A federal court has breathed new life into a $35 million whistleblower lawsuit filed against Brookdale Senior Living (NYSE: BKD), the largest senior living provider in the United States and a major home health player.
The 6th Circuit Court of Appeals on Monday reversed a federal court’s dismissal last year of a False Claims Act lawsuit brought forth by former Brookdale employee Marjorie Prather, hired to review documentation related to the Brentwood, Tennessee-based company’s home health care clients. In a lawsuit filed in 2012, Prather accused Brookdale and subsidiaries of defrauding Medicare by tens of millions of dollars by billing for home health services without obtaining required face-to-face documentation and physician signatures. The company did so to process a backlog of about 7,000 unbilled Medicare claims worth about $35 million, Prather alleged.
The case, which also accused Brookdale senior executives of pressuring employees to expedite billing and ignore compliance issues, was initially dismissed in 2015 due to lack of evidence, revived for the first time in 2016 and then dismissed for a second time in 2017. The most recent reversal this week means the company must—yet again—face the persistent lawsuit.
“Prather has sufficiently pleaded that the defendants misrepresented their compliance with the material timing requirement in 42 C.F.R. § 424.22(a)(2), and that they acted with ‘reckless disregard’ as to whether they had complied with this requirement and whether this requirement was material,” wrote Judge Karen Nelson Moore in the court’s opinion, supported by Judge Bernice Bouie Donald.
A Brookdale spokesperson told Home Health Care News that the company does not comment on pending litigation.
In the past, Brookdale has argued that as long as it obtained doctors’ signatures sometime before submitting final claims for payment, it should not be held liable under the False Claims Act. Getting signatures late is not the same as failing to get signatures altogether, according to the company.
The 6th Circuit Court of Appeals opinion was not unanimous.
“For the second time, this panel has reversed a well-reasoned decision by the district court to dismiss Prather’s complaint,” Judge David William McKeague wrote in a dissent opinion. “My dissent today should not be understood as endorsing Brookdale’s conduct. Medicare providers can and should be much more careful and meticulous with their recordkeeping. But accusing someone of fraud is a serious thing, and I simply am not convinced that Prather has alleged anything more than sloppy management and negligence.”
The case is now headed back to district court.
Written by Robert Holly