A controversial decision could be a "nightmare" for the government, a legal expert says.

A federal judge has dismissed a nearly 3-year-old False Claims Act case against Trilogy Health Systems, but the whistleblower who made the original overbilling allegations will be allowed to pursue a related wrongful termination suit.

The case, unsealed earlier this month, pitted Amanda Davis against the healthcare system, which has more than 80 skilled nursing facilities in the Midwest. A former occupational therapist, Davis worked worked at the company’s River Pointe Health Campus and occasionally at other locations in southern Indiana.

In a 37-page suit filed in July 2015, Davis claimed Trilogy routinely misclassified patients into Ultra-High therapy levels and that she witnessed “corporate pressure” on employees to “engage in fraudulent practices.” She alleged that rehab directors argued with therapists over whether patients should be discharged.

Her case was later amended to include more Trilogy facilities, including Trilogy Rehab Services, and a second whistleblower.

But the federal government declined to intervene in the case this March, and Indiana had also done so. A U.S. judge on May 2 dismissed six of eight counts earlier this month, allowing Davis to continue her fight for damages related to being “discharged or otherwise discriminated against” in her employment.

The case had remained sealed throughout its entirety, and it was unclear Wednesday why Davis and co-relator Ashley Vinson stipulated the partial dismissal.

Neither Trilogy Health Services nor an attorney for Davis returned calls from McKnight’s seeking comment Wednesday.

According the to the initial complaint, Davis worked for Trilogy from March 2011 until July 2013.

The case outlined 16 examples of residents, including some with end-stage dementia or COPD, allegedly being pushed to do therapy or cases assigned to other therapists when Davis refused to force the beneficiary to participate in further care.

“The retaliation against Relator consisted of several adverse employment actions including, but not limited to. Termination,” Davis’ attorney wrote.

Though Davis sought triplicate damages under the law for her false claims allegations, the damages related to her firing had not yet been argued.