On Tuesday, November 20, 2018, Defendants-Petitioners Brookdale Senior Living Communities, Inc. et al. (Brookdale) filed a petition for a writ of certiorari with the U.S. Supreme Court asking the Court to resolve circuit splits regarding enforcement of the materiality and scienter elements of the False Claims Act (FCA) in cases involving the implied false certification theory of liability. The relator in the case, styled Brookdale Senior Living Communities, Inc. v. U.S. ex rel. Prather, is a former Brookdale utilization review nurse who alleges that Brookdale did not obtain physician signatures on home health certifications as soon as possible after the physician established a plan of care, in violation of Medicare regulations. The U.S. District Court for the Middle District of Tennessee previously dismissed the lawsuit for failure to plead falsity, but the case was revived on appeal by a divided panel of the Court of Appeals for the Sixth Circuit, which held that the relator adequately pleaded a regulatory violation. After the relator amended her complaint in light of the Supreme Court’s 2016 decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar, which addressed the FCA’s materiality requirement, the district court dismissed the case for failure to plead materiality. On appeal, however, the Sixth Circuit again reversed in a 2-1 decision, finding that the relator adequately pleaded materiality and scienter. Continue Reading Supreme Court Review Sought on FCA Materiality, Scienter Elements

Bass, Berry & Sims and the Tennessee Hospital Association recently sponsored the Nashville Healthcare Fraud Conference, a full-day seminar offering insight into fraud and abuse enforcement issues within the healthcare industry. Panel discussions were focused on providing practical tips and takeaways for preparing for, responding to and resolving a healthcare fraud investigation. A variety of topics were covered including:

  • Healthcare Fraud Year in Review: Where Do We Go From Here?
  • Effectively Handling Employment Decisions Involving Whistleblowers
  • What Every Compliance Officer Wishes the Legal Department Knew
  • Mine Your Own Data: The Role of Data in Dealing with Healthcare Fraud Issues
  • Revisiting Parallel Proceedings in Healthcare Fraud Cases
  • Keynote Presentation: A View from the U.S. Attorneys
  • Data Privacy Concerns and the Rising Occurrence of Audits
  • Addressing Fraud & Abuse Issues in Healthcare Transactions
  • In-House Counsel Perspective
  • Getting Your Healthcare Fraud Case Resolved – An Interactive Case Study

Keynote remarks were offered by the U.S. Attorneys for the Middle, Eastern and Western Districts of Tennessee. The 2017 Nashville HCF Conference Brochure and the HCF Seminar 2017_Final PowerPoint are both available online.

On August 18, 2017, the U.S. Court of Appeals for the Sixth Circuit reversed the denial of a FCA defendant’s request for attorney’s fees and expenses under the Equal Access to Justice Act (EAJA) and held the government accountable for an unreasonable damages demand.

Background

In U.S. ex. rel. Wall v. Circle C Construction, LLC, a subcontractor for the defendant, Circle C Construction, failed to pay $9,900 in wages for electrical work performed in the construction of warehouses. The subcontractor’s paid wages thus failed to meet the requirements of the Davis-Bacon Act. As a result, Circle C Construction’s subsequent statements of compliance with federal regulations, including the Davis-Bacon Act, were false.

Continue Reading Sixth Circuit Reverses Denial of Attorney’s Fees and Expenses, Maintains Cost Recovery for Unreasonable Government Demands

Bass, Berry & Sims and the Tennessee Hospital Association recently sponsored the Nashville Healthcare Fraud Conference, a day-long CLE program designed to provide insight into the most significant fraud and abuse issues facing the healthcare industry. Panel discussions were focused on providing practical tips and takeaways for preparing for, responding to and resolving a healthcare fraud investigation. A variety of topics were covered including:

  • Year in Review: Looking Back on Healthcare Fraud Issues in 2016 (or Everything You Wanted To Know about Escobar in 50 Minutes)
  • Developments Regarding Whistleblowers
  • Quick Hits – Session 1: Yates One Year Later
  • Quick Hits – Session 2: Effective Use of Your Own Data – Mining Your Own Data for Compliance
  • Quick Hits – Session 3: Mitigating Business Partner Risks in Healthcare
  • View From the U.S. Attorneys
  • Quick Hits – Session 4: Physician Compensation
  • Role of Legal and Compliance in an Era of Heightened Enforcement
  • Anatomy of a Data Breach – An Interactive Case Study
  • Ethics of a Healthcare Fraud Investigation

Keynote remarks were offered by the U.S. Attorneys for the Middle, Eastern and Western Districts of Tennessee, who offered practical tips to healthcare providers navigating an increasingly challenging enforcement environment.

The Nashville Healthcare Fraud Conference Brochure and the 2016 Nashville Healthcare Fraud Conference Presentation are both available online.

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we will take a closer look at recent legal developments involving the FCA. This week, we examine recent court decisions requiring relators to plead actual claims to satisfy the requirements of Rule 9(b) in order to avoid dismissal.

In the past, the First Circuit has shifted between requiring the identification of a specific false claim and applying a more flexible standard. Compare U.S. ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 232 (1st Cir. 2004) (applying strict standard) abrogated on other grounds, Allison Engine Co. v. U.S. ex rel. Sanders, 553 U.S. 662 (2008), with U.S. ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13, 29 (1st Cir. 2009) (applying flexible standard). Last year, the First Circuit explained its approach as requiring “relators to connect allegations of fraud to particular false claims for payment, rather than a fraudulent scheme in the abstract.”

Continue Reading FCA Deeper Dive: Rule 9(b) and the Pleading of Actual Claims

Earlier this month, the U.S. District Court for the Middle District of Tennessee dismissed a relator’s qui tam lawsuit, finding that the relator had failed to adequately allege the presentment of false claims to the government. In U.S. ex rel. Prather v. Brookdale Senior Living, Inc., the relator alleged that Brookdale submitted false claims for home health services that did not meet the technical requirements for billing under Medicare rules and regulations. Defendants argued that the allegations failed to include sufficient detail regarding the actual submission of requests for anticipated payment (RAP) claims and that the relator failed to plead the requisite legal falsity of both RAP and final episode payment claims.

Continue Reading Middle District of Tennessee Clarifies Pleading Standards for the Presentment of False Claims