Department of Justice Intervenes in False Claims Act Case Separation

The U.S. Department of Justice has entered an Alabama False Claims Act trial in an effort to advise against a hospice chain’s request to divide its upcoming trial into two separate phases.

The chain, AseraCare Inc., was granted a division of its trial by a district judge, but the DOJ officials believe the separation of the trial is an unprecedented and impractical action in the whistleblower case. The district judge allowed the split believing it would provide a more fair trial to AseraCare by dividing the examination of the lawfulness of company billing practices from the examination of whether company executives knew of any unlawful activity.

The DOJ stated that it believes the split will foster inevitable disagreements over the validity of each piece of evidence, which will take an unnecessarily prolonged amount of time and ultimately cause confusion in the jury. According to the DOJ, the division will also interrupt the lives of witnesses who will not only be required to attend both halves of the trial, but will also need to split their testimony into two separate parts.

Currently, the trial is set to have phase one determine if the company’s billing claims to Medicare were objectively false. Phase two will review whether the company’s executives were aware of any falsities that may have taken place. The DOJ has stated that the division of the case is “extraordinary,” and no similar action has occurred since the formation of the False Claims Act in 1863.

Three complaints were filed by six whistleblowers against AseraCare, who allegedly misled physicians into providing proof of patient eligibility for hospice care for patients who were not terminally ill. Of 200 records reviewed by a government official, approximately half included ineligible patients.

If you believe fraudulent activity is happening within your workplace and would like information on filing a report, contact Steve Kardell at Whistleblower Law for Managers today.