United States ex rel. Lemon v. Nurses To Go, Inc.

Opinion

 [*156]  W. EUGENE DAVIS, Circuit Judge:

Qui tam relators Deborah Lemon, Sarah Diaz, Eric Castillo, and Laverne Fowler appeal the district court's dismissal of their False Claims Act (FCA) suit on a Rule 12(b)(6) motion against several hospice organizations owned and operated by Walter Crowder. The district court found the fraudulent claims, as alleged, immaterial. We disagree and therefore reverse and remand for further proceedings.

A. Factual Background¹

Relators are [**2]  former employees at Nurses To Go, a hospice care provider in  [*157]  Austin, Texas. Relator Deborah Lemon served as an administrator and supervising nurse; Relator Laverne Fowler served as a nurse and alternate administrator; Relator Sarah Diaz was an administrative assistant; and Relator Eric Castillo was a human resources and payroll representative. Each worked at Nurses To Go at various times between November 2013 and November 2015.

Defendants in this action are Walter Crowder, who is the president and director of Nurses To Go as well as the other named corporate defendants.² Defendants provide hospice services throughout Texas with operations in Austin, Cypress, Houston, Pasadena, San Antonio, and Texas City. The headquarters and center of Defendants' operations are in Texas City, where executives maintain control, establish policies, manage and direct personnel in all Defendants' offices, and where billing policies are made and managed. All Defendants submit claims for payment to Medicare for hospice services through the Texas City headquarters.

During their employment, Relators allegedly discovered irregularities in Defendants' billing practices to Medicare for hospice services. These discoveries [**3]  were based in part on an audit of patient charts from Defendants' Austin office in 2015 by Relators Lemon and Diaz. Relators learned that Defendants failed to complete and maintain certifications and recertifications for hospice patients; failed to complete and maintain physician narratives in support of certifications for hospice patients; allowed non-medical personnel to complete certifications for hospice patients; allowed non-medical personnel to complete physician narratives for hospice patients; failed to have required face-to-face encounters between physicians and patients; permitted nurses to conduct required face-to-face encounters with hospice patients instead of a physician or nurse practitioner; completed certifications after the time period required for completion; failed to write individualized plans of care; and billed for and provided services to deceased patients. Despite these alleged violations of the relevant Medicare statute, 42 U.S.C. § 1395f, and its implementing regulations, Defendants submitted claims to Medicare affirming that they satisfied these statutory and regulatory requirements.

In their complaint, to highlight these deficient certifications, Relators specifically pointed [**4]  to seven hospice patients' records (JS, CB, DW, TO, NS, LS, and TS), with allegations similar to those this paragraph:

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