Judge rules for Beverly and Aegis in FCA whistleblower lawsuit

A nursing home and a rehab therapy provider recently beat a federal whistleblower lawsuit because the government's expert witnesses relied on the wrong standard to show why certain therapy services were “medically unnecessary.”

The providers were granted summary judgment in the False Claims Act lawsuit because no specific instances of false claims were cited, and the witnesses wrongly said “significant” improvement would be needed in patients instead of “material improvement.”

The suit stemmed from a complaint a former Aegis physical therapist filed in April 2010, alleging the company and Beverly Health & Rehab Center-Jesup in Georgia billed Medicare for services that were medically unnecessary. The individual also accused Aegis of providing excessive therapy services to maximize reimbursement.

A physician and nurse who testified for the government relied on a newer standard when making the determination that those services were medically unnecessary because they wouldn't be expected to result in “significant” improvement in the patients. The defendants successfully argued that “material improvement” is the correct improvement standard for therapy in a skilled nursing setting under Part A.

U.S. District Court Judge Lisa Godbey Wood said that the experts' use of “significant” instead of “material” would only serve to confuse jurors, according to Bloomberg news services, and that the government “had only unsubstantiated allegations of medically unnecessary care, and no allegations of specific false claims or those showing business practices likely to result in false claim submissions.”