AseraCare Loses First Round of Contentious False Claims Act Trial

Ideally, False Claims Act lawsuits are resolved via a negotiated settlement between the whistleblower, the defendant, and the government. However, if a settlement agreement cannot be reached, the parties must press on toward a trial – an option that sets up both sides for a greater amount of unpredictability and risk.

In today’s case, we review a healthcare fraud lawsuit trial that took place in an Alabama federal district court in October 2015. In another example of hospice healthcare fraud, hospice care provider AseraCare was accused of improperly admitting non-terminal patients for palliative services.

An important trial milestone was reached in October 2015 as jurors reviewed the documentation that purportedly contained evidence of fraud against the government. The jury held that most of the documents did indeed support a finding of fraud.

Details of the AseraCare False Claims Act Lawsuit

As a provider of end-of-life services in 19 states, AseraCare should be well aware of the requirements for palliative coverage under Medicare and Medicaid. Whistleblower claims assert that the regional healthcare provider knowingly committed fraud, and that it continued to fraudulently bill the government for the ongoing care of patients who were not terminal or did not otherwise meet admissibility criteria set forth by Medicare and Medicaid.

The trial was divided into two phases: falsity and scienter. In the falsity phase, jurors were asked to review the documentation showing the alleged claims on behalf of patients who did not qualify for hospice coverage at the time. On October 15, 2015, the jury determined that of the 121 invoices reviewed, 104 of the claims were not eligible for reimbursement from the government for services related to end-of-life care.

Under federal regulations, a patient is not eligible for coverage of hospice care unless a physician certifies that the patient is suffering from an end-of-life condition. An end-of-life condition is defined by a patient with six months or less to live.  

In this case, the jury found that while each patient file contained the necessary certification, the evidence did not support the claim that the patient factually met the requisite criteria for enrollment in hospice and palliative care services. More specifically, the jury determined that patients were not suffering from a terminal illness or injury expected to result in death within six months at the time of certification, making the admittance an intentional fraudulent act.  

AseraCare contested the decision, stating that the government had relied on a small sampling of claims as evidence. The court denied AseraCare’s motion for summary judgement, and concluded that the statistical sampling used in the trial was a sound method to definitely find liability.

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