United States ex rel. Prather v. Brookdale Senior Living Cmtys., Inc., 15–6377

Citation838 F.3d 750
Decision Date30 September 2016
Docket NumberNo. 15–6377,15–6377
Parties United States of America ex rel. Marjorie Prather, Relator–Appellant, v. Brookdale Senior Living Communities, Inc. et al., Defendants–Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

838 F.3d 750

United States of America ex rel. Marjorie Prather, Relator–Appellant,
Brookdale Senior Living Communities, Inc. et al., Defendants–Appellees.

No. 15–6377

United States Court of Appeals, Sixth Circuit.

Argued: August 4, 2016
Decided and Filed: September 30, 2016

ARGUED: Pat Barrett, Barrett Law Office, PLLC, Nashville, Tennessee, for Appellant. Brian D. Roark, Bass, Berry & Sims, PLC, Nashville, Tennessee, for Appellees. ON BRIEF: Pat Barrett, Barrett Law Office, PLLC, Nashville, Tennessee, Michael Hamilton, Provost Umphrey Law Firm, LLP, Nashville, Tennessee, for Appellant. Brian D. Roark, J. Taylor Chenery, Angela L. Bergman, Bass, Berry & Sims, PLC, Nashville, Tennessee, for Appellees.

Before: MOORE, McKEAGUE, and DONALD, Circuit Judges.

MOORE, J., delivered the opinion of the court in which DONALD, J., joined, and McKEAGUE, J., joined in part. McKEAGUE, J. (pp. 775–81), delivered a separate opinion concurring in part and dissenting in part.



Marjorie Prather was hired by Brookdale Senior Living Communities to review documentation related to thousands of patients who were residents of Brookdale facilities and had received home-health services from Brookdale. Brookdale desperately needed this documentation to be reviewed because Medicare claims regarding those patients had been on hold for some time, and Brookdale potentially faced the recoupment of payments it had previously received for treating those patients if it did not review and submit final Medicare claims regarding the treatment—what Brookdale termed “a looming financial crisis.” R. 73 (Second Amended Compl. ¶¶ 3, 86) (Page ID #925, 945). As she reviewed the documentation, Prather noticed that the required certifications from a doctor stating that the doctor had decided that the patient needed home-health services, established a plan of care, and met with the patient face-to-face, were signed well after the care had been provided. Prather repeatedly brought this issue to the attention of her supervisors, but was rebuffed, told to ignore the issues that she was seeing, and in one instance had her concerns brushed aside by an official who suggested “[w]e can just argue in our favor if we get audited.” Id. ¶ 99 (Page ID #950). The urgency was such that Brookdale even began to pay doctors to complete the necessary paperwork—even though months had passed since the treatment had been provided to the patients. Prather came to believe that Brookdale was not just asking the doctors who had cared for the patients all along to complete forgotten paperwork; rather, she surmised that Brookdale had provided the home-health services without enlisting a doctor's aid

838 F.3d 755

and then found doctors willing to validate the care after-the-fact. Prather therefore brought a lawsuit under the False Claims Act, 31 U.S.C. § 3729 et seq.

The focal point of Prather's case is a claim that Brookdale submitted false Medicare claims to the government. Prather suggests that Brookdale submitted the claims that she reviewed, and many others, knowing that those claims did not comply with Medicare regulations because they included physician certifications of the patient's need for home-health services that were completed well after the care had been provided. The governing regulation suggests that these certifications must be completed at the time the doctor establishes a plan for the patient's care “or as soon thereafter as possible,” yet Brookdale waited months to obtain such certifications from doctors. Although the district court dismissed this claim, we REVERSE because completing the physician certifications months after the fact cannot be said to have been “as soon as possible” after the plan for a patient's care was established. We also reject the argument that Prather did not sufficiently plead the submission of particular claims to the government for payment because she provided a detailed description of the alleged fraudulent scheme, and included her own personal knowledge of the review of Medicare claims for submission—reviewing Medicare claims for billing purposes was Prather's job, after all. For those same reasons, we also hold that Prather sufficiently alleged that the defendants unlawfully retained Medicare payments that they had previously received for the same patients, but to which they were not entitled due to the same regulatory violations. We therefore REVERSE the dismissal of Prather's fraudulent-retention-of-payments claim. Finally, because Prather failed to plead with particularity the use of government forms to certify falsely that care had been provided under a doctor's orders, or that unnecessary care had been provided, we AFFIRM the dismissal of her false-records claim.


