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Seventh Circuit Declines to Adopt “Worthless Services” FCA Theory

First few Article Sentences

In a time of increased scrutiny by the federal government in weeding out and eliminating fraud in Medicare and Medicaid billing, most courts are still hesitant to find nursing homes liable for fraud solely on the basis of billing for poor care. In United States ex rel. Absher, et al. v. Momence Meadows Nursing Center, Inc., an Illinois nursing home was successful in appealing the jury’s verdict in favor of two former nurse relators on their federal False Claims Act (“FCA”) claims against a nursing home and its owner. In overturning the verdict, the Seventh Circuit rejected FCA liability based on the “worthless services” theory, and held that even if such a theory was viable, the relators would have had to show that the services were more than just substandard and non-compliant, but rather that they were truly or effectively not provided at all.

Shu, Pamela

Cohn, Jonathon

Arent Fox LLP

Law, Worthless Services

February 4, 2015

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