A fraud and anti-kickback suit against Georgia-Based Bethany Hospice & Palliative Care LLC may be headed to the U.S. Supreme Court. Attorneys for two former Bethany employees have filed a petition to the nation’s highest court after the Eleventh Circuit of the U.S. Court of Appeals dismissed the case in May due to a lack of detail in the complaint.

FCA cases often hinge on the question of patient eligibility for hospice care based on a six-month terminal prognosis. The Bethany case centers 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%.

“Relators’ claim that their status as ‘corporate insiders’ allowed them to acquire personal knowledge of Bethany Hospice’s allegedly fraudulent activity,” court documents obtained by Hospice News indicated. “Specifically, Relators allege that Bethany Hospice operated an illegal referral scheme in which Bethany Hospice paid doctors in exchange for patient referrals.”

Lower courts rejected the case, citing a lack of specific dates or amounts of alleged improper payments. The claim reportedly also failed to identify any of the patients involved, the court determined.

The Bethany case is the second hospice fraud complaint brought to the Supreme Court’s doorstep this year. In February, the court declined to hear an FCA case involving the hospice provider Care Alternatives. In United States ex rel. Druding v. Care Alternatives, the Third Circuit Court of Appeals had ruled that when a reasonable difference of opinion occurs between physicians concerning a hospice patient’s prognosis, it can be resolved by a jury.

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.”