am so excited to be before this particular panel because all three of your honors have written or participated in some of the most significant false claims act cases in this circuit and with all respect to judges keith and rogers in particular i am especially excited to be before judge mckeague because i wrote a special section in my brief directed toward your honor concerning the challenge you issued at the end of your dissent and pray the sure why you'd be happy to have me given my position prater well i like a good challenge i think all right and your honor said of some cases may warrant relaxing rule nine b s pleading standard an exception i'm not is that case this case seems to be even further away from either knowing or substantial likelihood of a false claim being filed on crafter was how'd i be interested in how you think this is a better case than pratt well the first question i'd like to address is this whole thing about to relax standard and i do want to talk about why i think that it needs either whatever you want to call the standard and i do think she has person that personal knowledge she never it she never makes reference to a single bill submitted by anybody on behalf of any particular patient as far as i can see i could see i can skip ahead a bit but there are couple of things where we you have to remember her job description involves completing all billing logs they talked about the fact that she did to scheduling and the minutes and they used if you look at these e mails between her and pam already they used the schedule and the billing interchangeably you know the foundation of the billing and we also have personal knowledge if you look at paragraphs one twenty one twenty nine of our complaint there's the spreadsheet that we also put in there that judge edmunds admitted was a fair recitation of the record where we talk about specific patients for example we look at one twenty eight where ms always says i am adjusting patient rago i mean that's a frank admission of up coding and it is personal knowledge of a scheme it's interesting because defense counsel used the analogy in their book where is the evidence even on that one that it's fraudulent me up all this all of this assumes that because your client thought a certain level of care was was appropriate and apparently the people in  there should be a higher level of services that therefore the some sort of fraud going on when you are sixty miles away and you doug haven't seen the patient and that decision is left to the interdisciplinary team that's actually assessing the patient upon admission and they decide i'm going to sign this patient a medium rug lovel and ms already says no you not supposed to do that you have to sign or hire rug level on admission because we have to consider revenue that's the essence of medicare fraud we're not talking about free hot dogs and gift cards it's only fraud i would think if if the record doesn't justify the higher level what i understood them to be saying so please correct this is that the home office said we want to start everybody on the highest level of care to see if we can fix whatever the problem is and get them off there get him off the roll means that a fair statement that's their argument but you know your client didn't like that wanted to start with a lower level of care which arguably would then take longer ride their argument is we want to start in high end and see what happens so why even though that doesn't hands revenue and that seems logical to me too why is that fraud fraudulent that's not what the treaters who are actually seeing the patient believe is medically necessary and besides that paragraph twenty nine and a smoking gun e mail that i call it she doesn't say i'm doing this on admission she's saying i'm taking all the patients she says i'm taking all the patients who are on medicare part a right now and i'm moving them all back to the highest rug level and that's not and on admission those are the people who are on existing caseload shoes he says i'm going to do this no so when we talk about this so called relaxed standard i think that that's actually a bit of a misnomer and i agree that it's a little bit misleading to suggest that will nine be has more than one standard a year there is one when you're pleading fraud a party must state with particularity the circumstances but not the evidence and judge keith wrote that in one thousand nine hundred eight then that michael's case that cited the rule does not mandate a presentation of facts and evidence in the complaint so we played those in this case we played the numerous communications from pamela ray we played with the scheme i want you to opcode patients and she basically said i want you to do it and when carla crock she said i did it with regard to a least patient jay and paragraph one twenty eight i put patient j on all try and then she said i will do it and i will keep doing it i will adjust the plan or to reflect ultra high levels on currently on caseload this is no longer negotiable interrupt your flow yes but where to insert my question that there's all this folks about twenty eight days and thirty days that's all related to the fact that there's these people only get nursing home coverage or whatever it is for thirty days then they go off and it's not like they're all expected to get better within the thirty days f misunderstanding my understanding of the scheme is they go out of the hospital they go to some other facility and they need physical therapy either need a high level or low level for the first thirty days after the thirty days they no longer get medicare coverage is that right i believe that that is the case jurado they either then aren't covered or they get coverage from somewhere else or their relatives pay for right and if and if if if  a facility wants to maximize the money they get from these people they got to do it during those thirty days i think you're right your honor and from an occupational therapist in point for misc rocke standpoint there's a lot of patients elderly they're not they're not they care not getting enough physical therapy to not to need it anymore within thirty days for the most part more physical therapy can be harmful to a patient who's able to understand