based not on the allegations in the complaint but on the court's speculation about facts outside the record including that given the longstanding nature of the regulation and the sheer volume of medicare claims submitted that there must have been past violations and that the government must have paid those claims despite actual knowledge if that mode of analysis were correct urges on appeal any defendant in a false claims act kids could  absence of actual knowledge i mean i get that seems to me that makes a lot of sense can you help us figure out we're the government can you help us figure out whether the whether the issue here is material your honor the government has not taken a position in bottom line question of materiality i know you haven't taken a position but i can't find anything that says how late is late and what's a good reason so can you help us at all on that your honor i authorized to speak on the issues that we briefed in this case i do think it's worth noting with respect to the materiality inquiry and this underscores the district court's error on the factor that the government cares very much about that the district court in this case found that the timing requirement was a condition of payment and the district court found that that factor which is part of the multi factor holistic inquiry under ask are we somewhat in favor of a finding of materiality yet at the motion to taken into account by the government your honor at this court discuss the timing requirement in the first panel opinion in this case and that there was a violation of the as soon thereafter as possible requirement the regulation when there was a delay that wasn't justified that we have been taken or so how do we know whether whether whether the length of a delay is or is not sufficiently explained  justification does the government have any guidance on the question for this court on appeal from this decision is whether the district court appropriately dismissed the complaint on the pleadings as the governor  particular issue where it is tell us whether the government has ever denied any claims on the basis of what is alleged to have been the false certification here well your honor that is exactly the error the that the district court made at this stage in the proceedings by requiring a leader to come forward without evidence you're not the relator you do you chose not to bring this case i'm asking as an officer of the corps do you know and if you if you don't know or you're not willing to tell me that's why just tell me do you know whether the government ever actually denies claims when you do know your honor i can tell you i am not aware but that is outside of the record in this case and of course when the complaint is being dismissed at the motion to dismiss d h the court and this court in reviewing the court's decision below is looking at the pleadings taking all factual inferences in favor of the related her and the allegation in this in this complaint is that the government was unaware of the violation when i paid claims so i do think it's also worth noting that the allegations in this complaint are not that there was widespread violation of the timing requirement as the court noted in the first appeal this appears to be an issue of birkdale zone making through aggressive solicitation of home health care patients which created a backlog and a looming financial crisis for bucks and now the district court instead of  argument given the longstanding payment plan that there must have been other violations and that the government paid now we know from ask the bar that absent actual knowledge by the government the payment decisions of the government are simply not relevant they have no bearing on the materiality question at this stage in the complaint success with you so far i take it you also can't answer then why the question of the date of the certification is not does not appear on the form that is submitted so that somebody could look at the form and say these are the dates of care this is the date the certification was signed therefore we can see how those do or don't match up you don't know that decision in this case there wouldn't be a violation any less there was not a justifiable delay so the fact that the government may have to date that the care was provided and the deep if the physician certify doesn't mean the government knows that there was a violation of the timing requirement here it is good to have that information as i thought you didn't have that information it's not on the form the certification doesn't have to be submitted it just has to be on file so i thought you all said that you didn't know when the certifications were actually signed so therefore you wouldn't know whether it was late and therefore you wouldn't enquire into whether there was a justifiable reason do i misunderstand that your honor the complaint a s that the certifications are on file it's my understanding that no particular form is required although there are forms available they can be used but again even if the government did you know they were late or didn't you know they were late your honor the question is whether the government knew of the violation and we know of the violation when we are aware that there has been a delay that is not justified the allegation on the pleadings and again this is being decided at the pleading stage is that the government was unaware of the violation the district court should have accepted as true that factual allegation now all of the i understand your honour's frustration and all of these types of questions are things that can be addressed and answered in discovery through later stages of the case resolved after there has been discovery and answers provided on these types of issues if the parties choose to perceive that way but again at the motion to dismiss the district court significantly erred in holding a later affectively to the burden of coming forward with past claim denials in order to overcome a motion to dismiss someone to reality when the district court good afternoon your honor sir i'm patrick merritt of the tennessee