Sixth Circuit: Technical Physician Signature Deficiencies not “Material” to Reimbursement Claims | Jones Day

In Short

The Decision: The United States District Court for the Middle District of Tennessee held that the timing requirements under 42 C.F.R. § 424.22(a)(2) for a physician’s certification of the necessity of home health services were not “material” to Medicare’s reimbursement decision, and thus the defendants’ alleged misrepresentations regarding compliance with the certification-timing requirement were not actionable under the False Claims Act.

The Reasoning: The court found that although the certification-timing requirement was a “condition of payment,” the relator failed to identify any examples of Medicare actually denying payment based on a violation of the certification-timing requirement, and that the certification-timing requirement did not go to the “essence of the bargain” between Medicare and the provider.

The Implications: In evaluating technical violations, such as the certification-timing requirement in Brookdale Senior Living, the historical actions of government payors is perhaps the most significant Escobar factor in determining materiality for purposes of FCA liability.

The District Court for the Middle District of Tennessee held on June 22, 2017, that the timing requirements related to a physician’s certification of need for home health services were not “material” to the Centers for Medicare and Medicaid Service’s (“CMS”) decision to reimburse claims and, therefore, a company’s alleged misrepresentations related to the certification-timing requirement were not actionable under the False Claims Act (“FCA”).

Background

In 2012, the relator, Marjorie Prather, who served as a utilization review nurse at one of the defendants’ companies from September 2011 until November 2012, filed a qui tam FCA complaint against the defendants, Brookdale Senior Living, Inc., Brookdale Living Communities, Inc., and Innovative Senior Home Health of Nashville, LLC d/b/a/ Innovative Senior Care Home Health (together, “defendants”), providers of…

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