A Colorado federal court rejected an “alter-ego theory” argument in a recent False Claims Act lawsuit against UnitedHealth Group Inc.

However, the judge did allow the rest of the case to go forward, finding that the plaintiffs showed sufficient evidence for the other allegations in the whistleblower lawsuit.

U.S. District Judge Philip A. Brimmer ruled that plaintiffs Terry F. and Lyssa T. could go forward with their whistleblower lawsuit, after finding that the defendant’s Evercare Hospice Inc. division had submitted false data to the Centers for Medicare and Medicaid Services.

Evercare allegedly submitted medical care bills to these government agencies for patients who were supposedly terminally ill. The reality was quite the contrary, as a number of these patients were not terminally ill and therefore not covered under Evercare’s government contract.

Judge Brimmer has rejected Evercare’s argument of treating certified terminally ill patients was that of participation, not payment, in the Medicare hospice program. Instead, any invoice the hospice company sent to the government for terminally ill patients, has been subject to FCA enforcement.

Whistleblower Lawsuit Allegations

According to Medicare, in order for a patient to receive hospice care they must be expected to die within six months. However, Evercare allegedly targeted seniors with dementia and chronic illnesses that would not kill the patients anytime soon.

Evercare attempted to have the whistleblower lawsuit dismissed arguing that the misunderstanding stemmed from the doctors’ misdiagnoses of the patients’ condition. However, according to the lawsuit doctors did not actually examine the patients the majority of the time and instead relied on nurses’ reports.

Essentially the whistleblower lawsuit claims that Evercare and its associates have defrauded the government out of Medicare benefits for patients who were not terminally ill. Legal sources state that the U.S. Department of Justice is also targeting Evercare and its affiliated partners for their fraudulent actions.

Government Fraud

As severe as the allegations are against Evercare, these cases are becoming all too common across the country. Medicare fraud is becoming increasingly common, and is characterized by companies billing the government for services or supplies that were never given to Medicare patients, or falsifying documents to qualify for Medicare benefits.

Due to the fact that government fraud is becoming more commonplace, the number of employees who witness these actions are choosing to hold their employers accountable by filing qui tam lawsuits.

In the case of Evercare, several whistleblowers stepped forward and outed their employer’s scheme. The employees who filed the qui tam lawsuit are Lyssa and Terry, who claim they repeatedly complained about the conduct of their employers.

Whistleblowers are individuals who are willing to report fraud or illegal activities their employers commit against the government, which often results in defrauding the government of millions. This will help the government recover its losses, and insure that its benefits will go to the patients that truly need it.

The Whistleblower Lawsuit is U.S. ex rel. Terry F. et al. v. Evercare Hospice Inc. et al., Case No. 1:11-cv-00642, in the U.S. District Court of Colorado.