Opinion ID: 4518720
Heading Depth: 2
Heading Rank: 2

Heading: Winter properly alleges material false or

Text: fraudulent statements The district court also held that Winter failed to allege any material false statements. We disagree. “[T]he term ‘material’ means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.” 31 U.S.C. § 3729(b)(4). “Under any understanding of the concept, materiality ‘looks to the effect on the likely or actual behavior of the recipient of the alleged misrepresentation.’” Escobar, 136 S. Ct. at 2002 (quoting 26 Samuel Williston & Richard A. Lord, 9 FCA claims must also be pleaded with particularity under Federal Rule of Civil Procedure 9(b). Cafasso, 637 F.3d at 1054. While a plaintiff need not “allege ‘all facts supporting each and every instance’ of billing submitted,” she must “provide enough detail ‘to give [defendants] notice of the particular misconduct which is alleged to constitute the fraud charged so that [they] can defend against the charge and not just deny that [they have] done anything wrong.’” Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993, 999 (9th Cir. 2010) (quoting United States ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d 1048, 1051–52 (9th Cir. 2001)). Winter’s detailed allegations clearly suffice to put Defendants on notice of their alleged false statements. WINTER V. GARDENS REGIONAL HOSP. & MED. CTR. 23 Williston on Contracts § 69:12 (4th ed. 2003)) (alteration omitted). No “single fact or occurrence” determines materiality—“the Government’s decision to expressly identify a provision as a condition of payment is relevant, but not automatically dispositive.” Id. at 2001, 2003 (citation omitted). For a false statement to be material, a plaintiff must plausibly allege that the statutory violations are “so central” to the claims that the government “would not have paid these claims had it known of these violations.” Id. at 2004; see also id. at 2003 (“[P]roof of materiality can include . . . evidence that the defendant knows that the Government consistently refuses to pay claims in the mine run of cases based on noncompliance with the particular statutory, regulatory, or contractual requirement.”). The district court analyzed whether failure to meet the InterQual criteria was material and concluded that it was not because “[t]here is no mention of the InterQual criteria in any of the relevant statutes or regulations.” This misreads the complaint. Winter does not allege that failure to satisfy the InterQual criteria made Defendants’ Medicare claims per se false—although, as discussed above, she claims that the InterQual criteria support her allegations because they reflect a medical consensus. Rather, she alleges that “[Defendants’] claims for payment . . . were false in that the services claimed for (inpatient hospital admissions) were not medically necessary and economical,” and that Defendants submitted “false certifications of . . . medical necessity.” We conclude that a false certification of medical necessity can be material. The medical necessity requirement is not an “insignificant regulatory or contractual violation[.]” Escobar, 136 S. Ct. at 2004. Congress prohibited payment for treatment “not reasonable and necessary for the diagnosis or treatment of illness or injury 24 WINTER V. GARDENS REGIONAL HOSP. & MED. CTR. or to improve the functioning of a malformed body member[.]” 42 U.S.C. § 1395y(a)(1)(A). And Medicare pays for inpatient hospitalization “only if . . . such services are required to be given on an inpatient basis for such individual’s medical treatment[.]” Id. § 1395f(a)(3) (emphasis added). In fact, Medicare regulations require all doctors to sign an acknowledgment that states, Medicare payment to hospitals is based in part on each patient’s principal and secondary diagnoses and the major procedures performed on the patient, as attested to by the patient’s attending physician by virtue of his or her signature in the medical record. Anyone who misrepresents, falsifies, or conceals essential information required for payment of Federal funds, may be subject to fine, imprisonment, or civil penalty under applicable Federal laws. 42 C.F.R. § 412.46(a)(2). In addition to highlighting the above Medicare statutes and regulations, Winter’s complaint alleges that the government “would not” have “paid” Defendants’ false claims “if the true facts were known.” In sum, Winter alleges that Defendants’ false certification of the medical necessity requirement is “so central” to the Medicare program that the government “would not have paid these claims had it known” that the inpatient hospitalizations were, in fact, unnecessary. Escobar, 136 S. Ct. at 2004. Thus, Winter has “sufficiently ple[d] materiality at this stage of the case.” Campie, 862 F.3d at 907. WINTER V. GARDENS REGIONAL HOSP. & MED. CTR. 25