Yesterday’s AseraCare trial began like all others with the empaneling and swearing in of the jury. However, unlike juries in other False Claims Act trials, this jury will only be provided with a narrow slice of the evidence. Judge Bowdre has divided the trial into phases and, in an unusual move, has severely restricted what the Phase One jury will consider.
Although there are several legal elements that must be established to find AseraCare liable of a False Claims Act violation, the Court has ruled that the jury must at least initially decide those elements in isolation, beginning exclusively with the element of “falsity.” (For “falsity,” the jury must determine for each of the 233 Medicare beneficiaries identified in the Government’s sample whether the bills and accompanying representations that AseraCare made to the Government regarding the beneficiaries’ medical condition and hospice eligibility were untrue.)
Despite the fact that they are interwoven with a falsity determination, the other elements of False Claims Act liability, such as “knowledge” (i.e., whether AseraCare submitted those false claims to the Government with knowledge), and “materiality” (i.e., whether the false statements were material to the Government’s decision to pay AseraCare for its hospice services) will not be decided, if at all, until a second trial, and only then if the Phase One jury finds that some of the claims were false.
While judges regularly bifurcate trials into two phases – one determining liability and the other determining damages (assuming liability is found in the first phase), it is unusual in False Claims Act cases for the court to proceed element by element, holding separate mini-trials on each of the individual elements of liability. This unorthodox approach undermines the jury’s ability to examine the elements of False Claims Act liability in their totality and forces the jury to make its determinations by only holding one puzzle piece at a time rather than being permitted to lay them out together to see how they fit.
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