Biggest-Ever Hospice False Claims Case Gets New Trial

U.S. District Court Judge Karon Bowdre ordered a new trial Monday in a False Claims Act case asserting that a hospice provider fraudulently billed Medicare for patients—and the fault for the new trial is her own, the judge stated.

The case is seeking to determine whether AseraCare, a subsidiary of Plano, Texas-based Golden Living, admitted Medicare beneficiaries who were ineligible for end-of-life care in order to rake in more money.

The first phase of the trial — which had been divided into two phases — ended on Oct. 19. The jury determined that AseraCare, which operates approximately 60 hospices in 19 states, had fraudulently billed for 104 of 121 patients.

When granting AseraCare’s request for a new trial, the Alabama federal judge said she had given the jury “incomplete” instructions prior to their deliberations in the first phase of the trial, reported. The second phase of the trial was originally scheduled to start on Oct. 26.

Bowdre said she did not include essential statements of the False Claims Act law in her jury instructions, such as the notion that claims are not false under that law when reasonable people can disagree on whether the hospice care was properly billed to the government, reported.

During the second phase of the trial, the jury was expected to hear claims that AseraCare pressured doctors and nurses to sign patients up and keep them in Medicare-funded hospice care.

Bowdre said the new trial, with a new jury, would start sometime after Jan. 1, 2016, reported.

AseraCare attorneys had asked Bowdre for a new trial after she said she realized she had committed “major reversible error” in the jury instructions, according to a motion filed Oct. 26 by U.S. Department of Justice (DOJ) attorneys.

The filing was a motion for reconsideration of the order to grant a new trial. In the document, the DOJ says Bowdre’s jury instructions “were correct as a matter of law.”

The judge granted AseraCare’s motion on the basis that she had failed to provide the jury with a “sufficient legal standard for evaluating the case,” the filing said.

“It would be grossly inefficient and unprecedented at this stage to empanel a second jury and force the taxpayers to bear the expense of a second twelve-week trial in phase one, especially because there is a great risk that the court will commit reversible error in the second trial by instructing the jury in the manner that it now contends is required,” the DOJ said in its motion.

DOJ attorneys also said a reversible error in a second trial would likely lead to a remand for a third trial.

If a jury ultimately finds against AseraCare, the hospice agency could have to pay more than $200 million, including fines and additional penalties — the biggest False Claims Act penalty ever involving a hospice provider.

Written by Mary Kate Nelson