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Not Better Late Than Never: Timing Requirement is Material to Payment


On June 11, 2018, in U.S. ex rel Prather v. Brookdale Senior Living Communities Inc., the Sixth Circuit reversed dismissal of a False Claims Act suit against the country’s largest senior living provider because the relator had sufficiently alleged materiality. The qui tam suit was brought by a former nurse who alleged that physician certifications of patient need for home-health care were not signed until months after the care had been provided, in violation of 42 C.F.R. § 424.22 which requires that such certifications be completed at the time a plan of care is established or “as soon thereafter as possible.”

Applying the factors that the Supreme Court identified in its Escobar decision, the Sixth Circuit held in a 2-1 decision that the relator sufficiently pleaded that the timing requirement in § 424.22 was material by alleging that it was an express condition of payment and referring to guidance documents suggesting that compliance with the timing requirement went to the “essence of the bargain” between the defendants and the government. Notably, the lower court had drawn a negative inference on materiality because the complaint contained no allegations about the government’s past practice vis-à-vis claims that did not comply with the timing requirement in § 424.22. The Sixth Circuit found that this was “one step too far” because although past government actions are relevant to the materiality analysis, they are not dispositive.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Gail D. Zirkelbach
Partner – Los Angeles
Phone: +1 213.443.5549

Brian Tully McLaughlin
Partner – Washington, D.C.
Phone: +1 202.624.2628

Nkechi Kanu
Counsel – Washington, D.C.
Phone: +1 202.624.2872

Crowell & Moring LLP is an international law firm with approximately 550 lawyers representing clients in litigation and arbitration, regulatory and policy, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity, equity and inclusion. The firm has offices in Brussels, Doha, London, Los Angeles, New York, Orange County, San Francisco, Shanghai, and Washington, D.C.

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