Will U.S. Courts Accept Statistics in False Claims Cases?

Many years ago, when I was wet behind the ears in applying quantitative methodologies to policy

making, I came up with an interesting approach to examine the validity of a system which was closed to public scrutiny.

That system was child welfare.

Grabbing hold to my beliefs that laws, any type of laws (i.e. theoretical, statutory) were made to be challenged, either through alternative models, robust testing, or the democratic process, I went about my merry way to prove that the level of fraud in child welfare was statistically significant through sampling.

Using extapolated data of Wayne County, Michigan expenditures, not only did I find a positive, direct correlation in the rate of poverty with the rate of child welfare cases, but I also found unique cost-reimbursement patterns paralleling child welfare campaign months.

Stochastic analyses took the statistical significance to entirely different levels of reliability.

Parsimony led me to Medicaid fraud in child welfare because its homogeneity reeked the loudest.

If the federal administrations do not have the resources to go after Medicaid fraud in child welfare, then the courts should listen to data from an original source.

The technology of statistics should be adopted as an evidentary standard in a court of law.  It is time to get rid of the horse and buggy.

Stay tuned for further iterations, ha ha.

Fourth Circuit to Rule on Use of Statistical Sampling to Prove FCA Liability

The U.S. Court of Appeals for the Fourth Circuit has agreed to hear an interlocutory appeal on the use of statistical sampling as a means of proving liability under the False Claims Act (FCA). While statistical methods of proof have been used with respect to damages, relatively few courts have considered whether such methods are ever appropriate to establish liability under the FCA. Thus, the court’s ruling has the potential to shape practice in this area moving forward.

The case, United States ex rel. Michaels v. Agape, concerns allegations that a network of 24 nursing homes throughout South Carolina submitted fraudulent claims to Medicare, Medicaid and Tricare for care that was not medically necessary. Due to the large volume of potentially fraudulent claims—over 50,000 claims were submitted during the relevant time period—relators sought to use statistical sampling to prove that defendants had submitted false claims. Specifically, the relators sought to have their experts review a small percentage of the claims, determine what percentage of those claims were fraudulent and extrapolate over the entire universe of submitted claims. The district court rejected the approach but certified the question for interlocutory appeal.

The district court was correct to be skeptical of statistical sampling to prove liability, and the relators will have an uphill battle to convince the appeals court that their proposed method of proof is sound.

First, as the district court noted, this is not a case where the relevant evidence is unavailable and statistical sampling presents the only possible method of proof.  In fact, all the documentation concerning the allegedly fraudulent claims exists and is fully accessible. The relators’ argument is simply that it would take too much time to review such a large volume of data. As the district court stated, such shortcuts are inappropriate in a case where the alleged fraud is that services provided were not medically necessary—a “highly fact intensive inquiry involving medical testimony after a thorough review of the detailed medical chard of each individual patient.”

Second, the use of statistical sampling is not guaranteed to shorten the trial because the defendants still retain the right to present evidence on each individual claim. To force the defense to also rely on a sample of the claims and prevent the presentation of evidence on the remainder of the individual claims would, as the defendants argued, deny them of their constitutional right to a jury trial on the facts.

The Fourth Circuit’s ruling on this issue has the potential to either settle the law in this area or open the door to speculative methods of proof in a number of areas of FCA litigation.

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Are Teachers Police?

If teachers are to be seen to possess the same law enforcement duties of police, does that mean that teachers must now take an oath of office to uphold the constitution?

Does this mean teachers will be granted immunity in the event of improper reporting?

Can a teacher testify against an alleged perpetrator of child abuse when the child who allegedly accused an individual is too young to testify in court?

Is that third party heresay or does the teacher possess powers of omnipotence?

Is there an evidentary standard for third party heresay or is it one of those "best to err on the side of the child" thing?

Yes, on the word of a 3 year old, one can be arrested.

Yes, it is assumed the teacher has the innate ability to interpret and understand the words of a child, without any investigation or evidence.

The burden upon teachers as a mandated reporter of child abuse and neglect is punishable by fine and/or imprisonment, based on the words of a 3 year old.

The worst part is the individual who the teach now accuses of child abuse is placed on a central registry for life.

In Michigan people are placed on the central registry without notification, charges, trial, etc.

There is no parallel jurisprudence in child welfare because it is a multi-billion dollar industry.

U.S. Supreme Court Weighs Role of Teachers in Reporting Child Abuse

The U.S. Supreme Court on Monday waded with trepidation into the subject of educators' interactions with students about possible abuse at home, and whether a child's statement to a teacher may be used in a criminal case without the accused having a chance to cross-examine the child.

"Ohio's teachers, I think, are horrified to learn that the Supreme Court of Ohio [views] them no [differently] than cops when they're talking to the children in their classrooms," Matthew E. Meyer, an assistant prosecuting attorney in Cleveland, told the justices in a case in which Ohio is appealing a ruling by its highest court that the state's mandatory-reporting duty for teachers to report child abuse turns them into agents of law enforcement.

