The federal government has decided to appeal a ruling in an unusual fraud case involving hospice care provider AseraCare, in which a judge ruled that disagreements between doctors over patients' eligibility for hospice care do not prove fraud.
The government filed a notice Friday saying that it would appeal both the decision in the case and the way a federal district court judge handled it. The government had alleged that AseraCare knowingly submitted false claims to Medicare for beneficiaries who were not eligible for end-of-life care based on their medical records. AseraCare, however, had argued that reasonable minds can differ on whether a person is eligible for hospice care.
Federal law requires two physicians to certify that a person is likely to live no longer than six months in order for a person to be eligible for hospice care.
U.S. District Court Judge Karon Owen Bowdre sided in March with AseraCare, saying, “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.”
The government said in a court document Friday it will appeal that ruling. It also said it will appeal parts of the way the case was handled.
AseraCare said in a statement Friday that it respects the government's right to appeal, but continues to agree with the district court's decision that differences of opinion between physicians “is not sufficient evidence to prove that a claim is false.” AseraCare is a subsidiary of Plano, Texas-based Golden Living, which operates in 19 states.
Judy Waltz, a partner at Foley & Lardner who represents providers, including hospices, said she's not surprised the government decided to appeal. But she said if the appeals court rules against AseraCare in the case, it could mean trouble for hospices and other providers.
If the government wins the appeal, that would mean, in the 11th Circuit at least, that the opinions of government physicians would trump those of the physicians actually dealing with the patients.
“I agree that an unsupported diagnosis or assessment isn't appropriate but if there's documentation that supports the decision, then I think there really needs to be … a real deference to the treating physician or attending physician, the person who's actually there,” Waltz said.
The decision in the case takes on particular importance because so few False Claims Act cases are actually decided in court. Most settle because of the large amounts of money at stake. Providers found liable in such cases can face triple damages and penalties for each false claim submitted.
But Mary Inman, a partner at Constantine Cannon who is not involved with the case, said it's important the government prevail in its appeal so the judge's unusual approach to the case isn't validated.
For one, Bowdre split the case into two parts—one addressing whether the claims were false and the other whether the false claims were knowingly submitted. Experts say that's a highly unusual way to handle a False Claims Act case. Bowdre reached her decision after the first part of the trial, eliminating the need for a second part.
Inman said that split put the government at a disadvantage because it couldn't introduce certain evidence during the first part of the trial.
“There are a lot of these cases out there, False Claims Act cases for hospice fraud,” Inman said. “If this were just to left to stand it could be very damaging to these types of cases and the ability to proceed under theories that are very typical and well-trodden paths.”
The government also plans to appeal Bowdre's earlier decision to grant a new trial to AseraCare. In October, an Alabama jury actually decided the first part of the case, ruling against AseraCare, finding 104 hospice claims to be false, or unsupported. The judge, however, threw out that decision, saying she had given the jury an incorrect instruction.
