The Supreme Court on Monday turned down a request by Brookdale Senior Living to review a case, first brought in 2012, that alleges fraudulent Medicare billing of approximately $35 million by the country’s largest senior living company.
The court did not provide a reason for declining to consider Brookdale’s petition, filed in November, which was supplemented by friend-of-the-court briefs from the American Health Care Association / National Center for Assisted Living and the National Association for Home Care & Hospice.
A spokeswoman for the Brentwood, TN-based company told McKnight’s Senior Living that Brookdale didn’t have any comment beyond what the company had told the court.
As McKnight’s Senior Living previously reported, “whistleblower” plaintiff Marjorie Prather, a utilization review nurse at Brookdale, alleged that in late 2011, the company began having her review claims for home healthcare provided to assisted living residents without physicians having signed regulator-required documentation when they certified the need for home health services, or as soon thereafter as possible. Brookdale did this, she said, to address a backlog of approximately 7,000 unbilled Medicare claims worth about $35 million.
Prather also claimed that Brookdale violated the False Claims Act by keeping reimbursements that she said would not have been paid had the government been aware of the company’s actions.
One issue in the False Claims Act case is whether the regulatory requirement related to the timing of the physician certifications was relevant. The 6th Circuit Court of Appeals ruled last year that it is, because it is an “express condition of payment” and is “a mechanism of fraud prevention.” Brookdale noted in a subsequent court filing, however, that Prather did not provide any examples of cases in which the Centers for Medicare & Medicaid Services did not pay a claim because of the timing of physician certification.
Brookdale said that the appeals court ruling conflicted with a 2016 Supreme Court decision, Universal Health Servs., Inc. v. U.S. ex rel. Escobar, and the decisions of some other circuit courts and “hamstrings future Sixth Circuit panels and district courts by preventing them from considering the lack of allegations in a complaint, meaning that relators alleging minor or insubstantial regulatory violations will be able to survive motions to dismiss and force defendants to disprove materiality.”
In the petition filed in November, Brookdale said it sought the Supreme Court’s review of the case in part “to provide government contractors with certainty regarding their potential FCA liability for submitting claims for payment that do not involve any affirmative misrepresentation by the contractor.”
In its brief in support of Brookdale’s request, AHCA / NCAL said the issue has “important and far-ranging consequences” for members, many of which receive funding from the federal government and over which “the threat of opportunistic qui tam suits looms.”
Supreme Court review of the case was needed, AHCA / NCAL said in the brief, to “clarify and reinforce what it said in Escobar and prevent the likely migration of FCA suits to the Sixth Circuit, hoping to take advantage of the lax scrutiny of FCA pleadings Prather calls for.”
Tuesday, a spokesperson for the organization told McKnight’s Senior Living: “Obviously, we would have liked to see the Supreme Court consider this case, which is why we filed the amicus brief. This case presented important legal questions regarding the False Claims Act, and we felt it was imperative to weigh in on behalf of our members. We’ll continue to monitor this issue’s broader impact on the profession moving forward.”