right and i was part of her well the flip side of it is you're not going to keep doing therapy if there's not some therapy good reason to be doing so you're going to try it you're going to try to make them better and if you can't make them better you're not going to keep know the government is going to keep paying for what didn't have any positive impact is that a correct statement to believe so your honor and so the dispute here was the home office wanted to start him out higher and she wanted to start lower and so you say because starting a lot higher would generate higher revenues therefore that was fraudulent well she didn't want to she wanted to do whatever the interdisciplinary team did on admission which is where all the traders get together which was lower patient which was lower sometimes it was high she said to him she said this in our e mail sometimes these patients are correctly assessed at the high level fact that the emphasis is on revenue and patient care does simply saying that sumi it's true does that air go mean fraud and have you played it with particularities that's what we're trying to figure out well there's two answers to that your honor and one is that we've attach some of the articles in our a ten minute complaint that are in the record to talk about how up coding essentially is the essence of medicare fraud and it's it would basically be  there were also some instances where she said it you adjusted minutes of we face time with a patient we didn't actually spend those minutes in so up coding is not just something where we can infer in a light most favorable to the defendants that this is just ok that we're starting them out and then you're doing it because when carla crockett and her team tried to reduce it later pam all resistance said i want you to put them back on that high level because we have to consider revenue and here's where we get into that i do want to talk a little bit about the pleading standards i think the broader question is really what this case is about it's not a new standard this relaxed standard and it's didn't originate with prater judge case opinion in the michaels recognizes that there are different ways to plead fraud and depending on the circumstances and there might and that might be a better way to put it but we go back sixty years the u s supreme court said in conley versus gibson that a complaint shouldn't be dismissed unless it appears that may be so but let's look at how the cases have gone on to interpret that to you can't look at rule nine b in isolation roulade has to be considered all the cases so you look at will a with nine b which is that it shorten plain statement  sometimes in this is the main point that the particulars of the fraud are within the sole control of the defendant and that is certainly if somebody is fraudulent billing the government it might be done in secret so we allow fraud claims to nonetheless go forward if the information is only within the opposing parties knowledge michael's recognizes that michael cites rights versus miller's federal practice treatise which was written in one thousand nine hundred sixty nine and quoting from the treatise it says that that there's different ways to plead fraud i think that's my point we call it a relaxed standard but that standard is this is a fifty year old concept at least that just says that sometimes only the defendant has the knowledge and what i have to do is give you and false claim you have to put in enough to raise it to rise to the requisite quote strong inference that a fraudulent claim was submitted and caught in the basis for that in prater is the woman who was working basically in the billing department so even though she didn't send a bill out she was working in the billing department and trying to get all the bills out for either a certain time so now you have somebody that's no where near the billing department she's preparing something that gets submitted to a person not in the department she doesn't know what actually was billed one way or the other well her job description again says the you prepare all billing logs that's what she did that's what those were called the schedules in the minutes it i'm not let me just you know she want to put i mean it may as it may be true that she prefers the billing logs that get shipped to protest and they build them out without change that might be true but she doesn't even allege that she just says i prepared something it's some part of the process the beginning and therefore and i don't think it was right so therefore it's a false claim and i don't see how that survives any test even crazier which is the one that helps you the most potentially in this field there are many many scholarly articles written that this very active volcano doing is the essence of medicare fraud because you're not giving every profession what fraud is the analogy in law is billing billing our clients for example i as a senior partner counsel i think we understand your argument you've done it eloquently and now your time is up and i haven't heard anything about  retaliation where it seems like the pleading presents kind of move in your favor instead of against i can't it's been an active family haven't gotten to the retaliation yet but she says true that all those d back to the same thing because she's not alleging fraud if this scheme isn't fraudulent then i thought the retaliation claim is not a fraud claim so you don't have the strict requirements of pleading fraudulently to retaliate that's correct nine b doesn't apply to the retailer you didn't get a chance rather nine whether nine you know i addressed i'm sorry that i dressed your honest question i get a sense i didn't yes whether nine b applies or not the retaliation has to be in connection with something prohibited by the false claim act she might have a retaliation claim under some other statute but that's not what you're pleading here you're pleading an f c a claim so the retaliation hast has to show you have to show that she was retaliated because she was opposing fraud not just opposing something else so it still comes back to fraud whether there is a heightened pleading requirement to describe the fraud or not that's a separate question the come back to then up