[00:00:02] Speaker 00:
Case number 14-7060 at L. United States of America, X-Rail Michael L. Davis and Michael L. Davis, Appellant versus District of Columbia.

[00:00:11] Speaker 00:
Ms.

[00:00:11] Speaker 00:
Lord for the appellant, Ms.

[00:00:12] Speaker 00:
Anderson for the acquittal.

[00:00:53] Speaker 03:
Good morning.

[00:00:54] Speaker 03:
Good morning.

[00:00:55] Speaker 03:
May it please the court?

[00:00:56] Speaker 03:
My name is Sarah Lord, and I am here on behalf of Michael Davis.

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On appeal and on cross-appeal, this case presents two separate questions.

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On cross-appeal, the question is whether or not the District of Columbia violated the False Claims Act when it submitted a transportation cost report that was prepared by Maximus Inc.

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with false certifications that the claims contained in the report were supported by and could be verified by appropriate documentation.

[00:01:30] Speaker 01:
Does that documentation exist somewhere?

[00:01:33] Speaker 01:
Did it exist somewhere?

[00:01:35] Speaker 03:
Yes, it did.

[00:01:35] Speaker 03:
It did not, however, it was not in the possession of Maximus.

[00:01:42] Speaker 01:
It was with Mr. Davis, right?

[00:01:44] Speaker 01:
That is correct.

[00:01:44] Speaker 01:
Why was it with Mr. Davis?

[00:01:46] Speaker 03:
Because Mr. Davis had prepared the interim claims during the school year.

[00:01:51] Speaker 01:
But why wasn't it back with the District of Columbia Public Schools?

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In that case, the chronology becomes very helpful, Your Honor.

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Mr. Davis was informed in the fall of 1998 that his contract would not be renewed going forward.

[00:02:06] Speaker 03:
He was not, at the time, informed, according to the record, that he would not be preparing the cost report for the preceding year, nor was he informed that Maximus would be preparing the cost report.

[00:02:17] Speaker 01:
Okay, so once he does the report, why doesn't he then turn the documents over to

[00:02:21] Speaker 03:
Well, if I could complete the chronology, in May of 1999, Mr. Davis met with the District of Columbia officials and they discussed at that time the report that was being prepared and documentation that would be required and it was agreed that Mr. Davis would make kind of a progress report in September of 1999.

[00:02:47] Speaker 03:
One week after that meeting between Mr. Davis and the district officials, the district signed a separate contract with Maximus and for the first time contracted with Maximus to prepare the cost report.

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That information was not known to Mr. Davis.

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In June of 1999, several weeks later, Mr. Davis presented the cost report to the District of Columbia.

[00:03:13] Speaker 05:
June of 99?

[00:03:14] Speaker 03:
Yes, June 15, 1999, Your Honor.

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In August of 1999, there were two— At that time, did he turn over the records?

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No, Your Honor.

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At that time, there was no request for those records.

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He was preparing—he had prepared the report.

[00:03:30] Speaker 05:
So when was the end of the fiscal year, 98?

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At the end of the school year, it applied to the school year 97-98.

[00:03:36] Speaker 05:
So it would... Tell me when the end of fiscal 98 is.

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While the cost reports are based... What month?

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While the fiscal year typically would be October.

[00:03:48] Speaker 05:
So September 30th is the last month in the fiscal year?

[00:03:56] Speaker 03:
It's the last month in the fiscal year, yes, Your Honor.

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But it is not necessarily the last month in the school year.

[00:04:06] Speaker 05:
Well, I'm just trying to find, based on the statement that your client signed, he's acknowledged that he was the contractor for fiscal 98.

[00:04:21] Speaker 03:
That's correct, Your Honor.

[00:04:24] Speaker ?:
All right.

[00:04:25] Speaker 03:
Yes, he was.

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And as I was saying, in August of 1999, there were further meetings between Mr. Davis and the District of Columbia concerning the draft report that Mr. Davis had prepared.

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And it was at that time still Mr. Davis's understanding that his report would be the report that was provided.

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And in September of 1999, Mr. Davis sent a letter to the District of Columbia outlining certain items that still would be required for the completion of the report.

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At some point after that, and without that information being provided to Mr. Davis,

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the district instead submitted a cost report that was prepared by Maximus.

[00:05:14] Speaker 03:
Maximus prepared that report presumably between, well, after the contract was signed between Maximus and the district.

[00:05:24] Speaker 05:
Based on the fact... What is the record show?

