Aseracare Settles False Claims Act Suit for $1 million

Hospice provider AseraCare has agreed to a $1 million settlement with the U.S. Department of Justice in a longstanding Qui Tam False Claims Act (FCA) case that began in 2008. The outcome of the case could set an important precedent as FCA suits continue to be the most prevalent enforcement actions that target hospices in the courts.

Though the company was cleared of the allegations, the Department of Justice was given the opportunity to review the evidence and present any new information for further action. Rather than continue to pursue the case in court, Aseracare agreed to the settlement.

Arguments in the United States vs. AseraCare 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. The Eleventh Circuit Court of Appeals in September 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.


“We were made aware of allegations from some prior employees in Wisconsin and in Alabama, and the allegations were that we were taking care of patients that were not medically or clinically qualified for hospice,” said Angie Sells, senior vice president of AseraCare. “I will say that true to our hospice community, there were opportunities to mediate this case or settle this case, but AseraCare’s stance, which we have always kept, is that after reviewing the allegations that we were taking care of patients that deserved hospice and were clinically eligible for hospice, so we decided to take the case to court.”

AseraCare operates 44 locations in 14 states, with an average daily census of 2,200 patients.

When the initial case was filed, a physician witness for the government reviewed 233 patient records and concluded 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.

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 was 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.

“In December of 2019, we met with the judge and she gave us a timeframe for the Department of Justice to come back with any other information that could tie a particular patient to a particular claim. We went to the table in January to talk about can we settle this case and be done with it,” Sells told Hospice News. “We just decided on a settlement of convenience between the two entities — that rather than the Department of Justice spend time and effort trying to find anything else they could tie back, and for us to spend any more money related to the the case — we would settle for a million dollars.” 

During the case, the National Hospice & Palliative Care Organization (NHPCO) had filed an amicus brief backing AseraCare.

NHPCO’s amicus brief argued that a “disagreement among physicians as to an individual’s terminal prognosis based on a review of the individual’s medical record give rise to a FCA violation, ignores the well-recognized difficulty of accurately predicting the end of life and threatens to undermine Congress’s goal of ensuring access to the Medicare hospice benefit where a physician has concluded, in his or her clinical judgement, that a patient is terminally ill.”

The Justice Department did not respond to Hospice News’ inquiries regarding the case.

The U.S. Centers for Medicare & Medicaid Services (CMS) and Justice Department 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. 

This scrutiny thus far shows no sign of slowing down. In another recently adjudicated case, STG Healthcare of Atlanta agreed to pay $1.75 million to resolve FCA allegations.

“As more Americans choose hospice care, more government funding is being provided to this critical service. Unfortunately, scammers are seizing an opportunity to steal precious funding by enrolling ineligible patients in hospice care,” Derrick Jackson, special agent in charge for the Office of Inspector General of the U.S. Department of Health and Human Services said in a statement regarding the STG case. “With our law enforcement partners, we will continue to protect patients and the programs on which they depend.”

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