involves the unified certification theory of liability and therefore the decision from the supreme court last year in universal health services versus us ex real escobar is directly relevant to this case are you not relying on the false claim portion are in pricing primary reliance on the implied certification well the implied certification is an implied sort of occasion of compliance with the false claims act provisions but the the the we believe that the framework of the allegations in this case do fall within an implied certification framework generally well what is the false statement that you're climbing the implied false statement here and it would if i could go through the  analysis that would probably make it clearer but the influence plied false statements here is that first of all the general requirement for payment in medicare provisions is the reasonable and necessary standard and that's the statutory requirement for payment that in turn includes elements that this court held in the international rehabilitative sciences case includes among others critically a component of safety ineffectiveness safety and effectiveness in turn can be established through one of two ways under medicare standards what religion here is that the use of the devices that was involved in the claims that we're dealing with in the complaint fails to me either one of those do you conceive though that if and  one fifty point two covers devices that that's the end of your argument no we do not this really isn't about so much about whether or not the device is covered our position is that notwithstanding the device being covered by that particular national coverage determination the real issue here involves the claim itself so it's not about coverage it's about the individual medicare beneficiary who is actually being treated with that particular device and devices approved then you get you under the medicare rules that there's an n c d covering it up and if it's approved that you can be reimbursed but the core question here and this is where the escobar framework really comes into play the core issue here is the safety and effectiveness of that device when used for that particular person and if it's not safe and effective according to some i mean the hasn't the n c d resolve that question there's been a determination by medicare that those devices are safe and effective under that provision our position is that the n c d one fifty point two relates in general to the technology itself and yes it talks in general about me talking about the some extent the device has been approved but it's not approved specifically for use in the cervical spine and so without that specific authorization the defendants need to go one step further to demonstrate that it was a safe and effective of very close to what we're saying your honor i think it's a slightly different than that because we can't forget that one of the devices that is not part of this case there are devices out there that which are truly f d a approved for application in the cervical region  critical requirement that is also how do we measure that are you suggesting that we have to use some standard other than the standards approved by the government no no the standards that we're relying upon are the standards that are articulated in the medicare manuals and the ones that actual disk or also talked about in the international rehab case which go back all the way to one nine hundred seventy seven the same standards of safety it can either be something that's based upon authoritative evidence which essentially acquires in this circumstance dealing with these particular devices clinical trials or it can be approved as generally accepted as safe and effective for the purpose for which it's intended and that is a more a broader kind of safety standard that would then embrace general but it must satisfy one of the other and that's the key point and that's it and i think if i could just discuss the escobar framework as ask a bar requires that materiality i mean that's the important  is that it's covered how do you how do you reach the materiality standard well let me first talk about falsity because that's that's the first thing that the that the court addressed in asking for the falsity issue is a stablish by looking at what was represented in the in the forms or the claims or the documents that were submitted versus what was omitted then the question becomes is what was omitted something that creates a misleading half truth well what was so meant and what was omitted here is the device  determined simply by saying is it an express condition of payment can we find some express condition of payment and the example that they use which was a really good one for this case also is that you could have a for guns for example and nowhere in the contract does it say the guns have to be able to shoot but that would still be a material condition and if they contractor who supplied the weaponry supplied guns that really didn't shoot that would have been a material n disclosure of a critical material fact so that's the issue first is is or falsity is there something that's a in the forms or the representations that are made that creates an implied representation what's in your argument is the implied representation is that it's safe and effective is not like representation is that it meets not only the conditions set out in one fifty point two but it meets all of the other requirements for medical i sent one fifty point if it meets the conditions and one fift one fifty point to the end of the story and why isn't your complaint with the white what c m s is known as opposed to there being a false statement here well the one fifty point two simply does not address in any way safety and effectiveness there is however the other national cover sitaram anation which does address safety and effectiveness and addresses durable medical equipment specifically and that national coverage determination which is to eighty point one specifically states that  something which must be considered in a question of covering one of these this kind of device durable medical equipment is whether or not it is safe and effective for the pilot also tells you to look to the ends to see if there's an end cd that covers it it tells you to do that as well so if there's an end cd that covers it then you don't repeat the safety and effectiveness standard correct well what we're arguing is at the end c d s and this is not just what we're arguing this is this is what medicare says this is what cities have to be construed coherently and harmoniously you can't pick and choose between the and cities that are going to apply well if two eighty point one says go to the appropriate and see and i one fifty point two is the appropriate that's when there's not and cd that covers the device correct no that's when there's not an ensuite there's when the device that's that's in question is not in the list that's contained in to eighty point one that's different if you to cover every single device does not exhaustive list correct not an exhaustive and it does deal with generic devices these are not generic devices so in if it's not a generic device contained in that list then the coverage determination must concern whether or not it is safe and effective for the purpose for which it is used so it's at but