The U.S. Court of Appeals for the Third Circuit has been asked to take up a False Claims Act case against a provider of end-of-life care after a federal judge dismissed the claims of four former employees who said they were pressured to admit patients who were ineligible for hospice services.
In Druding v. Care Alternatives, the plaintiff-relators filed a notice of appeal on Monday following a Sept. 27 dismissal of the case on a defense motion for summary judgment.
In granting the summary judgment motion, the court found the plaintiff-relators did not adduce sufficient evidence of falsity to raise a genuine dispute of material fact.
The plaintiffs claimed in their 2008 lawsuit that Care Alternatives Inc. of Cranford, now known as Ascend Hospice, instructed employees to falsify patient records in order to meet Medicare criteria, and that those who did were rewarded with bonuses.
The federal government was ordered to advise if it would intervene in the case in 2009, and stayed the case in 2010 while it investigated and contemplated whether to intervene. In 2015, the government notified the court it would not intervene, but remains in the case as an interested party.
In 2016, U.S. District Judge Jerome Simandle rejected Care Alternatives’ motion to dismiss the suit, rejecting its assertion that the rules and regulations at issue are a condition of participating in Medicare, as opposed to a condition of payment.
But Simandle, citing decisions from the Northern District of Alabama and the Northern District of Texas, said on Sept. 27 that each patient identified by the Druding plaintiffs as inappropriate for hospice care had been certified by appropriate physicians for the hospice benefit, as required by federal law. The plaintiffs have not presented any evidence that the doctors received kickbacks to certify those patients, and have not accused any physicians of certifying a patient that that doctor believed was ineligible for hospice, Simandle said.
Therefore, he said, plaintiffs have not adduced evidence of objective falsity from which a reasonable fact finder could conclude that Care Alternatives submitted any false claims for Medicare reimbursement for any of the hospice patients identified in the complaint.
In addition, plaintiffs failed to provide evidence to support their theory that Care Alternatives’ patients’ medical records were falsified or altered, Simandle said.
The judge added that opinions of an expert witness presented by the plaintiffs, which said that some of the patients cited in the suit were improperly admitted into a hospice program, contrary to the opinion of a defense expert, does not “create a genuine issue of material fact about the falsity of a physician’s determinations that the patient meets hospice eligibility where, as here, there is no factual evidence that Defendant’s certifying doctor was making a knowingly false determination. This is because the ultimate issue is not whether the certification of hospice eligibility was correct or incorrect, but whether it was knowingly false,” Simandle said.
The plaintiff-relators were represented by Regina Poserina and Ross Begelman of Begelman & Orlow in Cherry Hill, and Russell Paul and Sherrie Savett of Berger Montague in Philadelphia.
Begelman said he was confident the decision would be overturned on appeal.
“While we have the highest respect for Judge Simandle, we believe he was mistaken in following a theory called objective falsity, which was issued by a district court outside the Third Circuit,” Begelman said. “While several circuit courts have disavowed that theory, the Third Circuit has never ruled on this issue, and we are hopeful and confident that the Third Circuit will reverse the judge on this issue.”
William Jordan of Alston & Bird in Atlanta, who represented Care Alternatives, could not immediately be reached for comment.
The company said in a statement, “Care Alternatives said from the very start of this litigation that the allegations of impropriety were legally flawed and factually baseless. Ascend, which together with its sister companies Care One and Partner Pharmacy, provide long term care, hospice, pharmacy and home care services, are committed to having one of the best—if not the best—compliance programs in the industry. We are pleased that the Court recognized our companies’ culture of compliance, validated that Ascend acted ethically, and finally disposed of this case once and for all.”