USA ex rel. Bookwalter v. UPMC—civil / qui tam—reversal—Bibas (on panel rehearing)

The Third Circuit today issued a new panel opinion in an appeal involving an important challenge to physician referral practices.

This past September, the panel reversed the district court’s dismissal of the suit, with Judge Ambro concurring in the judgment and disagreeing with the panel majority about how to construe the Stark Act’s scope. The heart of Judge Ambro’s concern was that the majority interpreted Stark Act liability too broadly beyond its core concern about doctors referring patients to providers in which the doctors have a financial interest when it held that the relators met their burden by pleading that the doctors’ compensation correlated with their referrals. He “worr[ied] we are sending signals to hospitals throughout the Third Circuit, and the nation, that their routine business practices are somehow shady or suspicious and could leave them vulnerable to significant litigation.”

Today, the court announced that it granted panel rehearing in part while denying rehearing en banc, and it issued a new panel opinion (linked at the top of this post). The order very helpfully identifies what changed:

The majority has made changes to the language that appeared at pages 3–4, 6, 11, 15, 27–30, 32–33, 35–37, and 39–40 of the original opinion. Most of the material that appeared at pages 18–25 of the original opinion has been deleted. Judge AMBRO’s opinion concurring in the judgment has been withdrawn.

I haven’t compared the old and new opinions line-by-line, but it appears to me that the core change is reflected in the change of this heading from the original opinion:

The surgeons’ compensation varies with, or takes into account, the volume and value of their referrals

to this in the new opinion:

The surgeons’ compensation took into account the volume and value of their referrals

(Fellow typography nerds will note that the new opinion also spruced up the opinion’s already impressive design in the table of contents.)

Joining Bibas were Ambro and Fuentes. Arguing counsel were Gregory Simpson of Georgia for the appellants and Jessica Ellsworth of Hogan Lovells for the appellees.