Many False Claims Act cases allege a violation of some technical provision in a regulation or contract. But a recent decision from the U.S. District Court for the Eastern District of Pennsylvania focuses on a different question: When are a healthcare provider's services so shoddy that asking the government to pay for them at all is a false claim?
This question was addressed last week in United States v. American Health Foundation Inc., No. 22-cv-02344, in which the Department of Justice sued the operator of three nursing homes under the FCA based on extensive allegations of abuse and neglect at the homes. The government alleged a host of horrid conditions at the facilities, including "that residents ... were frequently injured or in danger of becoming injured either due to neglect or allegedly intentional abuse," and that residents were frequently unattended and provided substandard food. The government further alleged that each facility was understaffed and that employees were often "openly hostile" to residents. As a result, residents were kept in unsanitary conditions and did not timely receive medications and other care. For each of the three facilities, the government provided specific examples of Medicare or Medicaid recipients who allegedly received "grossly substandard care."
The defendants moved to dismiss the complaint on two grounds: failure to plead falsity and failure to plead materiality. The defendants argued they had not submitted claims that were "false"...
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