bar and i would like to reserve three minutes for rebuttal please will you please the court today we asked the court to reverse the district court's judgment below because the court affirmed that the term material means having a natural tendency to influence the decision maker or be capable of influencing the decision maker which is what would lead you to believe that it would be capable or would of if they don't even inquire as to when the certification was signed and they ask you to fill in eighty one fields and not a single one of them ask you to say when the certificate was side when the certification  aside is your honest question the why did they not ask for the date on the form assuming that they don't ask for it when they ask for eighty one other things why would we conclude that it was material i would think that would be a matter of factual proof and there could be other factual matters when the claims were submitted that would bear on that and that really is true that everything that was on the form is correct every blank that was filled in was filled in correctly correct felt what we don't concede that we don't allege that they were wrong but we don't concede that they were done right where you so specify what's what the where the with particularity right i'm not saying that the forms necessarily had falsified information on them that way what i'm saying is we don't we don't concede that all of the forms were gone perfectly the only way that the form itself could evidence for it is in the certification part of it on the back that says they complied with all of the rules and the only place that you could put that on the form would be in the remarks section right correct and the guidance letters only talk about two things that you that people should put in the remark section and neither of them address themselves to when the certification was or the  i don't remember that specifically off the top of my his sitting right now but i believe your honor is correct on that so the bottom line is the date that is own the form if it is after the episode of care is over doesn't necessarily mean that the underlying claim is invalid what it does mean is it raises a question as to whether it was timely and i think the issue is the regulations provide providers with flexibility recognizing doctor schedules and everything else and i think that that is to take that flexibility and then to eliminate the timing requirement say are might be fraud right well and also the other ones we have and the four that are in the complaint well then there are others to those our example is no place in exhibit a or b doesn't even show when it shows us when the episode ended so if you assume that it had to be signed by that date just for purposes of our discussion no where on the either of these do you use do you say when the formal side so you can't even look at this to see that the to find to see that these are the claims that you say the foremost side after the episode was done and then arguably without justification we were not alleging that exhibits a and b established as a matter of law all that we when what we're doing is we identify the claims that we say are late in exhibits a and b but they don't say whether it doesn't show on e and b why they relate well can you can you tell from a and b that they're late they all were certified after over we believe they were done so that is not on a or b that's my point no coulomb here tells us that any claim on a and b was certified after the episode and date because it doesn't have the date of the certification the allegations in the complaint or that every one of those claims were certified after the episode of care was over it might have been one day and it might have been twelve months well we believe that the vast majority of those are several months late so we're not talking about a late what we're talking about are care that has been provided and literally months later they're running around trying to get certifications that should already be documented and already be obtained even though the senior executives at brookdale aig knowledge as they were doing this that they are literally have to go back and literally refresh themselves the claims are so old  date we say when they're certified with respect to exhibits a and b we say that they all were certified after the episode was over and most cases it was long after but you say that in the complaint yes by definition as long as you've got a valid reason why you did it you can certify a claim after the episode of care was over right right and in fact that's the product that's one of the reasons why there's a process called at test station as opposed to certification right well i don't disagree with that i'm sure there could be others but i think just to nail down the fact that it's important the would get the certifications right so how is one to know when they're being accused of fraud how late is too late if if these were all one day late and i know that's not our case would you have a case that this was fraud if there were one late we would not have brought the case that didn't ask you why they were brought ed do you think it was fraudulent if they were all one day late probably not but i can't so i can't rule out that possibility with certainty so i think it is also factual record and that's the main problem here is the court decided it not on the factual record the court looked outside the pleadings and basically took some statement from book deals brief brief as true and that violated the standard of care as well as the escobar decision and when you're talking about the pleadings the only pleading that we're looking at is the third amended complaint and the exhibits there  any facts that the apple eve knew they were about leaving a requirement that with material the pavement so how do you respond to the allegation of the apple ether that there was no allegation and no nothing in the in the pleading that would be evidence that they knew they were violating well they concede in their brief that the time requirement is a conditions of payment that the providers have