Health Law Daily Personal care services reimbursement not found fraudulent
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Friday, April 24, 2020

Personal care services reimbursement not found fraudulent

By Elena Eyber, J.D.

False Claims Act claims failed against operators of adult care homes providing personal care services because relator properly plead whether operators submitted materially false claims.

A federal district court in North Carolina denied a relator’s motion for summary judgment and granted motion for summary judgment to operators of adult care homes that provided personal care services (PCS) to residents. Relator brought this action under the False Claims Act (FCA) (31 U.S.C. §3729 et seq.) and the North Carolina False Claims Act (NCFCA) to recover damages on behalf of the United States and the State of North Carolina for submissions of and reimbursements for false claims to North Carolina’s Medicaid Program for the provision of PCS. The court held that relator failed to create genuine issue of material fact under either federal or state law. The billing practices of the operators of adult care homes comported with North Carolina Medicaid’s own interpretation of a policy as it applied to adult care homes. The court further held that even if the operators’ PCS billing practices were improper, the operators’ reliance on the official guidance of North Carolina Medicaid negated any scienter required for FCA claims (U.S. ex rel Gugenheim v. Meridian Senior Living, LLC, April 21, 2020, Boyle, T.).

FCA claims. To prevail on the FCA claims, relator must demonstrate that the operators made a false statement or engaged in a fraudulent course of conduct; that the statement or conduct was made or conducted with the requisite scienter; that the statement or conduct was material; and that the statement or conduct caused the government to pay money or forfeit money due and owing. At the summary judgment stage, the relator must adduce evidence on each element of the FCA claims that would be sufficient, if believed, to satisfy the burden of proof at trial. The court held that relator had not proffered evidence which, if believed, would show that the bills submitted by the operators to North Carolina Medicaid for PCS reimbursement were materially false or made with the requisite scienter.

False statement. Relator claimed that the operators could not have provided all of the PCS that they billed for because the PCS hours billed were greater than the staff labor hours at their facilities. The evidence submitted by the operators demonstrated that North Carolina Medicaid officials and North Carolina Medicaid sanctioned guidance to adult care homes expressly did not require adult care homes to track the time spent delivering PCS to their residents. Thus, the payment for PCS services in the adult care home setting was based on the completion of the service, not on the time spent performing the service. North Carolina Medicaid guidance explained that PCS services provided in adult care home care settings were billed at the completion of the task, which could take all or a fraction of the time authorized for that particular activity of daily living.

Materially false statement. The billing request forms also did not require adult care homes to show the time spent providing PCS to be reimbursed. Because requests for PCS reimbursement did not require a provider to demonstrate the time spent providing PCS, it followed that the actual amount of time spent providing PCS was immaterial to the request for reimbursement for PCS services. What was material in the adult care home setting was that the PCS was completed.

Scienter. The court held that relator also failed to create a genuine issue of material fact as to scienter. Relator failed to provide evidence that the operators had actual knowledge that the claims they were submitting for reimbursement were false. Rather, relator argued that the operators acted with deliberate indifference or reckless disregard of the falsity of the information submitted to Medicaid. The court found that the government’s knowledge of the facts underlying an allegedly false record or statement can negate the scienter required for an FCA claim. In this case, North Carolina Medicaid officials and official guidance consistently told adult care home providers that they should bill Medicaid for PCS reimbursement based upon the completion of the task, not based on the amount of time it took to complete the task. North Carolina Medicaid had knowledge that defendants were not tracking the amount of time spent providing PCS as their own official guidance instructed adult care home providers not to do so. The court held that relator failed to provide evidence which would create a genuine issue of material fact that the operators acted with reckless disregard of the falsity of the information they provided to Medicaid when seeking reimbursement for PCS.

The case is No. 5:16-CV-410-BO.

Attorneys: Jeffrey Todd Embry (Hossley & Embry, L.L.P.) for Henry Zoch, II. Jim W. Phillips, Jr. (Brooks Pierce Mclendon Humphrey & Leonard, L.L.P.) for Meridian Senior Living, LLC and Meridian Senior Living Services, LLC.

Companies: Meridian Senior Living, LLC; Meridian Senior Living Services, LLC

MainStory: TopStory CMSNews FCANews FraudNews MedicaidNews MedicaidPaymentNews ProgramIntegrityNews QuiTamNews NorthCarolinaNews

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