Whistleblowers Will Appeal after Judge Throws Out False Claims Act Lawsuit against Hospice Provider

Whistleblowers who came forward to report massive Medicare fraud being committed by AseraCare, a major hospice care provider, plan to appeal after a federal judge threw out their lawsuit and basically said that the deceptive billing practices of the company were somehow okay.

AseraCare reportedly committed fraud when they fraudulently billed Medicare for hospice services. The lawsuit, filed by several former AseraCare workers, sought to impose significant penalties against AseraCare, with fines possibly totaling more than $200 million. The severity of the monetary penalties stemmed from the degree of the hospice care company’s alleged fraud, which constituted serious violations of the False Claims Act.

What Happened: Medicare Billing Fraud on a Massive Scale

The whistleblowers in the case came forward after seeing that AseraCare had fraudulently certified people as “expected to die within six months.” When it comes to hospice care, the rule is that the government will only pay for a patient who is expected to live for another six months or less if their terminal illness runs its normal course. In this False Claims Act case, AseraCare reportedly submitted claims to Medicare, totaling millions of dollars, for patients who ended up remaining in hospice care for long after the six-month period had elapsed. With so many patients being billed long after their “certification dates” (a doctor had to certify that the patients would only live for another six months), the validity of the certifications was dubious. The crucial question was: Did AseraCare have a doctor fraudulently certify patients as being on the verge of death so that the hospice company could file false Medicare claims and bilk the government out of millions of dollars?

The whistleblowers filed suit against AseraCare. Then, as often happens in strong cases involving major Medicare or Medicaid fraud, the federal government intervened and supported the whistleblowers in the lawsuit.

The Trial: A Judge Intervenes on Behalf of the Company

The initial trial lasted two months, beginning in August 2015, and concluded with the jury declaring, emphatically, that AseraCare had filed false claims in the vast majority of patient cases. However, the federal judge threw out the verdict due to a technicality. (The judge said that she felt as if she may have provided the jury with an improper instruction before they deliberated.) The judge then told the plaintiffs’ attorneys that would need more evidence of fraud by AseraCare or risk having the lawsuit thrown out – despite the fact that a jury had just ruled in favor of the plaintiffs!

Now, just last week, the judge followed through on her threat and tossed the entire lawsuit. Although the evidence presented at trial clearly showed that AseraCare had filed claims for patients who did not meet the legal requirements for Medicare-covered hospice care benefits, the judge said that the facts of the case and the testimony of countless experts was not enough.

After the ruling was handed down, AseraCare issued a not-very-surprising statement that hedged and qualified when it came to any meaningful terms, praising the judge for finding that “reasonable minds could differ” on whether “sufficient evidence” existed to prove that the company had filed false billing claims “as a matter of law.”

Neither the whistleblowers who came forward nor the federal government agree with any part of AseraCare’s statement. Not only are the whistleblowers expected to appeal the shocking ruling, the US Department of Justice is also expected to seek authorization from the Office of the Solicitor General to file an appeal as well.

For more information about this case, view the AL.com article, “Judge Tosses Out $200 Million AseraCare Hospice Whistleblower Lawsuit.”


If you know of healthcare fraud being perpetrated against the federal government or the state government, whether it involves Medicare fraud, Medicaid fraud or any other kind of fraud, you could be entitled to a large financial reward. Contact the experienced whistleblower and qui tam lawyers at Begelman & Orlow, P. C. now to discuss your options.

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