actual knowledge that of materiality because it's labelled as a conditional payment doesn't that get back though to the series of questions that the church mckay posed and that is if you don't have any any parameter earth how late if late then how to affect you how does that response really fat if by a question i think that the answer is based on the flexible language use it was apparently a conscious decision not to have a fixed date i think that is something that is bit to the benefit of the providers and whether it's late or not is something that is a factual matter just like whether something is reasonable or not that's typically a matter of factual proof under the circumstances but that the respect that's not the question the question is how late is late that would then be material to the government as to whether to pay the claim that's the issue here we believe the time had a requirement is material at the materiality is the time a requirement is material ok so then if that is if they fall a did it is it too late that is a two weeks is that a month if it's six and i think that's what you know what we've been struggling with here i think the way that we look at it is the time requirement is material requirement whether or not it was violated depends on the circumstances and maybe one day late is not a violation it doesn't mean that the requirement is not material it just means there wasn't violated where do we let's assume that they were all at least a couple months late which is what you've alluded to and let's assume the reason is as the government attorney said that there was this pushed to do home health care and that got them behind so there's a backlog and it took a while they work through the backlog let's assume all of that what we've heard so far is true does is that information material to the go and if so why it seems to me it's only material if they would if they would not p would if they would ask for more information or if they would ask for an audit so why is it material its material because it ensures that the doctors ordered the care on the front in the news a project projection of medical needs on the front end it ensures that the patient will the treatment started and because of schedules they certified a week or so after the treatment started you allege he didn't sign it but you don't allege that the care was done without the doctor ordering it well it is implausible for a doctor to go through the calculation of the confines of the home and these medical services planeteers been established and do all that and make that determination and then not document that is i mean that  implausible it least to the relator perspective now there could be various reasons that worked with doctors from time to time but you know that may be wise which the court ruled on previously i think the question for materiality is whether it was a day late whether it was eleven months twenty nine days late are there any facts alleged in this case that that mattered one whit to whether the government paid these claims or not the court addressed that question to the government the government's answer here is that they're not aware what one way or the other the district court's ruling in this case should be upheld because it correctly applied as bar which said to get past rule a nine before put for pleading materiality the plaintiff has to plead some facts that make it plausible that the underlying regulatory violation was material to the government's payment of claims and there are no facts alleged in that regard here so you think that the allegation that that that does not meet that threshold question criteria that's correct your honor but i don't want or there are no allegations in this complaint that even if the signature on the physician certification came and months later there are no allegations that in the fifty years that this regulation has been on the books this regulation was issued in one thousand nine hundred sixty seven it's been out there a long long time there's there is no allegation that the whether the signature in the physician certification was late that the government has ever denied payment of a claim to a home health agency because of that there's that i wish them at this stage or is that a question  that that should be rethought after some discovery it's absolutely a question at this stage because the supreme court said in footnote six to ask a bar that looking into materiality is completely appropriate at the rule twelve the six stage and that the plaintiff has to plead facts making materiality plausible in but but i thought there is this one paragraph one twenty five which says the united states was unaware of the fals of the claims that defendant was making and and paid the claims and that there is no allegation opposite that so why don't we take this allegation in the light most favorable to the pla because that's simply stating a conclusion they're stating nothing more than if the government had known that the government had paid i would submit that that gets nowhere close to nine b it doesn't allege any any facts giving th  court any any type of comfort that the relator has any basis for make first stating just a conclusion what basis does the relator have for saying if the government had known it wouldn't have paid the claims where relax the ninety's standard it was significant to the court that the relator herself had worked in reviewing medicare billing claims this court said in its previous opinion quote reviewing claims for medicare billing purposes was pretty there's job if her status matters for how this court construes the present an element it should also matter for how this court construes materiality it is shocking that given that this is what this particular later does where there is any allegation from this relate or that in her own experience she was ever aware that the government would deny payment of claims because of the timeliness of the certification she doesn't allege that she edges that the government was unaware in your honor i don't know how could she alleged that the government was aware and didn't