Judge Throws Out Biggest-Ever Hospice False Claims Case

A lawsuit that could have resulted in a $200 million False Claims Act (FCA) penalty against a Texas-based hospice provider has been thrown out.

Disagreements among doctors over whether patients should be eligible for hospice care do not alone prove fraud, according to the Alabama judge who dismissed the FCA lawsuit against AseraCare Inc. on Thursday. The penalty would have been the largest FCA penalty against a hospice provider in history.

Specifically, the U.S. Department of Justice (DOJ) cannot prove fraud based only on one medical expert’s disagreement with a hospice provider’s diagnoses of terminal illness, U.S. District Judge Karon O. Bowdre stated in a seven-page opinion issued on March 31.


“When hospice certifying physicians and medical experts look at the very same medical records and disagree about whether the medical records support hospice eligibility, the opinion of one medical expert alone cannot prove falsity without further evidence of an objective falsehood,” Bowdre wrote.

The case, U.S. ex rel. Paradies et al. v. AseraCare Inc. et al, was 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. Individuals can legally be considered for the Medicare hospice benefits only if they are diagnosed as terminally ill with a life expectancy of six months or less.

AseraCare operates approximately 60 hospices in 19 states, with about 10,000 patient admissions every year, according to court documents.


Prior to Thursday’s opinion, Bowdre had divided the trial into two parts. In the first, the DOJ would attempt to prove objectively false billing, and a different trial in which the DOJ would attempt to demonstrate that the false billing was done deliberately.

Lawyers on both sides of the FCA bar suggested Thursday that the DOJ will probably appeal the judge’s decision, due to both the dollars at stake and the legal principles, Law360 reported.

Written by Mary Kate Nelson

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