In home health care fraud case, Tennessee District Judge denies summary judgment to both sides

by Ben Vernia | January 5th, 2012

On December 19, District Judge Todd Campbell of the Middle District of Tennessee denied the motions for summary judgment of both the United States and the defendants, home health agencies and their owners. In 2009 and 2010, the Court had denied motions to dismiss the allegations, that the agencies and their owners submitted false cost reports which failed to disclose the related party status of a management services company the agencies employed.

In this latest ruling, Judge Campbell first rejected the defendants’ attempt yet again to raise a statute of limitations defense, based on when the government learned of the relationship between the companies. But being a related party was not itself is not against the Medicaid law, Judge Campbell wrote. Instead, it is the filing of a false and fraudulent claim – the cost reports – that violates the law and that information was required to trigger the running of the statute of limitations. Because genuine questions of material fact remained over when the U.S. learned of these filings, summary judgment had to be denied.

The government’s motion – that the defendants’ cost reports were false and fraudulent because they failed to disclose the relationship – fared no better. Judge Campbell reasoned that the questions of fact concerning the relationship between the parties persisted, preventing summary judgment.

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