anthony le croy for the appellant in may please the court or its moral hospital falsified and destroyed patient records to make it look like chest pain patients coming into the emergency department got to the emergency department later than they actually did one of the head nurses called this and i quote kind of cheating it was l m h is expressed purpose repeatedly expressed purpose in this indicates that there are several measures both on inpatient side in the outpatient side where anybody who for which a little an arrival time was reported was in fact reported as part of those programs one of the defendants witnesses has affidavit in the record michael williams he was an officer of the company stating that thousands of these were submitted desire record indicate the actual arrival time it does not do it by the very nature of the scheme which is to make sure there is no documentation of an earlier of event as a noted they both falsified records after the fact and ensure that there was no actual recording of the arrival time because during the abstraction process from the patient records l m h knew that if there was nothing else to look at that these later times had to be used as the arrival time so it was not the case that somebody shows up in the emergency room so this would time by definition cannot occur until the patient has arrived at the hospital and what ellen mage's reported is synonymous times which is physically impossible and it's only a result of making sure that previous documentation does not exist in the record showing that the so that when when the abstract was come look at the patient records there's nothing else there to show a different arrival time infer from that that they show up the emergency room say have a chest pain in their down to the e k g that's precisely what's supposed to happen and probably did in many instances it still cannot be accomplished in less than a minute it certainly can't be accomplished in a median of zero minutes you talk machine goes on but all of that is frankly your honor it's a clinical matter that does not go to the falsity at its core which is that l m h insured and had an actual scheme to make sure there were not additional records as there should have been there was an expert witness report dr jeremi why doesn't that bear on the materiality of the information that was your honor they're also fight under escobar right you're out of there are several categories of evidence that highlight the materiality in this case as escobar sets forth we do have statutory definition which is a natural tendency to influence or capability to influence the receipt of payment of property escobar equates that  th it's statement that the materiality looks to the effect on the likely or actual payment behavior you have a damage model that shows how much extra money they made by doing this we do your honor but the damages were not as we see it part of the district court's ruling and not part of this appeal the damages in this case as we set forth in a foot reply brief we put our expert reporting to the record of the damages and with respect to the medicare fraud are in the hundreds of thousands of dollars per year that's that's but that's considering lots of things probably like punitive damages and no you're out those that's like hard damages money paid out by the government that shouldn't have been paid out that's correct your honor let me be clear what we're talking about here the bargain at issue that c m s congress makes is providers give us this accurate and timely data and there's five or six different actual required elements and we'll give you an extra two percent of medicare dollars both on the inpatient side an outpatient side so we're not talking about the full amount of the payment for services that's a two percent at every turn so if there is a claim a medical claim for one hundred dollars only ninety eight dollars of those dollars ninety of those dollars we've been received irrespective of our claims two percent of that is what's at issue in addition to that the hospital value based purchasing program which was newer is only available spittles that did not receive a two percent qualified it for the district court when it appeared that the district court had erroneous lee equate it damages with materiality we did it is in the record but i want to be clear that  forth stands for the proposition numerous other cases including cases from this court materially can't be equated with damages it can't be equated with reliance or causation materiality looks to the likely or the actual effect on the recipient's payment behavior this court said is my client wired why are these material under these yes are these records material under that standard your there's a number of reasons your honor and i want to point specifically to one that i think is particularly telling in two thousand and thirteen l m h failed with one of these enumerated requirements to get this two percent it failed to issue a timely report of hospital acquired infection had missed that deadline by days that two percent was automatically a post that reduction is not something some distance decision maker had to sit on there were it's not a process by which there d are hearings if you miss the deadline you lose the two percent the we are talking about express conditions of payment both congress and c m s have set force that set forth that this quality data must be accurate there's even what's called data accuracy and completeness acknowledgement where the someone has to test from the hospital that in order to receive word that with a scope our statement about you know regulatory compliance acts are typically deemed to be material  breaches i think it is an example of staplers say there's a requirement staplers need to be made in the united states it's probably not material to payment in the objective sense a reasonable person would consider it serial with respect to the use of the word rigorous the reason the word escobar court speaks of a rigorous and demanding standard is because the parties in that case one came in and said if it's a condition of participation only it can't be material