coding is fraud because if you are not seeing a patient and you change what is there puta cli regarded you're violating the hippocratic oath you're violating of the principle you do no harm let's cut to the chase you basically are saying that any time there is a suspicion of up coding that gives rise to a false claims act claim and retail ation claim if you end up getting fired along the way regardless of it and and it does not require you to show anything more then the presence of up coding that's the essence of your claim right if the court believes it can you answer that yes or no so i can go i to make sure you would answer the court's question could you please repeat it ron you seem to be coming down to the principle that if there is an up coding up coding is the essence of fraud so all you have to show is up coding you don't have to show that the up coded amount was ever build or or anything you just have to show up coding that you as you probably said that six times this morning right right so all i want to know is it have you found any case that says evidence of coding is enough showing why it was false and and the circuit defy the circumstances describe the circumstances in which the claim was submitted to the government that latter requirement is what was relax under prater if someone is familiar has personal knowledge of the claims submission practices not the sort of logging practices that that ms crock is familiar with but the claim submission that was working in billing if i remember right she was hired to to take care of a huge backlog of bills and get these bills sent out to the government so that's that's what she was doing this was person was not in billing so it  be true that it whatever she sent in got built we don't know that one or the other but that's seems like that's what distinguishes her ability to identify a false claim because she doesn't know what any of the bills actually look colleague is saying is look this is a woman that prepared the billing laws so therefore we assume that's what then became the bill and therefore we assume that it was sent to the government and therefore we assume in count two that they paid it and the rehabilitation clinic didn't pay it back there there are at least five inches of inferences that would have to be drawn to get from the planning that she's talking about to the submission of a false claim which is a scenic one on a false claims case and isn't it also true that in almost all these false claims act you have somebody you have a mole and you have somebody that you talk to that says well i'm in this case in the billing department and i know all we did is we took these bills and we and we saw them on there always has to be identified a specific false claim it's not just the nuff to say you know i i know i'm familiar with the claims and mission process you do have to still identify a specific false claim that was made you have to pray there you don't clog i'm sorry bring the fraud yes think about it this way now but to bring the retaliation claim do you have to do that for that you don't have to plead that one particular area and i do want to spend the majority minority a month and so i want to turn to that right after if i may make one more point think about on the on the particular requirement for claims this is a plaintive who is coming wanting to stand in the shoes of the government to assert a fraud claim on behalf of the government it we should be expecting the same particularities from her that you would expect from the government you would expect the government if they're going to bring far claim to know what the content was of the fraudulent statement that was made and to state that in the complaint we would never accept less than that from the government if they were bringing this claim and should not accept less than that from this from this rocket as far as a retaliation goes it what's your authority for saying that we expect a certain thing if it's from the government so therefore it should be expected from everybody else's or cases says that i don't have a case it says that but it makes sense to me that that's why you have these particularly requirements in the plush applied to the same use and now the exception is pretty we do all kinds of things that don't make sense very small when you say she didn't have to plead with particular a very firm to the fact she doesn't have to plead that she doesn't have to identify a specific false claim or or does she not even have to be specific as to what the fraud was she never let me put  it is a true or not that in the retaliation claim she has to be she has to show or at least plead it at some level that she was fired because she was complaining about fraud yes and the fraud is the violation of the federal false claims act not some other kind of for if she's not complaining against fraud then about fraud then it can't be said that the employer fired her because she was complaining about fraud so she was clearly complaining about a difference of opinion in her medical judgment or whatever she was compared to the person to compare two hours to her boss that be fair to say that's what she was doing she was complaining about professional patients and medicare b patients if you're talking about medicare patients and medicare be patients you're talking about patients who are whose whose treatment is being paid by the government you're obvious that true or not you're obviously going to be talking about those patients in the context of rug levels because that's that's where that's where the money's it's i mean it's designed for what we know we don't talk about a and b patients nobody why don't know why you're hedging on that it's obvious the question is does she say that that a and b were being fraud and i don't mean to be relating to a person does she say in her complaints that she says was the result of or being fired that she was complaining about the bills to aid to patients covered by a and b were being submitted fraudulently and this court already held are lar that when when you're talking about an interim report as a cause of the discharge the interim report itself has to confront the employer about fraud it has to allege fraud has to make a connection in the report between