A. Statutory and Regulatory Background

Medicare Part A “provides basic protection against the costs of hospital, related post-hospital, home health services, and hospice care” for qualified individuals aged 65 and over. 42 U.S.C. § 1395c. Medicare Part B is “a voluntary insurance program to provide medical insurance benefits,” 42 U.S.C. § 1395j, and it, too, provides coverage for certain “home health services,” 42 U.S.C. § 1395k(a)(2)(A). Medicare-covered home-health services include: “[s]killed nursing services,” “[h]ome health aide services,” “[p]hysical therapy,” “[s]peech-language pathology services,” “[o]ccupational therapy services,” and “[m]edical social services.” R. 86-2 (2015 Medicare Benefit Policy Manual, Chapter 7 Home Health Services § 10.1[A] ) (Page ID #1243).

A home-health agency receives its Medicare patients via referrals, and “Medicare Part A or Part B pays for home health services only if a physician certifies and recertifies” the patient's eligibility for and entitlement to those services. 42 C.F.R. § 424.22. The physician must certify that: (1) home-health services “are or were required because the individual is or was confined to his home ... and needs or needed” covered home-health services; (2) “a plan for furnishing such services to such individual has been established and is periodically reviewed by a physician”; (3) “such services are or were furnished while the individual is or was under the care of a physician”; and (4) “prior to making such certification the physician must document that the physician ... has had a face-to-

838 F.3d 756

face encounter ... with the individual during the 6-month period preceding such certification.” 42 U.S.C. § 1395n(a)(2)(A) ; see also 42 U.S.C. § 1395f(a)(2)(C) (listing nearly identical requirements under Medicare Part A). Medicare payments for home-health services are conditioned on these certifications being completed. See 42 C.F.R. § 424.10(a). These certifications provide “a forward-looking projection of medical need at the time the beneficiary's plan of care is established,” R. 66 (Gov't Statement of Interest at 3) (Page ID #860) (emphasis omitted), ensuring that a patient receives Medicare services only to the extent she needs them.

Medicare payments for home-health services are made pursuant to “a prospective payment system,” 42 U.S.C. § 1395fff(a), which uses a 60-day “episode of care” as its standard measurement. Reimbursement for services provided during each 60-day episode is paid to the home-health agency in two parts: An initial payment, commonly referred to as a “request for anticipated payment” or “RAP,” which is a percentage of the anticipated episode payment, and a “residual final payment” that is paid after the end of the 60-day episode. See 42 C.F.R. § 484.205(b) ; R. 79-1 (2011 Medicare Claims Processing Manual § 10.1.12) (Page ID #1085). Payment, therefore, is not based on a fee-for-service model that would consider the precise treatments that were provided during the 60-day episode; rather, the entire episode payment “represents payment in full for all costs associated with furnishing home health services previously paid on a reasonable cost basis.” 42 C.F.R. § 484.205(b).

B. Factual Background

Marjorie Prather “is a Registered Nurse ... who was employed by Brookdale Senior Living, Inc. as a Utilization Review Nurse from September of 2011 until November 23, 2012.” R. 73 (Second Amended Compl. ¶ 10) (Page ID #927). Brookdale Senior Living, Inc. and the other defendants (we refer to the defendants collectively as “Brookdale”)—Brookdale Senior Living Communities, Inc.; Brookdale Living Communities, Inc.; Innovative Senior Care Home Health of Nashville, LLC (“Innovative Senior Care”); and ARC Therapy Services (“ARC”)—“are interconnected corporate siblings who operate senior communities, assisted living facilities and home health care providers.” Id. ¶ 3 (Page ID #925).

The business models of the Brookdale companies are also intertwined. Many of the Brookdale “retirement communities have nursing care and other health care services ... on site for which the residents pay a ‘monthly fee,’ ” while Innovative Senior Care and ARC “maintain offices in many of these facilities” and their “staff solicit referrals from the retirement community staff members on a daily basis.” Id. ¶¶ 57–58 (Page ID #938). This connection came to include a scheme to utilize “aggressive marketing practices” by which the defendants sought to “enroll[ ] as many of their assisted living facility residents as possible in home health care services that were billed to Medicare.” Id. ¶ 3 (Page ID #925). The scheme sought not only to enroll patients who needed home-health care services, but also allegedly crossed the line into pushing Medicare-billable services onto patients who did not need them. For example, Prather alleges that Innovative Senior Care nurses would “treat skin tears that would otherwise have been provided by assisted living facility nurses,” and then bill Medicare, even though the same treatment would be provided “at no cost to Medicare” if done by nurses from the assisted-living facility. Id. ¶ 59 (Page ID #939).

838 F.3d 757

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