pay the claims i don't know what her basis is for alleging how the government was aware that you were asking her allege something that's contradictory to what she is alleging i'm saying that why don't you deal with what she says which is that the united states was unaware of the falsity of the claims and paid the defendants in in reliance on the accuracy of you no no your honor i think i think we're talking about two separate issues you concede that the government was unaware of it you know nowhere does do they ask you for this information so how would they have been aware we can see that the government is  e and that does not matter at all to to the arguments that we're making here to respond to all that it is relevant to the question of whether the fact that they paid claims has any legal significance it's to materiality if they didn't know about it and they paid the claims you could hardly stand as the district court seem to do in part on the fact that the claim to pay the government's argument makes a lot there i actually would disagree if you look back at the supreme court's opinion in the supreme justice thomas goes through a litany of things that he says materiality isn't he said it's not how it's labelled he says it's not just because the government could deny the claim and then he says what  the opinion says is proof of materiality could include that the defendant knows that the government routinely denies payment of claims in the mine run of cases involving this particular regulatory violation period that's the first part then justice thomas says can virtually if there is proof that the government had actual knowledge of the claims that were paid and paid them anyway that would be very strong evidence we don't get to the converse lee here our argument in this case is not that the government had actual knowledge claims and paid them anyway our argument here is that the plaintiff has a burden to carry in the plaintiff has pled no facts showing that compliance with the timing requirement was material to payment that is completely consistent with what justice thomas said is for the government to argue that the only time that passed government action matters is when the government has actual knowledge of what was going on unduly constricts what the supreme court was saying the government pays a claim and then they find out the claim was fraudulent and they can come back to you to recover the payment and or prosecutor client right that's correct  curiosity i don't know that this is relevant i'm just curious the record have they come back to you to recover the money on any of these claims no no your honor outside the record i'm not aware of the government ever denying payment of a claim because the position certain signature on the surf occasion was and was and i come back to you and ask you what were the justifications for the lateness of the circuit no your honor but what we're doing is we're looking at the complaint as opposed to any other fact information that could be in a brief or anywhere else we look at the complaint and see if it's adequate and my understanding of the escobar case is that there were proximately five factors that would be evaluated and it would be a balancing test and so you're focusing on one and saying well that one wasn't shown and therefore you win but you need to address all of the factors yes your honor and if i were if i was focusing on one it's only because that's where the questions have gone so far another very important factor to the supreme court was that materiality is nor is more likely found when the regulatory violation goes to the to the essence of the  trial court of the circuit i don't know if i don't know if the trial court put it in those words the trial court decided to the essence of the bargain language the trial court i think found taking a holistic analysis that the trial court did not think that materiality burden had been carried here and i think it's important to contrast the facts alleged here with the previous circuit courts that have already construed ask a bar look at the triple canopy case in the fourth circuit in that case th allege that the government contracted with triple canopy to provide security services and a military base in iraq were later alleged that the the triple canopy used security guards who could meet marksman p requirements and triple canopy falsified marksmanship reports what the company with the with the fourth circuit held there was if you have a contract for what the government is paying you for is to provide security  services and you bring security guards that can't shoot straight the government is not getting the benefit of the bargain the government's not going to pay for the for those for those services it was also significant to the fourth circuit that why did triple canopy false of the marksmanship reports that would lend some inference or some credence that they knew they did it because they knew it was material to payment there's no allegation of any type of misrepresentation here as judge noted the information that's on the face of the claim itself no one is alleging that's not correct but more importantly than than that if brookdale understood the timing of the physician signature to matter to payment then what the doctors and the date that they were actually signing wasn't there some allegation that the doctors were were were were backdating there is nothing there is no misrepresentation in the services that were provided here additionally the government received the benefit of the bargain the government was paying to provide home health services there's no allegation that didn't provide home home health services i know there's a smattering of facts in the complaint about aggressive marketing practices that's not the theory of liability that the relay relator is taking forward the theory of liability in this case is that because signatures on certification forms were late that standing alone violates the services and that the defendant in that case provided personnel who weren't qualified and who weren't properly supervised so was that was the allegation