[00:05:27] Speaker 03:
Well, the record does not specify when it was performed or when the work was actually done.

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The contract was signed in May of 1999.

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The contract had from Maximus an agreement that they would provide the district with the cost report in July of 1999, which is... I want to go back to your client's statement.

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He says...

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that over the course of the next several years, he's talking about 1995, Davis and Associates, acting on behalf of the DC public schools, did five things.

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And the last of those is maintained appropriate original claim documentation for audit purposes.

[00:06:18] Speaker 03:
That's correct, Judge.

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So back to Judge Griffith's question.

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You acknowledge that the documents exist?

[00:06:25] Speaker 05:
Yes.

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You acknowledge that your client was under contract with the District of Columbia according to his own statement, his own sworn statement, that he was maintaining appropriate original claim documentation for audit purposes?

[00:06:41] Speaker 03:
My client understood that he was... No, no.

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This is a sworn statement by your client in the record.

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Subsequently, it was determined that that contract was not valid, that it was void of an issue.

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That's a different issue.

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That was in his breach of contract claim.

[00:06:58] Speaker 03:
Correct.

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This is a false claims act.

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Yes.

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That we're talking about.

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And I need to be clear, and I thought that's what Judge Griffith was asking, according to your client's own statement,

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the documentation existed for audit purposes.

[00:07:16] Speaker 03:
It did exist, Your Honor.

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At no time, during the time... And at the time he was maintaining it, he was acting on behalf of the D.C.

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public schools.

[00:07:28] Speaker 03:
He was no longer acting on behalf of the D.C.

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public schools when the Maximus Cost Report was prepared.

[00:07:35] Speaker 05:
I understand that, but this is his sworn statement that was filed April 4, 2006.

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The False Claims Act is based on the time in 2000 when the Maximus Cost Report was submitted.

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I understand, counsel.

[00:07:51] Speaker 05:
But you're stuck with your counsel's sworn statement.

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That's all I'm trying to understand.

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If he has the documentation, and he's acting on behalf of the D.C.

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public schools, and you answered the question that Judge Griffith asked you, does the documentation exist?

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And at that time, he has it.

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And he has it because he's under this obligation.

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And he's just refusing, according to his own statement,

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to turn it over until he is paid for work done.

[00:08:26] Speaker 03:
That refusal was subsequent to the submission of the cost report.

[00:08:32] Speaker 05:
But this is his sworn statement.

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I'm trying to understand what kind of case this really is.

[00:08:38] Speaker 03:
It's the False Claims Act.

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was violated through the submission of the 2,000 Maximus prepared cost report.

[00:08:49] Speaker 01:
And so the question.

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OK, so your theory is not that when the claims were made for reimbursement, that somehow the transportation had not taken the students to medical centers.

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That's not your claim, right?

[00:09:05] Speaker 01:
No, you're right.

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Your claim is that when that was submitted,

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that the district itself was not in possession of documentation that showed that the kids were taken to medical care, right?

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Your claim is not, as I understand it, that there was no documentation supporting that reimbursement claim.

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It's just that the district didn't have it, right?

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That is correct.

[00:09:32] Speaker 01:
The district didn't have it, but Davis had it.

[00:09:34] Speaker 01:
Correct.

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And why didn't the district have it?

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That was my original question.

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and got the chronology and it was an excellent job.

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Why didn't the district have those documents?

[00:09:45] Speaker 03:
Because the preparer of the cost report had the documents, or should have.

[00:09:52] Speaker 01:
Why didn't he give them to the district?

[00:09:54] Speaker 03:
Because during the time period that the cost report was being prepared by Maximus, the district did not request the documents from him, and he believed that he was preparing the cost report for the district.

[00:10:06] Speaker 01:
So you think it's legally significant, for terms of the False Claims Act, that the documentation existed, it supported the claim for reimbursement,

[00:10:15] Speaker 01:
But the district didn't have it, but someone else had it.

[00:10:20] Speaker 01:
The district was in a spat with that someone else over those documents.

[00:10:24] Speaker 01:
And all that makes a legally significant difference under the false claims act?

[00:10:29] Speaker 03:
I just want to emphasize one thing.

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There was no spat over the possession of the documents and no request for the documents.

[00:10:37] Speaker 01:
So the district never asked for the documents?

[00:10:39] Speaker 03:
Until, as far as we can tell from the record, until approximately February 2002.

[00:10:45] Speaker 01:
What is the legal lease?