and the other came in and said if it's a condition of payment it must be material and escobar said that is to that is to bipolar that is not rigorous and as this court noted in the united states versus williams a criminal case handed down august materiality is a concept that in fact does not require evidence of what the recipient or did this court stated a false statement could be material regardless of its influence on the decision maker it can also be material even if the city had already arrived at the conclusion before the statement is bait scuse me the court also state as we have noted materiality analysis are identical for bank fraud indicates that the practice began shortly after a hospital value based purchasing was made public and made known to the hospital and those are in primarily in what are called weekly notes that we've cited throughout our opening does the record indicate what the timing was between rival in the e k g before this practice started does your honor we cite to a set of interactive tory responses where prior to the prior to the practice there were there were no zero median we're talking about a median time it was zero doherty e k g times there were i believe eleven quarter's in a row after this practice before it it varied between i think three in twelve minutes somewhere in that range or very nearly so there were some lower times but none of them were are there for that period of time before this protocol or other documents that in e mission i'm when they were admitted they do in mission is sort of a loaded term in medical documentation sometimes conflated with rival admission is strictly speaking a term when you're not in the emergency room but in the inpatient what about for the emergency room is there something comparable to admission except you in here the typical way that again these abstract as fine a time that's go please court i'm andy lester here on behalf of lawrence memorial hospital i'm accompanied by my colleague mark cole or it's memorial hospital is a nonprofit hospital in the university community and  as pretty much all of the cases since escobar have pointed out materiality matters post escobar we've seen court after court granted motions to dismiss motions for s and even reversed jury verdicts as your honour's mentioned the under the false claims act there is a way both of materiality requirement both of them are to be rigorous rigorously and strictly enforced i would like to talk briefly about the standard of review that standard of review  evidence that any medical records were destroyed no what exists or any evidence that there were altered registration documents no there is there is evidence that not every piece of paper was kept once that once the in the what's on a piece of paper was in put it into the system the piece of paper  was not necessarily kept walk me through this it just seems strange having visited hospitals from time to time at  there are a couple of ways that that happened the st is if the e k g was administered in a in the ambulance that would be a seer oh so you're out you're on the way to the hospital you arrive at the hospital the cage is already hooked up and that's that's not an insignificant number of situations and in lawrence in the ambulance services own by the hospital i don't believe so i believe in that's not hospital doing the e k g no but the k g is already being administered so what here's what happened is soon as somebody presented at the hospital and said chest and pain in the same sentence we stopped the registration at any registration process take them back immediately and hook them up to an e k g that as everybody agrees is good medical practice how do they get their name put on the record from the e k g they would put it on as soon as they had the ability once they're you know one of their either hooked up or so basically they're doing  and jane doe's would be us and that's exactly what it is i mean the st document that shows what shows a timestamp of anything's going to be that e k g that's what's put down and here again that's what  medically it's what's medically indicated that's what's for the good of the patients and that's undisputed in this record how does it occur with in patients i i i i i think it is again the same thing i mean when you know if somebody presents immediately i mean a probably not in patient but if somebody when somebody presents with chest pain the idea is to get them hooked up to the e k g to get to the point of making the diagnosis there is a and  immediately but i mean i don't believe i don't believe so they're the only evidence about what's going on of these protocols and zero time is the lawrence hospital  what happens in the industry or the hospitals that's my recollection yes this may be the same question but there's no evidence in the record of what representative times at other hospitals might be in comparison i don't recall that i don't recall that i can't why can't we in for at least leave that there's a fact question that the practice here influenced the decision or was likely to influence the decision of the government to pay these claims well there's no evidence to that to that effect though everything i guess of the evidence would be the fact that there's there is some rule that  materiality elite legal or factual question well it's both it's both i do think well and this is where i started to talk about the burden of proof the burden of proof of course we think of the burden of proof before we finish this subject know if they correspond in time and that suggests that there's a reason for them to do it and that is to get more money well i suppose one dollar could could jump to that conclusion but i don't think there's any evidence in the record to support that that's that's the conclusion one you don't think that would be supported by the proposition that there was a can that the protocol started at the very time when the h b b p program starred no i think that  i think one can come to all sorts of conclusions based on that but what you know here at look here was here was the entire point of st off is of course to get the patients diagnosed as quickly