In an action especially significant to hospice providers but also other healthcare providers regarding the determinations of medical necessity for Medicare billing purposes, the US Department of Justice (DOJ) and AseraCare have just agreed, following a mediation, to settle for $1 million the long-running False Claims Act qui tam litigation matter in which the United States had previously sought $200 million in liability.

In its press release, Aseracare said the settlement involves a single payment and will not require a corporate integrity agreement with the HHS Office of Inspector General.

This settlement comes after DOJ’s motion to reopen discovery was denied by the trial court on remand. The trial court opinion denying further discovery in the 10-year-old case noted that the case has always been about whether Aseracare knowingly submitted false claims to Medicare by certifying patients as eligible for hospice care, and never involved billing for services not rendered or phantom patients—real fraud.

Rejecting DOJ’s request to offer more medical testimony to support falsity, the court noted that evidence from DOJ’s original medical expert and its CMS witness established blaring evidence in the trial record that the only evidence of falsity is disputed medical opinion. The court noted that DOJ never presented or proffered evidence at trial to link improper certification evidence to the actual patient sample presented in the case, and was not going to be able to reopen the case to fish for that evidence.

Morgan Lewis has been following this matter closely and will provide further analysis on the settlement and its implications in the coming days. Read more of our prior coverage of this case:

Eleventh Circuit Shows the Way in Aseracare Decision: Why Mere Differences of Clinical Opinion Cannot Be Fraud Under the False Claims Act

United States v. AseraCare: Court Debunks Theory That Mere Clinical Disagreement Can Support FCA Liability

Fast Break: AseraCare