United States District Court, N.D. Alabama, Southern Division
UNITED STATES OF AMERICA, ex rel. DEBORA PARADIES, et al., Plaintiff,
GGNSC ADMINISTRATIVE SERVICES, LLC, et al., Defendants.
BENJAMIN C. MIZER PRINCIPAL DEPUTY ASSISTANT ATTORNEY GENERAL
JOYCE WHITE VANCE UNITED STATES ATTORNEY LANE HINES WOODKE
DON B. LONG III MARY LESTER Assistant United States Attorneys
MICHAEL D. GRANSTON RENÉE BROOKER JEFFREY A. WERTKIN
CAROLYN B. TAPIE WILLIAM E. OLSON EVA U. GUNASEKERA HOLLY
SNOW CHRISTINA DAVIS Attorneys, Civil Division Commercial
Litigation Branch Counsel for the United States
MOTION FOR RECONSIDERATION OF ORDER TO GRANT A NEW
October 19, 2015, after eight weeks of trial and nine days of
deliberations, the jury completed its Phase One deliberations
and identified 104 patients for whom AseraCare submitted
false claims for hospice services. See ECF No. 465.
These findings were consistent with the facts and governing
on October 23, 2015, the Court sua sponte revisited
the instructions that were provided to the jury. The Court
announced: “I have realized that I committed major
reversible error in the jury instructions, because I do not
believe that I properly instructed the jury as to the legal
standard they had to apply in making that
determination.” Trial Tr. 7304-05.
orally moved for a new trial, and the Court granted
Defendants' motion on the ground that the Court failed to
provide the jury with a “sufficient legal standard for
evaluating the case.” Trial Tr. 7311.
United States respectfully moves the Court to reconsider its
decision to order a new trial on the grounds that the
Court's jury instructions were correct as a matter of
law. Because the Court instructed the jury on the correct
legal standard - the same legal standard that the Court
applied at the summary judgment stage - the Court's
decision to grant a new trial should be reconsidered to avoid
clear and reversible error and to prevent manifest injustice.
twelve weeks since Phase One of the trial began on August 10,
2015, the United States and the Court have expended
considerable taxpayer resources to try Phase One before a
jury of 4 men and 7 women. The jury was provided with
instructions that this Court had previously and correctly
determined were proper and legally sufficient. It would be
grossly inefficient and unprecedented at this stage to
empanel a second jury and force the taxpayers to bear the
expense of a second twelve-week trial in Phase One,
especially because there is a great risk that the Court will
commit reversible error in the second trial by instructing
the jury in the manner that it now contends is required.
Reversible error in a second trial would likely result in a
remand for a third trial. Rather than risk the possibility of
three trials each spanning several months at taxpayer
expense, the Court should proceed with the current verdict,
which AseraCare may then appeal in due course should it elect
to do so.
the court's proposed change in the jury instructions is
contrary to the overwhelming weight of authority and would
risk substantial waste of resources, the United States moves
the Court to reconsider its Order for a new trial.
Medicare hospice benefit is a unique, critically important
healthcare benefit for a very specific population of Medicare
patients - those who are terminally ill with a life
expectancy of only six months or less. See 42 U.S.C.
§ 1395x. When these terminally ill patients are admitted
to hospice, they give up their rights to Medicare coverage
for care intended to cure or rehabilitate, and instead
receive hospice care designed to bring them comfort and
dignity at the end of their lives. See 42 C.F.R.
United States contends that AseraCare put the hospice benefit
at risk by defrauding the Medicare program. Specifically, the
United States alleges that AseraCare operated its for-profit
hospice business without regard to whether it complied with
Medicare rules or provided the right care at the right time
to Medicare beneficiaries. See ECF No. 156 at
¶¶ 35-64 (Complaint in Intervention). As a result,
the United States alleges that AseraCare claimed and received
tens of millions of dollars from Medicare that it was not
entitled to receive because the patients were not terminally
ill and did not need end-of-life hospice care.
of AseraCare's fraudulent scheme were initially brought
to the United States' attention in three separate qui
tam lawsuits that were filed independently by six former
AseraCare employees. The United States intervened in this
False Claims Act (“FCA”) lawsuit against
AseraCare based on evidence that AseraCare marginalized and
circumvented doctors, systematically pressured its own
clinical staff to admit and keep ineligible patients,
submitted false hospice claims for patients who were not
terminally ill, and was put on notice from internal and
external audits and employee complaints that this was
occurring. In short, the United States alleges that AseraCare
committed fraud on the Medicare program, and the United
States brought suit to recover taxpayer funds that AseraCare
wrongfully appropriated as a result of its unlawful activity.
United States filed its Complaint in Intervention against
AseraCare on November 2, 2012. After years of discovery, the
Court heard cross-motions for summary judgment. AseraCare
moved for summary judgment challenging the United States'
evidence regarding the falsity element of its FCA claims. On
December 4, 2014, the Court denied AseraCare's motion
after finding that the testimony of the United States'
medical expert “creates issues of material fact
regarding whether clinical information and other
documentation in the medical record support the
certifications of terminal illness, a pre-requisite for
payment of a Medicare Hospice Benefit claim.” ECF No.
268 at 15 (Order on Summary Judgment).
20, 2015, over the United States' continuing objection,
the Court took the extraordinary and unprecedented step of
bifurcating the trial by splitting elements of FCA liability
so that the trial would proceed in two phases: the first
phase would address the falsity element of the United
States' FCA claim, and the second phase would address the
other elements of the United States' FCA claim and all
other claims. ECF No. 298 at 4-5 (Order on Bifurcation). The
Court found that evidence that AseraCare actually
knew it was submitting false claims could unduly
prejudice AseraCare when a jury evaluated the question of
whether the claims it submitted were, in fact, false.
Id. at 2-4. To avoid this “undue
prejudice” to AseraCare, the Court adopted an approach
that required the United States to prove the falsity of
hospice claims while at the same time prevented the United
States from presenting otherwise admissible evidence about
how and why AseraCare carried out its fraudulent scheme.
Id. at 3.
One of the bifurcated trial began with jury selection on
August 3, 2015. Over the course of several months, the United
States introduced approximately 200 exhibits and presented
the testimony of a medical expert as well as former AseraCare
employees who testified about AseraCare's improper
clinical practices, including its instructions to staff to
admit ineligible patients to hospice.
jury began Phase One deliberations on September 30, 2015. The
jury was asked to determine whether AseraCare submitted false
claims for any of the 121 patients discussed at trial and, if
so, for what time period. After nine days of deliberations,
the jury returned a verdict on October 15, 2015, concluding
that AseraCare submitted false claims for 104 of the 121
patients listed in the Special Interrogatories. ECF No. 445.
October 19, 2015, the Court asked the jury to clarify its
interrogatory responses with regard to 6 patients. ECF No.
445. The same day, the jury deliberated and returned with
only minor modifications to its interrogatory responses
concerning periods of ineligibility for those 6 patients. ECF
The Legal Standard Identified by the Court at Summary