again if i could get to the to the escobar framework a little bit more i think that might provide some clarity which is because because the discussion here is very been filled out no unusual circumstances have been identified even though there's a place to do that on the forms on the claim for signifier indicates that this is a class three device which is subject to regulation by the f d a our position is that that the very fact that that representation is there that it says that this is an f d a covered product and the fact that  with issues concerning safety and effectiveness we rely upon the f d a and their findings of things that are approved uses so there is also that medicare also permits off label uses i mean you have t s decision of december of three which says that they they will cover off label uses absolutely absolutely indeed it does but when you are representing when you are submitting a claim it's our position that you are submitting claim that says that not only is the device covered but that it also meets the fundamental core requirement of safety and effectiveness and it can do that again either way in these circumstances however as a matter of factual allegations we alleged there is no basis for general acceptance and that was the key thing that was left out of the second amendment complaint that we brought into the third amended complaint and it is significant here because one should push aside the idea that these devices have somehow been generally accepted as safe and effective for cervical use then the focus comes back down again to whether or not with these two devices the spinal pack and the spinal logic have they been found to be safe and effective for this particular use we do you approve see and turn that's a real problem here in light of one fifty point two how do you prove that this was a knowing false statement well again going back to the escobar analysis  where the court says you don't you don't that's not one bit one question there's not some little bright line litmus test that can be applied everywhere you have to look at several different factors is it related to a condition of payment if so is it related or is it perhaps related to a core concern of the program which safety ineffectiveness is that it's or is it a diminishment de minimus kind of violation or what is the government done in the past when these kinds of things have been absent where you look at circumstances where medicare has found devices probably other medical products to be not to be safe and effective they don't pay for them and so here what we're dealing with is is something that where the with the with the materiality question and the see enter question it almost becomes the other the other part of the escobar decision talks about how materiality is and cmdr does not have to be shown by saying you know i knew that i've had to do this in terms of to in order to comply with this and it was spelled out the guns example that the court used says that's a kind of situation where if you know that the government's not going to pay for guns they don't shoot because the government has refused to pay for guns that don't ship in the past then you have actual knowledge of that material requirement even though it's not spelled out anywhere in the contract even though there's an and say david can be reasonably right is covering this use in approving the shoes well that could be in cd can certainly be read to cover that the at the devices in general but that does not excuse the defendants from complying with every other requirement that has to be satisfied in order to make the claim reimbursable and that's the key question is it required to make an individual claim involving a person who has that particular condition is it necessary for it to be safe and effective for that person for that medicare beneficiary and we are arguing that yes indeed it does that it really isn't any good to submit a claim for someone who has a cervical condition for which these devices have never been shown to be safe and effective under either standard under medicare and say well it's ok because it's ok for lumbar that doesn't make this claim reimbursable so that's the distinction is it really goes back and ties into their knowledge about their own requirements and your jobs about forty seconds to ok i would direct the court then to the section that deals with the the defendant's awareness of the p m a process there's about fifteen pages in th complaint that talks about their own awareness of how important that is for the safety and effectiveness of their devices thank you c a one fifty point one zero doesn't it if there's no coverage determination right the national coverage determination sets out a list of conditions for which c m s has made a binding and conclusive determination that these devices are covered but it doesn't talk about cervical juice it talks about use as an adjunct to spinal fusion surgery for certain high risk patients and that is the coverage use as an adjunct for spinal fusion surgery there's no question that all of the claims that issue d should be read to have a narrow we narrow our interpretation then it says or there should be some implied suggestion that off label uses of devices aren't covered there's nothing in the language of n c d one fifty point two that says that so you're saying that because all the claims in this case were in fact the spinal fusion surgery they're deemed to be safe and effective and reasonable necessary for these patients yes i am and the reason i say that is s has said repeatedly it says it in the federal register notices that are cited in the complaint it says it in the medicare program integrity manual it says it in the national coverage terminations manual when c m s issues and and national coverage determination that is the agency's binding determination of what uses are considered to satisfy the reasonable and necessary statutory requirement in other words the agency when it is use the n c has already analyzed whatever it feels is necessary to analyze to convince itself or to be to be satisfied that these uses are ones that satisfy the necessary reasonable and necessary statutory requirement for coverage does that mean it covers any device them that claims to be a stimulant or no you would have to be an f d a approved device in order but there are certain limitations on the types of devices that  goes there should have been supplemental approval that it defines for cervical use that we disagree with that there were no facts pled in the complaint that that suggests that the intended use was for cervical in fact the district court was very careful when it granted them leave to amend it was a very narrow grant of leave to amend in their supplemental brief after the motion to dismiss had already been briefed on the second amended complaint after the court had already had a hearing after the court requested supplemental briefing for the first time they were later suggested in their supplemental brief that there might have been promotion by sales reps that would have triggered this intended use regulation and so the district court in her grand discretion did them leave to amend to address that type of off label promotion and whether that could have triggered a requirement to file a p m a supplement the relator is came in and said over and over to