Court revives $35 million False Claims Act lawsuit against Brookdale

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Court revives $35 million False Claims Act lawsuit against Brookdale
Court revives $35 million False Claims Act lawsuit against Brookdale

The 6th Circuit Court of Appeals on Monday reversed a federal court's dismissal of a “whistleblower” lawsuit brought by a former Brookdale Senior Living employee who accused the company and subsidiaries of submitting approximately $35 million in fraudulent Medicare claims for reimbursement.

A spokeswoman for Brentwood, TN-based Brookdale told McKnight's Senior Living that the company had no comment.

Plaintiff Marjorie Prather, a registered nurse who worked as a utilization review nurse at the country's largest senior living operator from September 2011 to November 2012, filed her original lawsuit in July 2012. She alleged that in late 2011, Brookdale began submitting 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 would not have been paid had the government been aware of its actions.

The case bounced around the court system until June 2017, when the U.S. District Court for the Middle District of Tennessee in Nashville ruled that a submitting a claim to Medicare before a physician signs documentation certifying the need for home healthcare or the face-to-face encounter is not fraud because the documentation is not material to the government's decision to pay a claim. Prather, the court said, could not provide an example of a time when Medicare denied a claim for which a doctor's signature was obtained after the claim was submitted for reimbursement.

Her appeal was heard by a three-judge panel.

“Prather has sufficiently pleaded that the defendants misrepresented their compliance with the material timing requirement in 42 C.F.R. § 424.22(a)(2) [federal requirements for home health services], and that they acted with ‘reckless disregard' as to whether they had complied with this requirement and whether this requirement was material,” said Judge Karen Nelson Moore, writing the court's opinion, which Judge Bernice B. Donald joined.

The appeals court sent the case back to the district court “for proceedings consistent with this opinion.”

Judge David W. McKeague dissented but said he was not endorsing Brookdale's actions.

“Medicare providers can and should be much more careful and meticulous with their recordkeeping,” he wrote. “But accusing someone of fraud is a serious thing, and I simply am not convinced that Prather has alleged anything more than sloppy management and negligence.”

Read about the case's history under “Related Articles,” below.

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