But Jeffrey L. Fisher, a Stanford University law professor who is representing a man convicted of child-abuse charges based largely on a 3-year-old victim's statements to two of his day-care teachers, said he was not asking for a rule that would bar prosecutors from using the testimony of young victims of abuse.

"All we are asking for is that a state not to be allowed to have it both ways, introducing such evidence while at the same time prohibiting the defense from any form of confrontation whatsoever," Fisher said during the March 2 arguments in Ohio v. Clark (Case No. 13-1352).

Fisher argues that the state's use of statements to the teachers by the 3-year-old child identified as L.P. violated the Sixth Amendment right of the defendant, Darius Clark, to confront the witnesses against him. 

L.P. arrived at his Head Start center one day in 2010 with a bloodstained eye. Two teachers at the center questioned the boy about "who did this to you?" and whether it was "someone big or little" before L.P. identified "Dee," in reference to Clark, who was his mother's boyfriend.

The teachers, Ramona Whitley and Debra Jones, contacted Ohio's child-welfare agency, which began an investigation that led to charges against Clark of felony assault and endangering children.

At Clark's trial, L.P. was held to be too unreliable a witness, based on his testimony at a pretrial hearing and the state's high bar for allowing children to testify at all. So prosecutors relied on the boy's identification of Clark in the statements to his teachers.

The Ohio Supreme Court last year affirmed a midlevel appeals court's decision to throw out the conviction because Clark's confrontation-clause rights were violated since his lawyers could not cross-examine the child. The state high court went on to hold that the mandatory duty on teacher to report child abuse effectively made them agents of law enforcement because the state expected them to help identify the perpetrators of abuse.

The state high court ruling was alarming to education groups, and the National Education Association, the American Federation of Teachers and the National School Boards Association (and its Ohio affiliate) filed a friend-of-the-court brief urging the U.S. Supreme Court to reject that intepretation. (See my Education Week story previewing the case.)

The 'Routine Role' of Teachers

Meyer, arguing on behalf of Ohio, told the justices that "Ohio law does not impose upon any mandatory reporter a duty to investigate" suspected abuse.

The state had an ally in President Barack Obama's administration, with the U.S. solicitor general's office also arguing that the Ohio supreme court erred in finding that a mandatory-reporting duty turned teachers into the equivalent of the police.

"Teachers aren't in the business of prosecution," Ilana Eisenstein, an assistant to the U.S. solicitor general, told the justices in court. "They're not in the business of collecting evidence, and as such, this court can generally presume that when they inquire of their students as to how they got hurt, they are asking out of a concern for welfare, safety, and out of their normal, routine role, not as a means of collecting evidence."

Justice Elena Kagan asked her whether the context might be different if the student was a 13-year-old instead of a preschooler and the teacher informed the student of her mandatory-reporting duty to the point where "it's pretty clear to both the teacher and the student that at the back of that conversation, is the presence of police."

Eisenstein said that could be different under the Supreme Court's confrontation-clause jurisprudence, which involves whether an out-of-court statement sought to be used by prosecutors is "testimonial" in nature.

Chief Justice John G. Roberts Jr. suggested that when a teacher goes from asking, "Who did this to you?" and determining that person is not an immediate threat, to "Has he done this before?", that a line has been crossed.

"It's not related to the immediate concerns or immediate safety but seems to be designed to compile a case," he told Eisenstein.

Justice Ruth Bader Ginsburg, stressed to Fisher, the defendant's lawyer, that the first reaction of a teacher to signs of abuse is to "get that child out of harm's way."

"So the teacher, I would think, is not thinking about prosecution down the road," Ginsburg said, but rather, "'What can I do to assure the safety of this child right now?'"

Fisher pointed to advice the state of Ohio gives to teachers in a guide on the mandatory duty to report, which includes "information which might be helpful establishing the cause of the abuse" and "the identity of the perpetrator," as the guide puts it. 

"So [the teacher] is gathering evidence," Fisher said. "That's what she's told to do."

"We don't dispute that a teacher has a protective purpose, partly, in mind," Fisher added. "And I think it's absolutely natural that the teacher would. But the problem is, and our position is, that is inextricably intertwined with criminal prosecution as well."

Fisher told the justices that the state of Texas has the rule that Ohio is effectively seeking in this case, which is a special child hearsay statute that allows only the first person to whom a child discloses abuse to repeat that extrajudicial accusation in court. The Texas attorney general's office has advised teachers that they "may have an especially important role to play in subsequent legal proceedings," as a 2005 document from the office puts it. The document also advises teachers that "important testimony could be lost" if they pass the child off to another person, because of the "first person" hearsay rule, Fisher's merits brief pointed out.

"So you have already a system set up for prosecution by out-of-court ... accusation," Fisher told the justices in court. "And that is exactly what the confrontation clause is designed to prohibit."

A decision in the case is expected by late June.

Ohio Supreme Court Brief on Teachers as Child Abuse Reporters

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