that bottom that unnecessary services were being provided the ability to do the certification after the fact was a way facilitating unnecessary services though i don't think those are the factual allegations here we're now in the thirty minute complaint previous iterations of this  complaint did raise did did seek to hold will for providing medically unnecessary services those claims have been dropped in favor of the one claim that's been brought brought before this court court at this time as a matter of fairness and notice to the defendants i think we can only be held to respond to the theory of liability that that's before the court and it goes to the timing of the signatures we're not asking for this court to rule  that the timing on a physician certification could never be be material i think it's necessary to rule that way what we're asking is that based on the facts alleged here where the relator does not call into question the quality of the certification they say it's late but they don't allege facts saying that the doctor didn't give consideration to whatever he or she should have they don't allow that the how late  question how late would constitute a violation that would be concerning again i think that goes more to falsity and as we argued previously th guidance from from c a massive as you have one year within the provision of services to bill for claims that clearly if it's being provided outside of the year that would be too late i want to reiterate that for materiality purposes in the fifty years since the regulation has been out why isn't there any any instance of another f c a case any litigation involving whether the government denied payment of claims that it shouldn't have a corporate integrity agreement we don't do we know that there isn't any evidence in the sense that there hasn't been discovery and there hasn't been because it's on a motion to dismiss stage there isn't any burden to produce that kind of evidence your honor there's no burden to produce the evidence but there is and then you are lying in the absence of it so we're opening a burden on them we're absolutely putting the burden on them they're the plaintiff in the case they have to plead materiality was sufficient particularities and they haven't we're pointing to the absence of that because you know the supreme court has never said that this court has to set aside judicial experience or common sense when it's looking at looking at a complaint if this regulation of been passed six months ago i think you would view it differently than if it was past fifty years ago can you help us out with the difference if there is any between certification and station is i understand it the certification is what the physician is required to certify that the patient is homebound that the patient required the services th e plan of care was was appropriate i think of at a station in the sense when the physician is adding something to a medical record that was not documented at the time that the physician provided provided the service i'm not sure that  station method was how obtain the late signatures is that correct or incorrect if that's alleged i don't think that it would be relevant at the end of the day to whether the certification was appropriate or not it would be relevant to me the most extreme position somebody could take that arguably printer want took was that if you're one day late that that's that that is a condition of payment and it's fraud and that can't possibly be true if you if they're if they provide for an anticipation method later on i would agree with that in particular this isn't just about whether the claims were plaid correctly this is about whether it was it was engaged in fraud and into twenty two thousand and eleven two thousand and twelve in this lawsuit was filed the government investigated the allegations that were made here the government declined to intervene in the case it is not our view that declaration is dispositive but it's certainly a factor that other courts of appeal have have looked at the government reviewed the allegations and the get go that would eliminate the whole relator scheme in the false claims act if we say well the government decided not to intervene that's the end of the case and that is not my position my position is it can't be ignored in the triple canopy case after the government you're going to put it on the scale against the relator whenever the government says we don't really want to intervene i'm saying i'm not sure how that can be ignored you are definitely one of negatively rights you're putting it on the scale for that what what case would you say supports that view triple canopy and also the gin and tax third circuit case in triple canopy the allegation is after the government learned of the allegations that the triple canopy provided guards you couldn't shoot delegation as the government did not renew the contract at that point and then the government intervened in the lawsuit in the fourth circuit said that's something that the court could take into account in considering materiality for the third circuit it went the other way the third circuit noted that the government hadn't intervened and that was something that the court could take into account because ultimately the question here is did compliance with this regulation in tw it matter to the government back then for payment purposes and has the sixth circuit taken a position on this point that you're asking us to know you know your honor and has the supreme court taken the position taken a position on whether intervention matters one where the other no i'm not aware that it has thank you did you find any cases where the government showed up as an amicus to argue about whether their lack of payment or payment was material and then refused to answer any questions about materiality i think the government has routinely appeared is as as amica as in cases subsequent to ask because the united states hasn't like the direction that the case law is going which which is that what the government does in practice matters here and it can't it can't be ignored by the