Brookdale Asks Court to Again Reject Charges in $35 Million Fraud Case

Brookdale Senior Living (NYSE: BKD) has asked the U.S. Court of Appeals for the Sixth Circuit to uphold a November 2015 decision rejecting a nurse’s False Claims Act lawsuit against the company for home health billing practices.

The suit, brought by nurse Marjorie Prather, alleged that Brookdale engaged in fraudulent Medicare billing for home health services. The allegations originated from Brookdale’s treatment of a backlog of 7,000 Medicare claims worth approximately $35 million, according to Prather’s appeal, dated Feb. 10, 2016.

Brookdale senior executives pressured Prather and other employees to expedite the process of releasing the claims for billing to Medicare, and instructed them to ignore compliance issues that slowed down the process, Prather alleges. Brookdale also offered bonuses to employees based on the number of claims cleared, and paid doctors for their time spent signing and reviewing documents, Prather claims.

The nation’s largest senior housing owner/operator, which also is one of the largest home health companies, engaged in “aggressive solicitation of their senior community and assisted living facility residents” to enroll as many seniors as possible into home health care and therapy services run by Brookdale’s corporate siblings, then went back and found doctors to prescribe the services, Prather said.

“Essentially, instead of delivering services to patients as ordered by physicians, Defendants provided services to patients and then found physicians willing to retroactively prescribe the services already rendered,” Prather’s most recent appeal states.

Meanwhile, Brookdale has been attempting to “trivialize” Prather’s claims by making the case about “technical requirements,” such as the doctors’ signatures, the appeal says.

If the case was actually about missing signatures, it would be a stronger case for Prather, Brookdale said in its own brief on March 14.

“But Prather does not allege that Defendants submitted a single claim to the government for which they did not ultimately obtain a physician’s signature,” the brief from Brookdale states. “Thus, there are no ‘missing signatures’ in this case—only allegedly late signatures.”

As long as Brookdale obtained doctors’ signatures before submitting final claims for payment, the timeliness of those signatures does not render the claims false under the False Claims Act, Brookdale maintains.

Prather’s lawsuit was originally filed under seal in 2012 when she was a Brookdale employee. In 2014, after requesting multiple extensions, the federal government declined to join the suit and it was unsealed.

U.S. District Judge Aleta A. Trauger dismissed the case without prejudice in March 2015. Prather refiled the suit, dropping claims for services that were medically unnecessary and adding a new theory of liability associated with billing practices, Brookdale’s summary of the case history states.

Last November, Judge Trauger ruled that Prather failed to procure any specific cases of fraud.

Written by Mary Kate Nelson