The Eleventh Circuit Court of Appeals partially affirmed a decision in favor of Arkansas-based hospice provider AseraCare in False Claims Act (FCA) case that has widespread implications for the hospice industry. The appellate court agreed with the Northern District of Alabama that a mere difference of physician’s opinions on a terminal patient’s prognosis does not indicate falsity under the FCA.
Arguments in the United States vs. Aseracare have tried to untangle the complex question of whether live discharges from hospice care were the result of deliberate fraud or occurred because of the inherent difficulty of predicting a patient’s life expectancy.
“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,” AseraCare said in a statement.
While partially affirming the Northern District’s decision, the Eleventh Circuit sided with the government’s position that the district court should have considered all the evidence in the record to determine whether grounds for trial existed. The case will be remanded back to the district court to resolve this, but the appellate court stipulated that any further evidence of falsity brought by the government must be linked to the specific 123 claims named in the case.
When the initial case was filed, a physician witness for the government reviewed 233 patient records and found that most of the patients should have been found ineligible for the Medicare Hospice Benefit. Other physician witnesses backed AseraCare, saying that they too would have determined that the patients in question should have been referred to hospice.
The government appealed the case after a lower court sided with AseraCare on the grounds that physician witnesses could not reach consensus on the medical necessity of hospice care for the patients, making culpability unclear. The judge’s decision overruled the jury who had sided with the government.
The National Hospice & Palliative Care Organization (NHPCO) had filed an amicus brief backing AseraCare.
“If the government (in this case, the Centers for Medicare and Medicaid Services) accepts a Medical Director’s determination of a terminal prognosis and approves a beneficiary’s claims for hospice care services,” NHPCO President Edo Banach said. “CMS cannot come back and demand repayment based on a change of opinion on prognosis or medical necessity,”
The U.S. Centers for Medicare & Medicaid Services and the U.S. Department of Justice in recent years have increasingly scrutinized hospice providers because of live discharges and re-certifications. These issues have resulted in an increasing number of CMS audits, Health and Human Services Inspector General investigations, and litigation. An Optima Health survey earlier this year found that fewer than 50 percent of hospice providers felt prepared to respond to such scrutiny.
In a 2017 case, Chemed Corp. (NYSE: CHEM) agreed to pay a $75 million settlement on behalf of its subsidiary VITAS Hospice Services, in a False Claims Act case also centered on live discharges.
“Settlements involving allegations about medical necessity of hospice services continued to dominate enforcement actions this last year,” John Kelly of the Law Firm Bass, Berry, and Sims told Hospice News. “Hospice organizations should be particularly mindful of the patients they are particularly mindful of the patients they are accepting and ensure that the appropriate documentation is retained.”