the the standard of care the complaining about and this resulting in fraud so would it be safe to say that question a case presents a question of whether complaining about a difference in in opinion the effect of which will increase revenue whether that's sufficient to be a complaint about fraud it is i'm sorry is that the question i ask you the answer isn't that the question that we have to doesn't this come down to whether when she complains about a difference of opinion about what services the these people were getting and that to follow what the supervisor says that will naturally lead to increased revenues is that enough to then say that was actually a complaint about fraud that is not quite the question so what is the question i don't believe she complained that that would was only being done to revenues that's not what she said in the email that meals are replete with references to we have to be attendant to revenues we understand revenues are important so secret about that right we're talking about let's let's focus on the smoking gun statement that page five of her reply brief that's that's what i'm thinking of at the moment i thought that was what you were referring to your honor and just as a clarification the statutory language doesn't say that her protected activity has to be complaining about fraud it says efforts to stop violations of the subchapters that a more accurate reading of the statute that applies but this floating is so you've got to say yeah you're reading from it and that that's what it says so i mean every time we've been saying complain about fraud we should have been saying efforts to stop violations which have to be fraud because right but you can you can you can stop something you can make an effort to stop something that hasn't happened yet can't you in ordinary language at least at the pleading stage so the idea there is that if i stop them from providing an improper standard of care then i am stopping them from there from submitting later submitting fraud and applicant were enough for retaliation claimed that every time you had a hospital and a dispute about the standard of care it would give rise to a retaliation claim he was fired after that i'm not i'm not i'm not sure that that's true that's not if there's if they're saying that what they're complaining about is the economic motivation for decision making which they want to stop some practice that's economically motivated rather than care motivated and then they're fired that that state's a claim you still have to prove it or you see you may get you thrown out on summary judgment but if the spear is to state a claim under the statute because it doesn't say complain about a specific action of fraud it's as efforts to stop violations congress amended it to include that it may be quietly so it can't just be about run has to be from the government and and complete was getting paid by the hour from bourse not from the government and so she has to draw a connection in her interim report that she's making between the complaint that she's making and a claim being made or overpayment being made from the government before she can assert that this is retaliation for trying to stop a false claim being submitted to the government we know there has to be a false claim for the for the false claim allegation in count one yours is asking you i don't think you're answering is can a read can the retaliation cause of action almost in compass attempted false claims violations another would stop something before it ever occurs to sure if that yes i would absolutely concede that if she sees a false in the future a false claim is going to be submitted as a result of this and brings that to attention of the employer and says this is going to result in an overpayment from the government if we go through with this and she gets fired that's retaliation absolutely but that's not what happened so you don't have to prove that a specific false claim did come within retaliation not because there's no mention of the government there's no mention of fraud there's no mention of a payment from the government the standard just to be clear is possibility under this standard is possibility and so what it would make a difference if in a particular business somebody actually does look at so for example billing logs and decide which are not going to result in bills and let me interrupt myself to sort of use the law firm example if that's helpful seems to me that you might have an associate in a law firm that is doing work for the government and they're padding their time but that doesn't mean that they're fair go there is a false claim the government because it goes through a process where presumably the senior partner or somebody is going to look at that and decide whether they actually are are not going to build that so in that case in my example it seems to me you need a little bit more to show that the padding one associate complaining about the new the other so shoes padding their hours right rose to the appropriate level but here we don't we don't know really one where the other what happens after these billing logs are sen if somebody said on information and belief that i know those nobody looks at those billing office they just pack them up and send them off to the government that might make a difference than if there is somebody screening these things in the home office to decide what is or is not billing she's not really talking a bill she's talking about plan her smoking gun email that she refers to says i will be adjusting the plan or not the billing logs after you've done the work the plan around what sort of treatment we're going to plan to provide and so that's why we're five steps removed at that point from ever submitting a false claim to the government we don't know as this district court said we're left wondering what kind of treatment that they actually provide to provide the very the this there's this distinction that gets lost in the discussion so it did but does that all get watched out simply because we're using the plausibility standard of the law in connection with the retaliation cl not sure how to answer that because i'm not sure what it means to say that it's washed out your honor but but but i would agree