Over Government’s Objection, District Court Permits Bifurcation of Trial Between Proof of Falsity and Other FCA Elements

Posted by Scott Stein and Brenna Jenny

A court in the Northern District of Alabama recently granted defendant AseraCare’s motion to bifurcate its trial, limiting the government in the first phase to proving the element of falsity as to its sample of claims.

As we previously reported here, the government intervened in a qui tam suit against AseraCare, which alleged that the hospice provider submitted claims for patients who did not meet the criteria for medically indicated hospice care. In December 2014, the court permitted the government to attempt to establish FCA liability by extrapolating from a sample of 233 claims. AseraCare subsequently moved to bifurcate the falsity element from the other elements of the case. According to AseraCare, it would be prejudiced and the jury confused if, prior to a jury determination that false claims had actually been submitted, the government were permitted to present evidence of general corporate practices. In opposing the motion, the government argued that its own prejudice from a bifurcated trial would outweigh any to AseraCare because the issues of falsity and knowledge are interwoven, and evidence of patterns and practices would advance its case as to both elements.

The court disagreed that “the existence of the scheme,” if it could be established through evidence of corporate practices, also “proves the falsity of the claims.” Because the government had limited itself to a narrow sample of 233 patients, the court ruled that evidence of general corporate practices, including from locations that did not treat these patients, was best left to a separate trial phase encompassing the issue of whether AseraCare knew it was submitting false claims.

A copy of the court’s opinion can be found here.