What ‘Significant’ AseraCare Ruling Means for Home Health Providers

A recent hospice-related court ruling may impact how federal watchdogs and whistleblowers go after home health agencies moving forward.

Last month, the U.S. Court of Appeals for the Eleventh Circuit issued its long-anticipated decision in United States vs. AseraCare, a winding legal battle involving false claims allegations dating back to 2008. Hospice companies, other Medicare-reimbursed health care organizations and legal experts had all been holding their breath on an AseraCare decision for well over a year.

“[The case] could decimate all prosecution of hospice cases,” Mike Bothwell, attorney and founder of Georgia-based Bothwell Law Group, previously told Home Health Care News.


In its decision, the U.S. Court of Appeals for the Eleventh Circuit essentially found that differences in doctors’ medical opinions alone do not constitute falsity under the False Claims Act (FCA).

The decision partially affirms a previous ruling, and the case is now being remanded back to a lower court for further consideration. 

Allegations against AseraCare are linked back to a period between 2008 and 2010, when former employees accused the for-profit, multi-state hospice and palliative care chain of engaging in fraudulent activities to boost profits. Specifically, employees reported that AseraCare had knowingly submitted false claims to Medicare for hospice care for patients who were not terminally ill, among other allegations.


Eventually, the U.S. government became involved in the case. A physician witness for the government reviewed more than 230 patient records, determining that most of the patients AseraCare billed for should not have been found eligible for the hospice benefit. 

Other physician witnesses disputed those findings, hence the crux of the case: Can dueling doctor opinions constitute fraud?

“This was the pivotal issue, whether a doctor looking at a file — or any expert looking at the cold record — could simply disagree with the prior physician’s certification and that alone would constitute falsity under the False Claims Act,” Kathleen McDermott, a partner in the health care group of legal firm Morgan Lewis, told HHCN.

While the AserCare case focuses on hospice, all providers should brush up on the recent updates, McDermott said.

“I think this is going to impact how investigations are done across the board in health care,” she said. “Sloppy, throw-it-together evidence gathering is not going to work as well in this context.”

“All in all, this is a very significant decision,” McDermott added.

Besides dueling medical opinions, the AseraCare decision also pertains to extrapolation and how the government reviews claim samples.

Broadly, the court maintained that falsity evidence must be linked to the government’s actual samples of false claims. In other words, general anecdotal information about business practices — unrelated to the proffered false claims — is not evidence of falsity for FCA purposes.

“This point is really important for all of the health care providers that are defending investigations challenging medical necessity,” McDermott said. “The court said you have to have falsity evidence that goes with the sample. It just can’t be generic evidence about the company’s practices that are unrelated to the sample.”

Representatives from AseraCare weighed in the U.S. Court of Appeals for the Eleventh Circuit’s opinion in a statement.

“This opinion provides comfort for the physicians who are making these difficult determinations related to terminally ill patients as well as the hospice providers who are reimbursed by Medicare for services for these patients,” they noted.

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