United States Ex Rel. Prather v. Brookdale Senior Living Communities, Inc.
838 F.3d 750
| 6th Cir. | 2016Background
- Relator Marjorie Prather, a registered nurse, was hired by Brookdale to review thousands of Medicare-related patient charts in a centralized "Held Claims Project" after Brookdale accumulated a backlog of RAPs (requests for anticipated payment) and final home-health claims.
- Prather alleged many files lacked contemporaneous physician certifications (that the patient needed home-health services, a plan of care was established, and a required face-to-face encounter occurred) and that those certifications were often signed months after care ended.
- Brookdale allegedly pressured reviewers to perform only "quick reviews," instructed them to ignore certain problems, and began paying physicians to complete paperwork retroactively.
- Prather sued under the False Claims Act (FCA) alleging: (1) presentation of false claims, 31 U.S.C. § 3729(a)(1)(A); (2) use of false records, § 3729(a)(1)(B); and (3) unlawful retention of overpayments (reverse false claim), § 3729(a)(1)(G). The United States declined to intervene.
- The district court dismissed all FCA claims for failure to plead falsity and presentment with Rule 9(b) particularity; the Sixth Circuit reversed in part and affirmed in part.
Issues
| Issue | Plaintiff's Argument (Prather) | Defendant's Argument (Brookdale) | Held |
|---|---|---|---|
| Legal falsity of claims based on late physician certifications | Certifications signed months after care rendered are not "as soon thereafter as possible" and thus render claims impliedly false | The certification requirement is satisfied so long as certification exists before final billing (up to one year); late signatures do not make claims false | Court holds the timing phrase requires review of length/reasons for delay; months-long, backlog-driven delays as alleged can make claims legally false (reversed dismissal on falsity) |
| Presentment of RAPs (requests for anticipated payment) — pleading requirement | Prather alleges she reviewed identified patient files and that RAPs were submitted for those patients; her role and exhibits support a strong inference that RAPs were presented | Prather failed to plead specific presentment details (billing date, method, amount, payment) as required by Rule 9(b) | Court adopts/clarifies limited exception: where relator pleads detailed scheme plus personal billing-related knowledge and identifies representative claims, Rule 9(b) may be relaxed; here facts support strong inference of presentment (reversed dismissal as to RAPs) |
| Use of false records (certified forms / diagnoses) | Forms (e.g., CMS-485) that use forward-looking language were used to certify care retroactively and thus are false records | Relator has not pleaded with particularity that physicians lied on forms or that diagnoses/treatments were misrepresented | Court affirms dismissal of false-records claim for failure to plead particular false statements and that physicians knowingly lied on submitted forms |
| Reverse false claim / unlawful retention of overpayments | Retention of RAP payments to which defendants were not entitled (because underlying certifications were invalid) creates reverse-FCA liability | Dismissal argued because Prather failed to plead presentment of RAPs and/or falsity of RAPs | Because court revived presentment and falsity holdings for RAPs, it also reverses dismissal of reverse-false-claim count |
Key Cases Cited
- Universal Health Servs., Inc. v. United States, 136 S. Ct. 1989 (2016) (recognized implied-false-certification theory and emphasized materiality requirement)
- Chesbrough v. VPA, P.C., 655 F.3d 461 (6th Cir. 2011) (Rule 9(b) particularity in FCA cases; scheme-plus-representative-claims framework)
- Bledsoe v. Community Health Sys., Inc., 501 F.3d 493 (6th Cir. 2007) (discussing pleading requirements and possibility of relaxed particularity where relator has billing knowledge)
- SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496 (6th Cir. 2008) (pleading standard and construing FCA complaints in relator’s favor)
- Marlar v. BWXT Y-12, LLC, 525 F.3d 439 (6th Cir. 2008) (presentment element requires identification of a submitted claim)
- Clausen v. Laboratory Corp. of America, 290 F.3d 1301 (11th Cir. 2002) (clarifying Rule 9(b) proof-versus-pleading standards in FCA cases)
- D.D. ex rel. V.D. v. New York City Bd. of Educ., 465 F.3d 503 (2d Cir. 2006) (interpreting "as soon as possible" to require inquiry into length/reasons for delay; persuasive analog for timing-language interpretation)