Brookdale asks court to reconsider False Claims Act ruling, and two 'friends' file briefs in support

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Brookdale asks court to reconsider False Claims Act ruling, and two 'friends' file briefs in support
Brookdale asks court to reconsider False Claims Act ruling, and two 'friends' file briefs in support

Brookdale Senior Living is asking the full 6th Circuit Court of Appeals to review a June 11 ruling by a three-judge panel of the court that revived a False Claims Act case against the company that originated in 2012. Two organizations filed “friend-of-the-court” legal briefs supporting that request this week.

As McKnight's Senior Living previously reported, plaintiff Marjorie Prather, a registered nurse who worked as a utilization review nurse at Brookdale from September 2011 to November 2012, filed her original lawsuit in July 2012. She alleged that in late 2011, Brookdale 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, established a plan of care or met with residents in person, 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.

At issue now is whether the regulatory requirement related to the timing of the physician certifications is relevant in the False Claims Act case. The court's three-judge panel in June, in a 2-1 decision, said it is because it is an “express condition of payment” and is “a mechanism of fraud prevention.” Brookdale, however, in a June 26 filing with the court, noted 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.

“Prather does not allege that Brookdale ever billed Medicare without first obtaining signed certifications, that it forged or backdated physicians' signatures, or that any physician lied when certifying patients' eligibility for care. Rather, the sole basis for FCA liability is the timing of the signature on the certification,” Brookdale said. “Although the regulation has existed for more than 50 years, Prather does not allege whether compliance with the regulation has ever led to the denial of a home health claim for any provider or otherwise affected the government's payment of home health claims.”

Brookdale said that the panel's June 11 decision conflicts with a 2016 Supreme Court decision, Universal Health Servs., Inc. v. U.S. ex rel. Escobar, and the decisions of 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.”

The National Association for Home Care and Hospice and the Washington Legal Foundation on Monday filed amicus briefs also requesting an “en banc” rehearing.

“Consistent Medicare and industry practice has been to consider the certification timeliness requirement to be tied to the date of the billing,” NAHC wrote in its brief. “So long as the certification was obtained by that date, home health agencies considered their actions to be compliant. CMS never stated otherwise in its policies or its audits of claims.”

If the appellate court panel's ruling stands, the association said, more than 6.6 million Medicare claims for home health services provided to more than 3.4 million beneficiaries by more than 12,000 Medicare-participating home health agencies annually could be affected.

The Washington Legal Foundation said its brief “offers further support for the conclusion that, absent additional allegations from Prather, it is not plausible to assume that compliance with the timing requirement was material to the government's decision to pay Brookdale's claims.”

The June ruling by the appellate court reversed a federal court's 2017 dismissal of the case, which is now six years old. Prather originally brought her lawsuit and an amended complaint in 2012 and it was dismissed in 2015. She filed a second amended complaint, and it was dismissed, in 2015. Prather appealed the dismissal to the 6th Circuit Court of Appeals in 2016, and the court reversed the dismissal of two of the counts but not a third. Prather filed her third amended complaint in 2017, and it was dismissed later that year before the appeals court panel reversed that decision in June.

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