article
II, an “Officer of the United States” is someone who occupies a
_____________________
1
See also Nat’l Horsemen’s Benevolent and Protective Ass’n v. Black, 53 F.4th 869,
880 (5th Cir. 2022) (“Our Constitution permits only the federal government to exercise
federal power[,] . . . [which] is why each of the first three articles begins by ‘vest[ing]’
legislative, executive, and judicial power ‘in’ specific entities: ‘a Congress,’ ‘a President,’
and a “supreme Court’ and other federal ‘Courts.’”).
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“continuing” position, United States v. Germaine, 99 U.S. 508, 511–512
(1879), and “exercis[es] significant authority pursuant to the laws of the
United States.” Buckley v. Valeo, 424 U.S. 1, 126 (1976).
Yet, the FCA “permits private parties”—relators—to sue on behalf
of the United States. United States ex rel. Schutte v. SuperValu Inc., 598 U.S.
739, 743 (2023) (emphasis added). A relator obviously “exercis[es]
significant authority pursuant to the laws of the United States” by
“conducting civil litigation in the courts of the United States for vindicating
public rights.” Buckley, 424 U.S. at 140. But that duty “may be discharged
only by persons who are ‘Officers of the United States.’” Ibid.
In that light, consider what Montcrief, a private person, did here. She
“conduct[ed] civil litigation . . . for vindicating public rights” by initiating an
enforcement action against PVA on behalf of the United States, with zero
front-end executive review. Ibid. The United States then refused to
intervene. Under that circumstance, the FCA let Montcrief take the “lead
role” in litigating the case. Polansky, 599 U.S. at 423. The upshot: Montcrief
“exercise[d] core executive power by deciding ‘how to prioritize and how
aggressively to pursue legal actions’” against PVA. United States ex rel.
Zafirov v. Fla. Med. Assocs., LLC, 2024 WL 4349242, at *8 (M.D. Fla. Sept.
30, 2024) (quoting United States v. Texas, 599 U.S. 670, 678 (2023)).
A relator also occupies a “continuing position” for Article II
purposes. A position is “continuing” if “(1) the position is not personal to a
particular individual; (2) the position is not transient or fleeting; and (3) the
duties of the position are more than incidental.” United States v. Donziger, 38
F.4th 290, 297 (2d Cir. 2022) (citing Officers of the United States Within the
Meaning of the Appointments Clause, 31 Op. O.L.C. 73, 112–13 (2007)).
Relators check all three boxes. Anyone can sue under the FCA, so the
position “is not personal to a particular individual.” Ibid. The position is not
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transient because it can last years. Montcrief, after all, sued over seven years
ago. Lastly, relators conduct litigation on behalf of the United States, so their
duties are not “incidental.”2
So, it seems inescapable that the FCA’s qui tam device violates the
Appointments Clause. Despite qualifying as an Officer, “[a] private relator
under the FCA . . . is not ‘appointed as an officer of the United States’ under
Article II.” Polansky, 599 U.S. at 449 (Thomas, J., dissenting) (quoting
Cochise Consultancy, Inc. v. United States ex rel. Hunt, 587 U.S. 262, 272
(2019)). Relators instead “appoint themselves.” Riley, 252 F.3d at 767
(Smith, J., dissenting). The Appointments Clause does not allow that.
Second, the FCA’s qui tam device violates the Take Care Clause,
which provides that the President “shall take Care that the Laws be faithfully
executed.” U.S. Const. art. II, § 3. Instead of “leav[ing] to speculation
who is to administer the laws enacted by Congress,” Printz v. United States,
521 U.S. 898, 922 (1997), the Clause “gives the Executive th[at] power.”
Riley, 252 F.3d at 760 (Smith, J., dissenting) (citing Springer v. Government of
Philippine Islands, 277 U.S. 189, 202 (1928)).
That exclusive prerogative encompasses “the choice of how to
prioritize and how aggressively to pursue legal actions against defendants
_____________________
2
It is irrelevant that the relator’s position is “temporary.” The qualifier
“continuing” “does not exclusively refer to permanent positions.” Donziger, 38 F.4th at
296. In fact, courts have recognized independent counsel as Article II Officers “even
though the position terminates when the counsel ‘has completed any investigations or
prosecutions undertaken pursuant to’” governing law. Ibid. (quoting Morrison v. Olson, 487
U.S. 654, 664 (1988). Other “temporary” positions have also been deemed continuing for
Article II purposes. See, e.g., In re Grand Jury Investigation, 916 F.3d 1047, 1052–53 (D.C.
Cir. 2019) (special counsel); see also Ass’n of Am. Railroads v. U.S. Dep’t of Transp., 821
F.3d 19 (D.C. Cir. 2016) (one-time arbitrator under the Passenger Rail Investment and
Improvement Act is an inferior officer); United States v. Weitzel, 246 U.S. 533, 541 (1918)
(bank receiver).
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who violate the law.” TransUnion LLC v. Ramirez, 594 U.S. 413, 429 (2021).
Yet the FCA “allows Congress to circumvent the Executive’s check and to
have its laws enforced directly by its own private bounty hunters.”
Constitutionality of the Qui Tam Provisions of the False Claims Act, 13 Op.
O.L.C. 207, 211 (1989). In other words, the qui tam device violates the Take
Care Clause by allowing private persons like Montcrief to initiate and
prosecute suits to enforce federal law.3
This case puts the FCA’s flaws on vivid display. Without any green
light by the President or his agents, Montcrief launched an enforcement
action on behalf of the United States. The United States decided to stay in
the bullpen. So, Montcrief pressed forward on her own steam—without
government oversight—for seven years, eventually obtaining a multi-million
dollar verdict. Only on appeal did the United States show up, submitting an
amicus brief that did not even fully support Montcrief’s legal position.
A Constitution like ours—one that vests all federal executive power
in a President—does not allow this outsourcing of prosecutorial power to a
private person. That is not some arcane technicality. “[I]f people outside
government could wield the government’s power—then the government’s
promised accountability to the people would be an illusion.” Black, 53 F.4th
at 880 (citing The Federalist No. 51). Yet that is precisely what happens
when a private person brings a qui tam action under the FCA.
I respectfully concur, while hoping this anomalous practice will
someday come to an end.
_____________________
3
Some argue that “the long historical pedigree of qui tam suits” shows they do not
violate Article II. Polansky, 599 U.S. at 450 (Thomas, J., dissenting). Not so. “[H]istorical
patterns cannot justify contemporary violations of constitutional guarantees.” Ibid.
(quoting Marsh v. Chambers, 463 U.S. 783, 790 (1983)).
26