Brookdale Petitions Supreme Court to Review $35 Million Whistleblower Lawsuit

Brookdale Senior Living (NYSE: BKD), one of the largest home health providers in the nation, has petitioned the U.S. Supreme Court to review a case involving allegations of fraudulent Medicare billings totaling about $35 million.

The lawsuit was filed in 2012 by Marjorie Prather, a former employee of Brentwood, Tennessee-based Brookdale. Prather alleged that Brookdale and its subsidiaries billed for home health services without first obtaining required physician signatures and face-to-face documentation.

In 2015, the case was dismissed for lack of evidence. The case was revived in 2016 and again dismissed in 2017. Last June, the 6th Circuit Court of Appeals once again resurrected it. On Nov. 20, Brookdale filed a petition seeking Supreme Court review of that 6th Circuit decision.

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Brookdale argues that — guided by the Supreme Court’s 2016 decision in the Escobar case — circuit courts have issued conflicting rulings regarding aspects of the False Claims Act that have bearing on this case.

For example, Brookdale is arguing against the 6th Circuit’s assessment of scienter, or knowledge of fraud. Specifically, there is a question related to Brookdale’s knowledge of its regulatory noncompliance around the physician documentation, and how that noncompliance would or would not affect the government’s decision to pay the claims in question.

“The panel majority found scienter satisfied despite the complete lack of any factual allegation that Brookdale actually knew or was on notice that noncompliance … would affect the government’s payment decision,” the petition states.

Some circuit courts have issued rulings that align with the 6th Circuit’s views on scienter while other circuit courts have taken a contrary position, creating the need for the Supreme Court to weigh in, according to Brookdale’s petition.

Written by Tim Mullaney

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