[00:10:47] Speaker 01:
Why is it legally significant that the district didn't possess the documents, but they existed and Mr. Davis had them?

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They knew what they were, right?

[00:10:55] Speaker 01:
The regulation that you're asking us to turn into a basis for a False Claims Act claim says that they've got to be available for audit purposes, right?

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If an auditor had showed up then to the district and said, give us your documentation, would the auditor have been able to find them?

[00:11:14] Speaker 01:
They would have gone down to Mr. Davis' office and found it.

[00:11:18] Speaker 01:
I'm having trouble seeing how this is anywhere near the homeland of a false claims act.

[00:11:25] Speaker 01:
That's what I'm struggling with.

[00:11:27] Speaker 03:
The false claims act is based on the fact that the report that was prepared and submitted reflected claims and a method of calculation for those claims that was not based on

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the documentation that would verify those claims.

[00:11:49] Speaker 05:
Let me give you an example.

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Let me just interrupt because your client took the position that the district had to have in its physical position, physical possession, encounter forms and progress notes.

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So here's my hypothetical.

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I give my accountant my canceled checks to prepare a financial report.

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There's a fire in his office.

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The checks are destroyed.

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But I have my monthly statements from the bank listing those checks and to whom they were paid.

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Now why couldn't the district be in a similar situation?

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It may not have the encounter forms, but it has other documentation that

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and that it reasonably believes is sufficient to support a claim.

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I just want to be clear about that.

[00:12:46] Speaker 03:
For the claims to be valid, it was necessary to demonstrate that on that given day that student received the medical services that qualified the student for the transportation services.

[00:13:01] Speaker 05:
So I paid the check and this monthly document shows it.

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that the district did not have in its possession a document comparable to the document that you are describing, Your Honor.

[00:13:15] Speaker 03:
If?

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If the district were able to demonstrate that on X days these students received these services, these medical services, and partook of the transportation services,

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that were qualified by those medical services, that could be an alternative method of proof.

[00:13:44] Speaker 03:
Let me ask you.

[00:13:44] Speaker 05:
Your client had made in fiscal 96 these documents available for audit, and he was under contract with the district for fiscal 98.

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Why would it have been grossly unreasonable for the district to assume

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He would make them available for the fiscal 98 year as well.

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After all, he only had the documents because of the contract.

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They were public school documents, not his documents.

[00:14:18] Speaker 03:
That is correct.

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But the district allowed a cost report to be prepared without reference to those service and counter forms.

[00:14:32] Speaker 05:
So that's what this case is about.

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I just need to be clear.

[00:14:35] Speaker 03:
And that is half of the aspect.

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The second aspect is the certification that attached to each of those claims, which was that the district, as evidenced in that cost report, could back up the claims that were referred to in the cost report through the documentation.

[00:14:56] Speaker 05:
I mean, the other thing.

[00:14:57] Speaker 03:
We don't know, Your Honor.

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But let me just be clear.

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You are not arguing.

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and it's out of this case, that the services were received and that there is no prejudice or loss to the United States, that the district never received from the United States more in reimbursement than it was entitled to.

[00:15:22] Speaker 05:
Those two issues are out of the case.

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So the only thing left in the case

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is, did the district violate the False Claims Act because you're arguing it didn't have physical possession of the encounter forms and the progress notes?

[00:15:43] Speaker 03:
It is not, in part, yes, but it is not clear that the claims that are reflected in the cost reports would have been

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claims that would have been made or were made in the cost report that Mr. Davis prepared based on those encounter forms.

[00:16:06] Speaker 05:
And why did they have to be identical?

[00:16:08] Speaker 03:
Because the service encounter forms define the eligibility for the transportation.

[00:16:15] Speaker 05:
No, but I mean my hypothetical with my checks.

[00:16:18] Speaker 03:
Well, the information did not otherwise exist.

[00:16:22] Speaker 05:
How did they get it so right then?

[00:16:27] Speaker 05:
Yes.

[00:16:28] Speaker 03:
Well, they didn't get it right.

[00:16:29] Speaker 05:
That's the transportation.

[00:16:31] Speaker 05:
That's all that's at issue here.

[00:16:32] Speaker 03:
Right, but they didn't get it right as to either one, and they're interrelated, because subsequently the district had to repay MAA, which then repaid CMS, based on the submission of the cost reports, and the defect in the cost reports was the absence of the supporting documentation.

[00:16:54] Speaker 02:
The regulations call for, as I understand it, regular periodic audit and true up.

