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.
Circuit Splits on Materiality and Scienter
In its certiorari petition, Brookdale requests that the Supreme Court review a circuit split regarding whether, in analyzing the FCA’s materiality requirement on a motion to dismiss, the relator’s or the government’s failure to plead facts relating to past government practices concerning the alleged violation can weigh against a finding of materiality. Brookdale also asks the Supreme Court to review a circuit split regarding whether the FCA’s scienter element requires the defendant to possess knowledge that the alleged violation was material to the government’s payment decision.
For further coverage of Brookdale’s certiorari petition, please access the Law360 article titled “Epic Escobar Split Needs High Court Help.”
For more information regarding the FCA’s materiality and scienter requirements, please contact a member of the Bass, Berry & Sims Healthcare Fraud Task Force and subscribe to updates from this blog.
Bass, Berry & Sims PLC represents Petitioners Brookdale Senior Living Communities, Inc. et al. in this case.