as possible  there's so much evidence in the record to show that this is not material i mean the government investigated this the government interviewed the relator the government went through all of this there is ample evidence that the government has looked at this and doing d about it yes there's evidence that c m s has a contractor the contractor reviewed at the evidences is very client actor who is charge with authorizing payment contractors  s to go do the investigation yes investigation on the basis of the claims of the relator and i'm talking about the employees at c m s that make the decision to pay and how much to pay make the decision to pay and how much to pay certainly and it's because i mean they have if nothing else they have the contractor that they have tasked with doing this job for them and the contractor and horded to him i'm sorry contractor who decides whether to pay and how much to pay for the contractor who performs the investigation when you say that i mean is that are you talking about something like an audit they have they hear that something might be going on or just as a matter of practice they want to make sure there's nothing going on and they send a contractor out to review what you're doing to see if there's a problem well there's that there's also the the affidavit of of of wayne it but they go out and they investigate on behalf of c m s allegations such as the ones made here allegations of fraud they look at it they know they produced the report they do that for c m s c m s reviews it and c m s did review it and what we know here and we know it's in the record is that c m s never changed its payment practices the united states never entered this case they had the opportunity to the united states attorney that that fact matters at all that the united states chose not to pursue the case themself there's certainly post escobar case law that indicates that and it indicates that because it's important to at some point if there if there is a bad practice the idea is to stop the bad practice and when the united states gets involved in the case that would be one pretty clear indication that this is a bad practice let me let me drill down on your investigator so the investigator you talk to in that you have an affidavit from that somebody who there's an allegation of fraud made about lawrence memorial hospital and presumably specifically this practice and the government dispatches this investigator to come out and look at it and see if there's any meat there and so this investigator comes looks says no problem and your materiality really does make the difference that yes that is correct it's not a matter of blessing it's a matter of ok are we going to do is changing the payment practice that's the inquiry for materiality so i guess and that presumably the government could disagree that what your client was doing was technically right but they say you know what it's not exactly right but we're going to go and pay him anyway it's immaterial it's immat right decision yet still going to pay him as it's close enough yes i mean according to escobar and it's at the very beginning of the case a defendant the issue is whether a defendant knowingly violates a requirement that the defendant knows is material to the government's payment decision and that doesn't exist in this case it was later his burden to present that evidence l m l m h continued the practice i believe it has yes and i may have misstated it i know he's the custodian of the records for for the contractor i'm not sure that he's the person who went out there he works for the contractor not question here's what i do know they have the burden to show materiality they didn't they don't present any evidence in fact that the government would have paid would have changed its payment decision based on what their allegations are it's their burden it's a rigorous strict heavy burden they didn't do it this is not an all purpose anti fraud statute materiality looks to what likely  actual behavior of the government is it's what the government would do not what it maybe could have done not maybe what it might do what it could have done and they didn't do it so earlier you were going to tell us about this you you wanted to tell us what the standard was for reviewing this and how it fit in and you didn't get your chance but i'd like to hear it if you would well it's and i think i may have gotten it out of ok sideways it is of course is we're on s have the typical summary judgment standard but it's also you have to look at materiality issue and that includes the definition of materiality which places that rigorous demanding strictly enforced burden on the pla it's not a two fact intensive type of bargain it's something that the plaintiffs could have presented evidence on but they did not does a fisher affidavit or the documents attached indicate that the odd it was generated is claims yes it does and it was anything else in the record as odd it or something comparable to an audit independent s gained actual knowledge language a supreme court use escobar of the false claims we have set forth here this company called n c i did not have a decision making authority at least there's nothing in the record purchaser but to all of the inpatient quality measures or arrival times is a data point how many other elements are there to the you know this these are a couple of metrics arrival time right what  something like that many of them are not the entire population of patients who fit a description go into the metric one example of that is am i eight any patient who was  patient eighteen of patient twenty where's the c m s is measuring the time it takes to reach certain milestones as the patient progress such it how many other of the metrics employed the arrival time the i don't have a involve arrival time and were reported by c m s certainly like to two of three employed arrival timers that two of twenty i think it's probably on the inpatient  one volume fourteen i counsel i think your time's expired we appreciate both counsel's willingness to engage on these issues will take the case will be submitted counsel or excuse will take a