US Supreme Court Wont’ Hear Post-Escobar FCA Materiality Case

The US Supreme Court allowed a False Claims Act case to continue when it declined, according to a Law 360 article, to consider an appeal of the Sixth Circuit decision. That decision allowed the claim of a relator against the Brookwood Senior Living Communities Inc. to continue. The relator claimed that the company “retroactively” issued certifications by physicians that Medicare claims for its residents were medically necessary – in violation of Medicare regulations.

The nursing home, based in Brentwood Tennessee, had requested that the Supreme Court resolve a split among lower courts regarding the meaning of “materiality” in False Claims Act cases. The split follows the decision in the Supreme Court’s 2016 Escobar decision.  The Escobar case ruled that False Claims Acts violations “must be material to the government’s decision to reimburse” the claim for payment.

What is materiality?

Some of the factors discussed by lower courts in deciding “materiality” include:

  • Is the government continuing to pay others in similar situations
  • Can continued payments alone show there isn’t materiality or is some additional evidence/factor required?
  • Does the violation go to “”the essence of the bargain” between the government and payee.”

The Sixth Circuit, in 2018, found that the relator had made a sound argument that the timing/dating of the certifications was material to whether the nursing home could claim Medicare reimbursement payments. The relator, a former utilization review nurse for the nursing home, claimed that the nursing home should have certified the necessity requirement when the patient’s care plan was created – not months afterwards. The relator claimed that the nursing home was trying to get as many residents as possible – without regard to medical necessity.

The Sixth-Circuit Court opinion was not unanimous.

Contact our experienced whistleblower and FCA lawyers today

At the law office of Stephen Danz & Associates, we have been fighting for relators for three decades. We work to help relators make timely disclosures, help guide them through the DOJ intervention decision process, and advocate for them during the litigation process against the wrongdoers. We demand payment for their just percentage of any recovery. To learn if you have a valid whistleblower claim, call us at (877)789-9707 to make an appointment. Se habla espanol.