United States Ex Rel. Sanchez-Smith v. AHS Tulsa Regional Medical Center, LLC
754 F. Supp. 2d 1270
N.D. Okla.2010Background
- Relators allege TRMC submitted Medicaid claims for psychiatric services in the Unit that violated Oklahoma active treatment regulations (2003–2005).
- OHCA/OFMQ conducted inspections and penalties for deficiencies; 2003 and 2005 audits revealed numerous per diem penalties and recoupments.
- Relators billed per diem for bundled services; evidence shows drive-by therapy and documentation practices.
- TRMC argued active treatment regulations are only conditions of participation; the court found them not merely participation conditions and potentially material to payment.
- Court denied summary judgment, allowing trial on implied false certification theory; factual falsity theory rejected unless showing “worthless” or grossly negligent care.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there factual falsity or implied false certification? | Sanchez-Smith argues TRMC billed for inadequate care. | TRMC contends factual falsity or implied certification not proven. | Implied false certification theory viable; factual falsity theory rejected. |
| Are active treatment requirements conditions of payment or participation? | Relators contend these requirements condition payment. | TRMC argues they are participation conditions. | Active treatment requirements are not mere participation conditions; may be material to payment. |
| Is there sufficient knowledge to prove implied false certification? | Relators show units’ drive-by sessions and policies indicating knowledge of noncompliance. | TRMC argues lack of knowledge or intent. | Evidence creates a jury question on knowledge. |
| Is materiality satisfied for implied false certification? | Audits showed deficiencies and refunds; regulations tied to payments. | Materiality uncertain; administrative remedies exist. | Materiality presents a jury question; not per se defeated. |
Key Cases Cited
- United States ex rel. Conner v. Salina Regional Health Center, 543 F.3d 1211 (10th Cir. 2008) (materiality and implied false certification framework; conditions of payment vs participation)
- United States ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163 (10th Cir. 2010) (materiality standard; implied false certification analysis)
- United States v. NHC Health Care Corp., 163 F. Supp. 2d 1051 (W.D. Mo. 2001) (discussed as a benchmark for factual falsity in per diem billing; (note: no official reporter included))
- Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001) (illustrates “worthless services”/gross negligence approach in quality-of-care context)