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From Health Law Daily, November 9, 2015

Nurse won’t get another shot at FCA allegations

By Bryant Storm, J.D.

A district court dismissed with prejudice false claims allegations brought by a Utilization Review Nurse (URN) who alleged that a group of Medicare providers submitted false claims to the government in violation of the (FCA) (31 U.S. C. § 3729). The court held that the nurse failed to adequately plead violations of the FCA or the presentment of the allegedly false claims to Medicare. Because the nurse made the same repeated failures to cure the legal defects in her allegations, the court dismissed the claims with prejudice (U.S. ex rel. Prather v. Brookdale Senior Living Communities, Inc., November 5, 2015, Trauger, A.).

First complaint. The URN filed an FCA action alleging that a number of Medicare providers operated by Brookdale Senior Living, Inc. (BLSI), Brookdale Senior Living Communities, Inc., and Brookdale Living Communities, Inc. (Brookdale Communities) violated the FCA by submitting claims for Medicare Part A reimbursement that were not compliant with Medicare regulations. The U.S. declined to intervene in the action. The district court dismissed the nurse’s first complaint on the grounds that the nurse failed to sufficiently plead the existence of any false claims that were actually submitted to the government (see Evidence of actual claim submission is evidently crucial for utilization review case, April 3, 2015).

False claims. In the nurse’s second amended complaint, new allegations were raised that Senior Home Health of Nashville, LLC d/b/a Innovative Senior Care Home Health (ISC Home) and ARC Therapy Services, LLC d/b/a Innovative Senior Care (ARC/ISC)—home health providers—used offices within BLSI and the Brookdale Communities to refer resident patients for home health services that could be used to bill Medicare. Additionally, the second amended complaint alleged that ISC Home and ARC/ISC relied on a “70/30 business model” that promoted over-utilization of services billed to Medicare. The business model was allegedly based upon the theory that “thirty percent of seniors’ needs are obvious while seventy percent must be uncovered through continual screening and assessment.”

Held Claims Project. The complaint asserted that aggressive marketing and solicitation policies lead to a backlog of home health claims that contained primary diagnoses “that were inconsistent with the care actually provided to the patient” or were not provided under a properly documented plan of care. The complaint also alleged the existence of several claims with incomplete face-to-face encounter documentation. To facilitate billing for the problematic claims, the providers implemented the “Held Claims Project,” to help resolve the backlog.

Medicare billing. From September of 2011 through November 23, 2012, the nurse was employed as a URN to work on the Held Claims Project and her employment was terminated when the project ended. The unbilled Medicare claims were 7000 in number and were valued at $35 million. The URN was tasked with rectifying documentation and compliance issues so that the claims could be billed. In response to a request from superiors, the URNs working on the backlog were instructed “to ignore any compliance issues regarding the substantive information in the records.”

Insufficient review. URNs were told to look for missing signatures and dates but were specifically instructed not to look for problems related to Medicare Billing. Additionally, “when the URNs noted problems, they were told to ignore them.” The URN made repeated attempts to tell superiors that claims were being insufficiently reviewed and her concerns were dismissed in favor of efficiency in the billing process. The complaint alleged that BLSI pressured employees to speed up claim processing by providing monetary bonuses for employees that submitted higher numbers of claims in a week.

Examples. As evidence of the fraudulent claim submissions, the second amended complaint provided four example patients. The claims for the four patients lacked documentation related to the plan of care, medical necessity, and evidence of a face-to-face encounter. The complaint also identified, in two exhibits, 489 claims that lacked documentation of the certification of a patient’s need for home health services and 771 claims that were allegedly submitted without face-to-face encounter documentation.

Motion to dismiss. The defendant providers moved to dismiss the second amended complaint entirely, on the grounds that the complaint was not plead with sufficient particularity for fraud purposes. The providers alleged that the URN did not plead with particularity the presentment of the requests for anticipated payment (RAPs) which allegedly were false claims. Specifically, the providers asserted that complaint lacked specific details regarding “the claim, the form or method used to submit the claim, who submitted or authorized the RAP, the date of submission of the RAP, the actual amount billed, or any amount paid.” The motion to dismiss charged the URN with making the same sort of generalized accusations of wrongdoing that caused the earlier complaint to be dismissed.

Presentment. The court reasoned that because an FCA violation requires the submission of the claim itself, it was not enough to allege the underlying fraudulent conduct with particularity. The court reasoned that FCA pleading required the URN to “allege the presentation of false claims for payment to the government with the same particularity.” The court held that the complaint exhibits, which allegedly showed hundreds of documentation errors, identified the individuals for whom the allegedly false claims were submitted but that it lacked particular allegations regarding the actual presentation of the claims. Specifically, the court noted that the URN failed to provide: (1) the basis of any patient’s RAP, (2) the billing date of any patient’s RAP, (3) the form or method used to submit any RAP, (4) corporate authorization for any RAP, (5) the amount billed in any RAP, or (6) any amount paid to the providers by Medicare in response to an RAP.

Pleading. While noting that the complaint contained more detail regarding the four example patients, the court held that the added information was still insufficient to meet the particularity standard in an FCA action. The court held that it was not enough to show presentation of the claims through “reasonable inferences.” Additionally, while the court reasoned that some of the URN’s other allegations, those regarding final episode payment claims, were sufficiently plead with respect to presentment, the court explained that the complaint failed to sufficiently plead a violation of Medicare regulations. The court held that the URN did not point to “an express certification made by the defendants that they were in compliance with the Medicare rules at issue” or any Medicare law or regulation that the providers actually violated. Because the URN repeatedly failed to plead her claims sufficiently, the court determined that the legal insufficiency was unlikely to be cured by a third filing and dismissed the claims with prejudice.

The case is No. 3:12-CV-00764.

Attorneys: Mark H. Wildasin, Office of the U.S. Attorney, for United States of America. Patrick M. Barrett, III (Barrett Law Office PLLC) for Marjorie Prather. Angela Lee Bergman (Bass, Berry & Sims) for Brookdale Senior Living Communities, Inc., Brookdale Living Communities, Inc., Brookdale Senior Living, Inc., Innovative Senior Care Home Health of Nashville, LLC dba Innovative Senior Care Home Health and ARC Therapy Services, LLC dba Innovative Senior Care.

Companies: Brookdale Senior Living Communities, Inc.; Brookdale Living Communities, Inc.; Brookdale Senior Living, Inc.; Innovative Senior Care Home Health of Nashville, LLC dba Innovative Senior Care Home Health; ARC Therapy Services, LLC dba Innovative Senior Care.

MainStory: TopStory CaseDecisions FCANews QuiTamNews BillingNews PartANews FraudNews HomeNews SNFNews TennesseeNews

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