Appeals Court Dismisses False Claims Case Against Bethany Hospice

The Eleventh Circuit of the U.S. Court of Appeals has upheld a lower court’s dismissal of a False Claims Act and anti-kickback case against Georgia-based Bethany Hospice & Palliative Care and two affiliates. The court cited a lack of specific details related to the alleged false claims in its decision.

FCA cases often hinge on the question of patient eligibility for hospice care based on a six-month terminal prognosis. In the Bethany case, the alleged whistleblowers failed to produce any particular examples of the hospice filing a false claim.

“Relators argue that the district court erred when it concluded that their complaint failed to plead with particularity Bethany Hospice’s kickback scheme, submission of a false claim, and certification of a false statement,” the appellate court indicated. “We agree with the district court that Relators failed to plead with particularity the submission of an actual false claim, and that shortcoming is fatal to Relators’ case.”


The case centered around a qui tam complaint. This occurs occurs when a whistleblower, called a “relator” by the courts, files a False Claims Act suit on behalf of the government and possibly receives a portion of any funds recovered by the government via the lawsuit, typically ranging from 15% to 25%.

Prior to this appeal, U.S. District Judge William T. Moore originally dismissed the suit in March 2020,citing the same lack of detail as the appellate court. The relators’ complaint did not include specific dates or amounts of alleged improper payments, nor did it identify any patient involved.

Hospice organizations are under increasing legal and regulatory scrutiny related to medical necessity complaints under the False Claims Act and the closely related anti-kickback statute. Documentation errors and omissions, live discharges and lengths of stay beyond six months are the main red flags that could bring regulators to a hospice’s doorstep.


In January, the U.S. Department of Treasury reported that enforcement efforts had recovered more than $3 billion during the previous fiscal year from False Claims Act cases. About 2.6 billion of those dollars stemmed from lawsuits involving the health care industry, including hospice organizations.

A February report from Bass, Barry, and Sims shows that a leading cause of fraud involves hospices billing Medicare for services for which patients were not eligible. This resulted in several multi-million dollar settlements during 2020, with amounts ranging from $1 million to $5.25 million.

“For several years, courts have wrestled with the question of whether subjective clinical decisions about the types and amounts of treatment patients may need can be false for purposes of establishing FCA liability,” the firm’s report indicated. “Health care providers have long argued that they cannot.”

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