[00:17:03] Speaker 02:
Correct, yes.

[00:17:05] Speaker 02:
And that's not specific to this jurisdiction or this year or anything like that.

[00:17:12] Speaker 02:
It's in the race.

[00:17:13] Speaker 02:
So it's contemplated there will be errors.

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There may be errors in the submission.

[00:17:19] Speaker 02:
The audit will turn those up, and then whoever is short will pay the other party at the end of it for the true, all right?

[00:17:25] Speaker 02:
Right.

[00:17:26] Speaker 02:
So does every error mean that there's a false claim?

[00:17:30] Speaker 03:
No, and we're not saying that here.

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But in order to conduct the audit that you spoke of, the documentation and the record for those claims must be available so that the claims can be verified.

[00:17:47] Speaker 02:
Well, available, not necessarily in the possession of the submitter.

[00:17:52] Speaker 03:
Well, it goes back to the issue of whether or not, because the real focal point in this case is the act of submitting the transportation cost report.

[00:18:05] Speaker 03:
And at that moment in time, Maximus did not have supporting documentation for the claims that it was making and did not have evidence.

[00:18:18] Speaker 02:
You're reading that.

[00:18:20] Speaker 02:
I'll just take your point.

[00:18:21] Speaker 02:
You're reading the relevant regulation as a condition of payment rather than a condition of participation in the program.

[00:18:31] Speaker 03:
Yes.

[00:18:32] Speaker 03:
We're saying that it is an implied, or it is a condition of payment, and it's material to the decision to pay on the claim.

[00:18:39] Speaker 02:
And where, which, specifically, which reg says that?

[00:18:44] Speaker 03:
There's no, it's not expressly stated, but... Or it implies that.

[00:18:48] Speaker 02:
It implies it, yes.

[00:18:50] Speaker 03:
Which one?

[00:18:50] Speaker 03:
The regulation, I'm sorry, I can't immediately cite the numbers, but... Is it the one that says providers must provide adequate cost data?

[00:18:59] Speaker 03:
Yes, but also in the second one, which itemizes the types of documents that are required.

[00:19:06] Speaker 03:
In that regulation, the court, or I'm sorry, the regulation specifies a range of documents and also indicates that it's not limited to those specific documents.

[00:19:18] Speaker 03:
And by analyzing the regulation in terms of the purpose that the regulation serves,

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In the context of this case, the service and counter forms are critical to the determination of whether to pay.

[00:19:31] Speaker 03:
There are any number of costs that get factored into a transportation cost, and some of those costs are costs like fuel costs, salaries, et cetera, maintenance for the buses and so on.

[00:19:45] Speaker 03:
But a key multiplier is the number of days that the students received the services for which they were transportation eligible.

[00:19:58] Speaker 03:
And that's what the service and counter forms document.

[00:20:01] Speaker 03:
Without those, if a student didn't receive the service on that day,

[00:20:06] Speaker 03:
then they didn't get the transportation service.

[00:20:09] Speaker 03:
And therefore, that claim would or should be backed out of the cost report when the settlement is finally adjusted.

[00:20:19] Speaker 03:
And because Maximus did not have those service and counter forms, there was no way that they could verify that the number of claims that they were claiming

[00:20:33] Speaker 03:
for transportation costs was in fact accurate and yet they submitted that cost report to the district or on behalf of the district for a reimbursement and they So I'm still looking at the right, is it the one that says adequate cost information must be obtained?

[00:20:52] Speaker 02:
Yes.

[00:20:53] Speaker 02:
Okay, let's do that.

[00:20:54] Speaker 02:
Must be obtained from the provider's records at DCPS.

[00:20:58] Speaker 02:
DCPS.

[00:20:59] Speaker 02:
To support payments for services furnished with non-fisheries.

[00:21:03] Speaker 02:
The requirement of adequacy of data implies that the data be accurate and in sufficient detail.

[00:21:08] Speaker 02:
That's basically it, right?

[00:21:10] Speaker 02:
Adequate cost information must be obtained.

[00:21:12] Speaker 02:
It's a passive voice.

[00:21:13] Speaker 02:
Must be obtained from whom?

[00:21:16] Speaker 02:
It doesn't say it must be maintained by the provider.

[00:21:20] Speaker 02:
It says obtained from the provider's records, presumably by someone else.

[00:21:25] Speaker 03:
Presumably by the preparer of the cost report.

[00:21:30] Speaker 02:
Well, I don't know.

