Court Revives Brookdale $35 Million Medicare Fraud Case

Following a long investigation and dismissal of Medicare fraud allegations brought against the nation’s largest senior housing provider in 2012, the case against Brookdale Senior Living (NYSE: BKD) was given another look last week by the U.S. Court of Appeals.

The whistleblower case brought by a former Brookdale employee, Marjorie Prather, accused the company of approximately $35 million in Medicare fraud related to home health payments. The case however was dismissed in 2015 due to lack of evidence given by Prather. 

Last week, the Sixth Circuit Court of Appeals reversed the dismissal of Prather’s claims about the submission of false or fraudulent claims for payment and the fraudulent retention of payments by Brookdale, according to court documents.

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Prather was hired by Brookdale to review documentation related to clients who had received home health services; the Brentwood, Tennessee-based company is a major home health provider in addition to being a senior housing giant. In the course of doing her job, Prather noticed the required physician certifications stating that the doctor had decided that the patient needed home health services, established a plan of care, and met with the patients, were all signed after the care had been provided, the court documents said. 

Her supervisors her to ignore the issues and one official said “[w]e can just argue in our favor if we get audited,” Prather claimed. 

There was a sense of urgency around getting the documents signed because the company was already behind on paperwork that was supposed to be submitted to Medicare, the allegations state. These instances made Prather believe Brookdale had provided the home health services to patients without the aid of a doctor and then found doctors after the fact to validate the documents. 

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Prather used evidence from her work to bring a lawsuit under the False Claims Act. The appellate court reversed the dismissal of a circuit court from 2015 and stated that the documents were signed by physicians months after care was given, and the law states that the signatures from the doctors must be completed as soon as possible after the plan for a patient’s care is established.

The appellate court also disagrees with the circuit court’s assertion that Prather didn’t sufficiently plead the submission of the claim, so they have reversed the dismissal of her fraudulent retention of payments claim as well. 

“We are disappointed by the ruling and agree with the dissenting opinion,” Brookdale told SHN in a prepared statement. “Our company is committed to a high level of quality of care for our patients and over the years has operated in their best interest. We intend to vigorously defend ourselves in this case moving forward.”

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Both courts however do agree that Prather did not show enough evidence to support her false records claim, so that will remain dismissed.

Written by Alana Stramowski

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