that you don't have to be the whole dozen of civic it means that what you have to with the heightened stuff you have to apply for the false claims act claim doesn't apply to the fos act retaliation claim i would agree as the court said mckinsey all the internal report has to do is sufficiently allege that there is fraud or will be fraud against the government and that didn't happen here one last question if it didn't happen then that means the false claim act is not available to pursue this claim doesn't that then mean the michigan public policy claim is available because judge thought thought thought it was all or nothing but the reason the michigan public policy claim isn't available is because there is this other claim that is available it is not really available because you didn't sufficiently allege fraud or whatever it is then why wouldn't you still be able to go ahead if he wants to exercise supplemental jurisdiction on the public policy claim well he wouldn't have jurisdiction at the point because there would be no federal claims for one thing and secondly you absolutely have jurisdiction and tell you declined to exercise it now failing to then return the supplemental jurisdiction claim to the state courts might be an abuse of discretion but that's something that's not before us we don't know i see your point if he's already exercise if he had already x is an exercise of it's already been invoked and once it's been invoked which it was by in this case then and tell somebody asked some moves that he not pursue it he's got at it it seems like he said it seems like he declined to exercise supplemental jurisdiction for the wrong reason if you right that there isn't a false claims retaliation claim here i don't think that i think once you have a retaliation claim under which you can bring your your your case as a statutory one the public policy claim falls away but  false claims act pretty elevation claim here because she has doesn't have any evidence of fraud she she's failed to satisfy the pleading standard and i guess the point still once you plead something even if it is dead wrong you then forfeited your michigan public policy claim that that doesn't sound very likely i think there's a because there's a statutory false claim retaliation claim available for these sorts of circumstances you can't bring the pop up categorically it's not a case by case basis right that's what i'm saying there's a scheme here they haven't met the elements of the scheme but because there's a scheme this other scheme just categorically doesn't apply right right it's left not adopting that but i think that's the nature by this sort of like preemption law that occupies the field so we got it ok they i think i found your owners were looking for so medicare will not pay for services that are quote not reasonable and necessary for the diagnosis of treatment of illness or injury that's forty t paper in this case but considering we didn't even get to discovery it sure is a lot of paper but that's the basis of when i say up coding is fraud that's the basis of it it has to be reasonable and necessary for the treatment of illness or injury in for example if you are sixty miles away and you're overruling what the treatment team thinks is reasonable and necessary on admission especially when you have such a short term admission then you are violating the law or at least in good faith believe that it's got to the jail you've got a ph you've got a doctor that p a thinks the level of treatment is x and the doctor then says no it's go why at a higher level that's all we know you would describe that as up coding because as a difference of opinion medical opinion about the level of services and they're picking the higher one so therefore you can submit a false claims act claim because because you because you can plausibly allege opcode different situation than we have here carla was the manager there why it's a hypothetical i don't i  would have trouble with that one even but you're not even rejecting that one categorically and well i would reject a category three how about that ok so all up coding then is not covered by ipso facto covered by the false claims what  you want to do here and let's go back to the origin you're trying to allege that this is something worth looking into the federal government can only take about ten percent of these cases so the false claims act allows people to be private attorneys general to be able to explore this if you have a good faith claim and if you are able to allege something and identify a specific patient which we believe we've done take the bar syndrome patient for example  the mbo are reasonably in medically necessary carla crockett said here's why this is wrong for this patient is there any allegation in the original or first amendment complaint that the th examples of up coding were actually billed to the government that's why we call it a smoking gun because a smoking gun doesn't show you that a gun was fired right if you don't have a video which we never we never quite done that well i turned the whole concept of plausibility head and look even before we spent out of control or could you tell me why you can't answer my question yes or no it's very simple one is there anything in the amended complaint that says that will call it up france and that goes back to the whole when we talk about that standard the second circuit just came up with a case and i do want to bring it to the panel's attention because it's a very new case it's called churches c h o r c h e s was july twenty seventh and i try to get out of court at site and they actually do a really nice job of looking at how all the circuits have looked at the false claims act pleading  third fifth seventh ninth and tenth and the d c circuits all have permitted pleading where you don't necessarily have to identify straw false claims specifically that was submitted to the government as long as you meet ninety's pleading standards of being able to support a strong inference of a false of a false claim you know off the top of your head where in your complaint you allege that there is a strong inference that these were actually  thank you thank you we appreciate your argument ok still be submitted thank you it was always