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Qui Tam Lawsuit to Proceed Against Hospice Care Provider Care Alternatives

DATE: March 4, 2020

PHILADELPHIA, March 4, 2020 – Berger Montague is pleased to announce that the Third Circuit has overturned a previous ruling and will allow a qui tam case brought by Managing Shareholder Sherrie R. Savett, Shareholder Russell D. Paul, and co-counsel to continue against Care Alternatives. The case is United States of America and State of New Jersey ex rel. Victoria Drudging, et al. v. Care Alternatives.

Berger Montague and co-counsel Begelman & Orlow represent four former employees of Care Alternatives, a hospice care provider. The whistleblowers allege that patients were inappropriately certified for and given hospice care when there was no clinical information or documentation in the patients’ charts supporting a prognosis of terminal illness.

Previously, the District Court had granted Care Alternatives’ motion for summary judgment, applying a standard adopted by the 11th Circuit in a separate qui tam case (Aseracare) regarding the False Claims Act’s falsity element. The 11th Circuit had ruled that a difference of medical expert opinion was not enough to show falsity and that additional evidence was required.

On March 4, 2020, the Third Circuit overturned the District Court’s decision, rejecting its reasoning. The Third Circuit found that a subjective medical opinion may be false, and an expert’s testimony challenging a physician’s medical opinion is enough to create a genuine dispute of material fact for the jury to consider whether that medical opinion is false.

“This is a tremendous victory for the entire qui tam bar that preserves the viability of medical necessity cases under the False Claims Act,” said Mr. Paul, who argued the case before the Third Circuit. “If the District Court opinion was not overturned, a battle of the experts would nearly always result in summary judgment for defendant.”

Berger Montague’s Whistleblower, Qui Tam & False Claims Act Practice Group has represented whistleblowers in matters involving healthcare fraud, defense contracting fraud, IRS fraud, securities fraud, and commodities fraud, helping to return more than $3 billion to federal and state governments. In return, whistleblower clients retaining Berger Montague to represent them in state and federal courts have received more than $500 million in rewards.

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