DOJ Joins AseraCare Hospice Whistleblower Lawsuit

By Kimberly Mirando

(LEGAFI) -- The Department of Justice has announced it has intervened in a whistleblower lawsuit that claims a hospice company operating in 19 states defrauded Medicare out of payments for patients who were terminally ill.

The whistleblower lawsuit accuses AseraCare Hospice of fraudulently cycling patients through nursing homes and hospice care in order to milk Medicare’s hospice benefit. Employees were allegedly pressured into enrolling people into hospice who weren’t dying and resisted discharging them despite evidence they weren’t deteriorating, the AseraCare whistleblower lawsuit charges.

The AseraCare Hospice whistleblower lawsuit was originally filed in 2009 by two former AseraCare employees who worked at locations in Alabama. The whistleblowers contend that AseraCare first recruited patients eligible for skilled nursing for 20 days, for which Medicare pays the entire bill. After 20 days, when Medicare requires patients to pick up a part of the tab, AseraCare had the nursing homes send the patients to hospice, they allege in the whistleblower lawsuit. In hospice, AseraCare would collect a flat payment from Medicare for each day they are enrolled.

The U.S. Attorneys Office said in a statement that AseraCare Hospice violated the federal False Claims Act when “it misspent millions of taxpayer dollars intended for Medicare recipients who have a prognosis of six months or less to live and need hospice care."

The False Claims Act allows private citizens with knowledge of fraud to file a whistleblower lawsuit on behalf of the U.S. government and to share in any recovery.

If the Justice Department intervenes in an action and proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim, according to the U.S. Attorneys press release. Whistleblowers can receive up to 30% of any recovered funds.

AseraCare Hospice denies any wrongdoing alleged in the case.

"We are disappointed by the Department of Justice's decision to intervene in the qui tam litigation. This action is especially troubling because we believe it could constrain certain patients -- most notably those who suffer from unpredictable disease -- from utilizing the hospice benefit. The allegations contained in the complaint are without merit, and AseraCare operates in full compliance with the law," said an attorney representing AseraCare.

The law firm which filed the whistleblower lawsuit on behalf of the AseraCare employees issued the following statement: "We are pleased that the US Department of Justice, after thorough investigation and in consideration of the fact that these corporations have a history of abusing the Medicare system, has elected to intervene in this action.”