A federal judge in Alabama has dismissed a False Claims Act lawsuit against a national chain of hospice providers, finding the complaint staked its allegations of Medicare fraud on the testimony of one expert witness. The U.S. Department of Justice, which joined the suit, is expected to appeal the decision.
AseraCare, one of the largest for-profit hospice providers in the U.S., was sued in 2012 by a whistleblower who claimed the company certified patients who weren’t terminally ill as eligible for hospice care. Federal prosecutors investigated the allegations by analyzing 233 random cases. It found that more than half of the patients were ineligible for hospice services.
U.S. Judge Karon Bowdre of the Northern District of Alabama split the case into two phases, each to be tried separately. The first phase of the trial focused on whether 123 claims AseraCare submitted to Medicare for reimbursement were valid.
In the second phase, other allegations were to be tried, including claims that AseraCare pressured employees and persuaded doctors to enroll new patients even when those patients were not in need of hospice services.
In the first phase, however, Judge Bowdre issued a summary judgment to AseraCare because the government based its argument regarding the claims’ alleged falsity on the testimony of an expert witness. She said that false claims couldn’t be proven on the differing opinions among physicians.
The jury had been persuaded by the testimony, finding that AseraCare submitted false claims to Medicare for 104 patients.
AseraCare then motioned for a new trial, arguing that the jury had not been told that differing opinions by physicians weren’t adequate to prove allegations of false claims. Judge Bowdre agreed to reconsider summary judgement and ultimately sided with AseraCare.
In an appeal of the case, it’s possible the U.S. could produce different evidence to substantiate its claims, but it’s unclear what specific action will be taken other than an appeal.
AseraCare operates about 60 hospice facilities in Alabama and 18 other states. It admits about 10,000 new patients every year. Most AseraCre patients are enrolled in Medicare and are not privately ensured.
The U.S. seeks $200 million in restitution and penalties from AseraCare for the alleged false claims.