United States v. Fazzi Assocs.

United States v. Fazzi Assocs.

Opinion

 [*194]  [***1]   KETHLEDGE, Circuit Judge. Cathy Owsley—a nurse for defendant Care Connection, a company providing home-health care to Medicare patients—alleged in considerable detail that she observed, firsthand, documents showing [**2]  that her employer had used fraudulent data from Fazzi Associates, Inc. to submit inflated claims for payment to the federal and Indiana state governments. She therefore sued both companies and some related entities under the False Claims Act and an Indiana statute. But Owsley's complaint provided few details that would allow the defendants to identify any specific claims—of the hundreds or likely thousands they presumably submitted—that she thinks were fraudulent. For that reason alone her complaint fell short of the requirements of Civil Rule 9(b). We therefore affirm the district court's dismissal of her claims.

At the pleadings stage, we take Owsley's allegations as true. See Norfolk Cnty. Ret. Sys. v. Cmty. Health Sys., Inc., 877 F.3d 687, 689 (6th Cir. 2017).

] Private home-healthcare agencies obtain payments from Medicare through a "prospective payment system." 42 U.S.C. § 1395fff(a); United States ex rel. Prather v. Brookdale Senior Living Cmtys., Inc., 838 F.3d 750, 756 (6th Cir. 2016). These agencies provide "episodes" of care, for which Medicare normally pays in two installments: an initial payment "made in response to a request for anticipated payment (RAP)" and a "residual final payment." 42 C.F.R. § 484.205(b)(1), (g).

The amount of each payment depends in large part on the patient's condition: the more care the patient needs, the larger the Medicare payments. For that reason, at the outset of a patient's treatment, a clinician (usually [**3]  a registered nurse) conducts a "comprehensive assessment" of the patient. Id. § 484.55(b). ] As part of that assessment, the clinician collects data for a form called the Outcome and Assessment Information Set (OASIS)—which is the Centers  [***3]  for Medicare and Medicaid Services' standardized assessment of a patient's condition. See id. § 484.55(c)(8); 64 Fed. Reg. 3764, 3765 (Jan. 25, 1999). The OASIS form records many details about a patient, including his primary and other diagnoses and his ability to bathe and walk. See Ctrs. for Medicare & Medicaid Servs., OASIS-C1/ICD-10 Guidance Manual, ch. 3, at C-10, K-6, K-14 (2015). Those data ultimately take the form of codes enumerated by the Centers for Medicare and Medicaid Services (CMS). See id. ch. 1, at 8, ch. 3. The data on OASIS forms—and hence the codes—"must accurately reflect the patient's status at the time of assessment." 42 C.F.R. § 484.45(b).

A home-health agency uses the OASIS data to establish an "individualized plan of care" for the patient and to complete a  [*195]  request for anticipated payment. See id. § 484.60 (plan of care); Ctrs. for Medicare & Medicaid Servs., Medicare Claims Processing Manual, ch. 10, §§ 10.1.7, 10.1.10.3, 40.1 (2021) (use of OASIS data for RAP); 42 C.F.R. § 484.205(c) (same). At the end of an episode of care, the agency [**4]  reassesses the patient's condition and updates his OASIS form. See 42 C.F.R. § 484.55(d)(1). The agency then uses the updated OASIS data to complete its claim for residual payment. See Claims Processing Manual, ch. 10, § 40.2.

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