On August, 20, 2014, in the case of U.S. ex rel. Absher v. Momence Meadows Nursing Center, Inc., the Seventh Circuit rejected a broad interpretation of what could constitute “worthless services,” instead setting a high bar to for False Claims Act (“FCA”) relators succeed under such a theory of liability. The court also made clear that relators proceeding under a “false certification” theory of FCA liability must specify and quantify the specific claims that they allege were false.
In Absher, the Court was presented with an appeal of a multi-million dollar jury verdict against Momence Meadows Nursing Care Center (“Momence”). The suit had been brought by two qui tam relators, who were nurses formerly employed by Momence. The United States had declined to intervene in the case before the District Court.
The relators alleged several theories of FCA liability, which the Seventh Circuit dealt with in turn. First, the relators claimed that Momence submitted “thousands” of claims for payment to Medicare and Medicaid, which were false because they were based on care that was non-compliant with Medicare and Medicaid regulations. The allegations included that the facility was understaffed and dirty, that residents experienced accidents such as falls, that there were infection and pest control issues at the facility, that employees were that the instructed not to chart pressure sores and symptoms of scabies, and that at least one resident had died due to poor care. State regulators visited the facility over 100 times during the period at issue and issued thousands of dollars in fines for noncompliance with regulatory requirements, but according to the relators, Momence did not comply with approved plans of correction. According to the relators, these and other violations rendered the care a “worthless service,” and hence it was false of Momence to seek payment from the government for this care.