her at the hearing on the third amended complaint we are not alleging off label promotion we don't believe that there was promotion that would have triggered that everything else the district court said was beyond the scope of the leave to amend and the relator is made clear here repeatedly that they aren't challenging the limited scope of leave to amend that they were granted in addition not only do the facts show that there are the facts as pledge show that there was no requirement to file a p m a supplement but the p m i supplement regulation relates to f d a there is nothing that suggests any link between that regulation and c m s is separate determination as a separate agency about whether to pay for these devices when they are used for covered uses so for each of those reasons the intended use regulation is really a tangent in this appeal it's not something that has any impact on the ultimate conclusion that the court should reach the materiality point is also i think an important one to understand because the relator failed to identify any way in which there was any material falsity in the claims that were submitted the claim forms do not require fusion surgery the questions that are on the certificate of medical necessity don't ask anything about the region of the spine the n c b itself doesn't identify anything about the region of the spine that matters and that's important because c m s has bro discretion to cover uses beyond those that are the f d a has approved its regulatory analysis as safe and effective and in this case c m s did make a decision to cover a broader array of uses it when it made that national coverage terminations included within it its determination of what is reasonable and necessary i think relator is our conflating and cd and something called a coverage memorandum you can see an example of one in the supplemental excerpts of record at page thirty two and the coverage memorandum is where c m s spells out centrally its clinical analysis why it has chosen to set the scope of its n c t where it has and the later israel beef seems to be that they don't know what  considered and so they argue that c m s should have written an entity more narrowly should have looked for evidence that they can't find should have done something differently those are all policy arguments about what c m s should have done there's actually an administrative mechanism that someone can use if they want to ask c m s to reconsider the scope of an n c d and issue it in a narrower fashion but those are all far far afield from a false claims act case and they would also i think underscore the lack of cyan terror that a defendant would have in knowing that somehow they couldn't take an n c d and national coverage from a nation at its face value when they submit claims where everything on the face of the claim everything on the face of the certificate of medical necessity everything in the covers a particular device it doesn't mean that you can just use it for anything at all because it's always cabin by the requirement that it be necessary and safe and effective in my understanding it correctly that your response is that in this case because the use was squarely with than what's already covered as defined in limited by the and c that are the a built to be determination of safe in the society that's correct your honor and i think you can see if you look at the medicare program integrity manual section thirty point one point one which is found in the adenoma pages eighteen to nineteen it talks about national coverage terminations and says that they outlined the conditions for which an item is considered to be covered under the necessary and reasonable statutory section and it specifically says that a contractor when an n c p uses words such as only if or never and of course this and cd says these devices are covered only f are only for i think is the exact language th contractor has no discretion to deviate from the n c d and then again in that same section of the medicare program integrity manual it talks about not confusing national coverage determinations with coverage decision memoranda where c m s is analysis and clinical position is set out more thoroughly so when there is an n c d that squarely covers a particular use of a device and a claim is submitted for that use of the device there is simply nothing false there is nothing materially false and there is no science or on behalf of a manufacturer who submits a claim for these all noninvasive device opposing pats wired to the external power supply i'm reading the definition but that's the device that we're talking about here there is a general description at the beginning of n c d one fifty point two and that general description the language in that is the same language that has been used all along the relator suggest in a footnote to their on half way through their reply brief that somehow these devices aren't covered by that language that's the first time that we have heard an argument that these devices are not covered by this language and in fact their second amended complaint specifically made allegations about one fifty point two being the relevant and cd so i don't think there's any argument before this court that these devices are somehow outside the scope of of and c v one fifty point i'd just like to address escobar for one brief moment to say that escobar underscored that materiality is meant to be a demanding and rigorous standard that it is properly addressed in a motion to dismiss you can see that footnote six that materiality and so i enter must be strictly enforced in order to cabin the false claims act from really reaching out to conduct that it was not intended to be covered and that related have identified no material violation that was omitted in any way from the claims that were submitted in this case not the entire issue of safety and effectiveness can be determined within one fifty point two or whether as the medicare manuals actually state that you have to comply with the other applicable requirements safety and effectiveness being the main one the issue that we've been dealing with mostly here that we do not agree with the characterization of arc of our case by opposing counsel certainly the real issue that we're dealing with here is how do you assess materiality you have to go outside the one fifty point two and make it coherent with the safety and effectiveness requirement and in these circumstances again if you look at the section of the third amended complaint that deals with the specific devices we're talking about here they're not all two little pads that are connected that's that one fifty point two is a generic description of all noninvasive devices we're dealing here with two very specific devices which meet neither of the standards of safety and effectiveness of medicare but they do come within the terms of one fifty point two you agree to that well i mean i think the point that we were making in that footnote was that the the language of one fifty point two is and was intended to be a broad address addressing of the commerce their devices oh absolutely we're not debating that one fifty point two covers that noninvasive devices what we're debating is whether or not these devices the spinal pack in the spinal logic are safe and effective under medicare zones i think they are devices