court it is it is a fair question here if if there is nothing before the court in your honor i understand your questions and i would still say we're not putting them to the burden of their evidence at this point but we're absolutely putting them to the burden of pleading some facts by which britain that would show that brookdale knew back in two thousand eleven two thousand and twelve that if the surf occasion wasn't timely that that would lead to denial of the claim in and would be considered fraud is that materiality or is that the way that justice thomas describes it i'm not sure that the court breaks it out in the opinion i'm in i would submit that it goes somewhat to how could so on c n n to you could make the argument that there are allegations in the complaint that people warned key brookdale people that their activities were suspect here doing this after the fact as opposed to during the proper time in the process i would disagree that that that's what the app that that's what the complaint says the complaint talks about all sorts of issues or problems that the relator says that she had with what was going on there the revaluations where there were  verbal orders or not i don't read anywhere in the complaint and i'm happy to be corrected on this i don't read anywhere in the complaint where there are a later said she complained about the timing of the physician signature on the certifications and that anyone at birkdale told her  to ignore that i think what even what's alleged is did hold these claims because it didn't have the physicians certification yes absolutely did not submit claims if it never got the physician other allegations about the services that were provided or that the certification itself could be called into question our view is that is not enough to plead materiality or scienter thank you very much thank  initially i would like to know how we saw it in our brief that the effect of the government's declamation decision has no bearing on the issues in this appeal referring to united states chandler versus cook county two seventy seven takes place after the allegations and after the underlying conduct took place but the defendants want you to ignore the guidance that came shortly after the allegations in this case and perhaps with the government knowledge of the allegations in this case this is it is not acceptable to wait until the end of the episode only guides that i could find as one that came out after these claims were filed and i'm afforded one that was f to be fraudulent to file them the way in which they filed them before the guns came out when there's no other guidance anywhere that i can buy i'm talking about the materiality aspect of it and the government's indication after learning of the underlying allegations that it is not acceptable to wait until the end of the episode shows that the government does care now that's after the underlying conduct but so is the de and the fact is the governor is not going to know about the underlying conduct until after the lawsuits brought and then it's on the right are well what have they done since then to say it doesn't matter are you suggesting this some evidence that this night two thousand and fifteen i think it was  was brought about because as of this lawsuit no i'm saying it could be we don't know i mean i don't know what prompted that i'm saying that it was issued by the government after that and so they probably had a problem get some sort of notice the government learned of the fraud what have they done and did they say it's ok like down in the case down in the case will they found out the nobody cared they knew about the go reels and the government still paid that's not what we're talking about here and that's the key is there was no actual knowledge of the underlying fraud when the claims were submitted so how could the government possibly have conceded that those claims were valid and that it wasn't material as a matter of law so the one thing is we talk about the facts about we have alleged about materiality and of course condition of payment that's one factor and we also as the court noted in the in this  opinion the last time the deadline ensures that the patient needs the care that's provided in this design to prevent fraud how can that not be important you have a situation where you're the home the the way the industry works why would they allow you to go out a year to submit your request for payment well you can submit your requests for payment they could be different reasons but not the certification and in the meantime if you don't have a certification you can you can substitute in anticipation i think that test ation awhile some types of certifications but it doesn't mean that that's a get out of jail free card and all of a sudden when we said it must be completed as soon at the time of the episode it begins or soon thereafter is followed we're going to ignore that it doesn't i mean what does the artist station have or say it's different from the certification is it under oath is there an example in the you know that we have the only as a matter of judicial notice or attach the complaint i don't see that there is one  were submitted in conjunction with the with the certification i don't i don't recall what they what they may or may not say on on before the other thing is well how could they  known that this was fraudulent well you know the doctors were they having to pay the doctors because they anticipated they would be uncomfortable they're sending out these e mail alerts saying you know better know we're going to get we may get audited if we do this and why are they not want to audit well they don't want anybody looking at these climbs they want to middlemen maybe the government notices they were like maybe not if they if they notice they were late or so then we can argue are  taxpayer we just finished taxes in here that it taxpayer they'd know they did everything right they'd welcome an audit do you know of anybody that would welcome an audit no matter what you did right or wrong you would welcome an audit but i think when you have something to hide