SCOTUS Denies Petition to Clarify Standard of Pleading False Claims Act Allegations

On Monday, the Supreme Court of the United States denied a petition by RollinsNelson LTC Corp. and its owners to consider clarifying a standard for pleading False Claims Act (FCA) allegations.

Jane Winter, a registered nurse who formerly worked at now-bankrupt Tri-City Regional Medical Center, which had been owned by the petitioners, originally brought a suit against the petitioners Nov. 14, 2014, in the Central District of California, alleging FCA violations stemming from 65 purported Medicare claims that she claimed were not reimbursable. She argued that Tri-City physicians had certified the claims at issue as “medically necessary” and thus as reimbursable under Medicare; however, after reviewing patient records, Winter concluded on her own that the claims for treatment at hand were medically unnecessary, the petition explained. She argued that this rendered the 65 admissions to be false claims.

The petitioners, along with other defendants in the case, moved to dismiss on the basis that Winter had not sufficiently alleged an “objectively false claim for payment” and that the alleged “false certifications were not material.” The district court agreed and dismissed Winter’s FCA allegations.

Upon Winter’s appeal, however, the Ninth Circuit reversed the district’s decision, stating that under FCA allegations, the plaintiff is not required “to plead an objective falsehood and that implied certifications of medical necessity are material because they are a condition of payment,” the petition said.

The defendants then filed their petition, arguing that the Ninth Circuit’s decision “joined the wrong side of a deepening circuit split,” noting recent circuit decisions that fall on both sides of whether an objective falsehood needs to be pleaded in FCA cases.

“Only this Court’s intervention can reconcile this morass of conflicting standards,” the petitioners argued.

Further, the petitioners emphasized the salience of clarifying the standard, as “Medicare regulations are rules of national application that directly affect how beneficiaries receive care and healthcare workers make a living,” especially in “a time of unprecedented stress on our healthcare system.”

Nevertheless, the Supreme Court denied the petition.

Spertus Landes & Umhofer is representing the petitioners.