Today, the district court in the AseraCare case delivered the coup de grace to the Department of Justice, granting summary judgment for AseraCare after previously vacating a jury’s verdict in favor of DOJ. In so doing, the court’s brief order emphasizes that disagreements over medical necessity, standing alone, provide no basis for an FCA claim. See Order in United States v. AseraCare Inc., No. 12-cv-00245 (N.D. Ala. Mar. 31, 2016). The district court’s holding that “contradiction based on clinical judgment or opinion alone cannot constitute falsity under the FCA as a matter of law” buttresses potential defense arguments in suits involving issues of medical necessity or other judgment calls, including alleged upcoding.
In a stunning reversal, a federal district court overseeing the AseraCare trial has not only vacated a verdict in favor of DOJ on the issue of whether claims submitted by the defendant were false, but has strongly indicated that the court is likely to grant summary judgment for the defendants. As we have previously reported here and here, in May 2015, the district court elected to bifurcate the trial into two phases, one focused on the falsity of a sample of claims and the second phase focused on the remaining elements of FCA liability. If the government could establish FCA liability through the two phases of the trial as to at least a fraction of the sample, the court planned to permit extrapolation of this liability to the broader universe of claims submitted by AseraCare. A critical issue in the falsity phase has been whether patients met CMS’ medical criteria for hospice eligibility, i.e., they have “a life expectancy of 6 months or less if the terminal illness runs its normal course.” Prior to the court’s decision to bifurcate, the government represented in interrogatories that it would only use the testimony of its expert witness and the sampled medical records to demonstrate that patients did not meet CMS’ criteria, and therefore AseraCare falsely certified to their eligibility for hospice care.
Posted by Kristin Graham Koehler, Monica Groat, and Marina Romani (Summer Associate)
As we have previously discussed on this blog, a court in the Northern District of Alabama last month granted AseraCare’s motion to bifurcate its trial. On June 25, 2015, the court refused the Government’s request to reconsider that decision.