[00:21:31] Speaker 02:
It's not entirely clear.

[00:21:32] Speaker 02:
It could be by MAA in this instance, couldn't it?

[00:21:35] Speaker 03:
I'm sorry, I'm not quite sure I'm following it.

[00:21:37] Speaker 03:
Are you saying that NAA could in turn request the documents from, say, the district?

[00:21:43] Speaker 03:
I'm not quite sure.

[00:21:45] Speaker 03:
Yes.

[00:21:46] Speaker 03:
I assume under the regulations that that is possible.

[00:21:50] Speaker 02:
Well, since it's in the passive voice, it's not entirely clear on its face.

[00:21:55] Speaker 02:
Right.

[00:21:56] Speaker 02:
And yet you want us to infer from that, that the maintenance, the possession of these records by the provider at the time of submission was a condition of payment.

[00:22:11] Speaker 02:
It just says that the information must be obtained from the provider's records.

[00:22:16] Speaker 02:
Well, the provider is also required to maintain the records under the district's Medicaid plan, and so the maintenance... Well, when it sends them out to its accounting firm, as it did each year, and when there's no difficulty and the records ultimately come back,

[00:22:34] Speaker 02:
It has not, I mean, it was not required to maintain them there, right?

[00:22:39] Speaker 02:
It was okay to send them out to the accountant.

[00:22:41] Speaker 02:
Correct.

[00:22:42] Speaker 03:
Correct.

[00:22:43] Speaker 03:
But again, we keep coming back to the fact that the cost report that was submitted did not, was not based upon the service encounter forms.

[00:22:56] Speaker 03:
And the certification that these claims contained in the cost report

[00:23:03] Speaker 03:
could be verified was not a certification that Maximus could make.

[00:23:09] Speaker 05:
Could I just ask, your client submitted his report?

[00:23:14] Speaker 03:
To the district.

[00:23:15] Speaker 05:
That's right.

[00:23:15] Speaker 03:
Yes.

[00:23:17] Speaker 05:
And he claimed he had the backup data for that.

[00:23:21] Speaker 03:
Correct.

[00:23:23] Speaker 03:
Although he also, in correspondence, indicated that there was additional information that would help to support the claim.

[00:23:33] Speaker 05:
But his sworn statement is he has the backup documentation.

[00:23:38] Speaker 05:
Yes.

[00:23:39] Speaker 05:
Yes.

[00:23:39] Speaker 05:
And he told the district when the district asked them how do they get the records, he said, I want to be paid for my work.

[00:23:46] Speaker 05:
Said it twice.

[00:23:47] Speaker 03:
Yes.

[00:23:48] Speaker 05:
So he claims he hasn't been paid.

[00:23:54] Speaker 05:
But he clearly understands that he was under contract with the district.

[00:23:59] Speaker 05:
And he has the very documents.

[00:24:02] Speaker 05:
that you're claiming the regulations require the district to have.

[00:24:06] Speaker 05:
So to the extent that the district was required to maintain the documents, they have been maintained.

[00:24:19] Speaker 03:
Again, the refusal to turn the documents over came subsequent by several years.

[00:24:25] Speaker 05:
So did the audit.

[00:24:26] Speaker 05:
That's what we're focusing on.

[00:24:27] Speaker 03:
To the audit.

[00:24:28] Speaker 03:
It came after the audit as well.

[00:24:30] Speaker 05:
So he loses his breach of contract claim, and he files this false claims act claim.

[00:24:39] Speaker 05:
And so we're trying to parse the language to show that there was a knowing violation.

[00:24:49] Speaker 05:
And I think you're stuck with your client's sworn statement, that he had the records.

[00:24:55] Speaker 05:
He simply wanted to be paid.

[00:24:58] Speaker 05:
He had them.

[00:24:59] Speaker 05:
He told the district he had them.

[00:25:02] Speaker 03:
But this discussion did not take place when that cost report was submitted.

[00:25:07] Speaker 05:
I'm talking about the sworn document your client filed in filing this case.

[00:25:14] Speaker 03:
Yes, Your Honor.

[00:25:15] Speaker 03:
But the dialogue that's described in that statement was subsequent by several years

[00:25:25] Speaker 05:
Doesn't matter.

[00:25:27] Speaker 05:
My point is he acknowledges he has the documents.

[00:25:31] Speaker 05:
And all he has, the district has to do is pay him for his work.

[00:25:35] Speaker 05:
It's not that he's claiming that there are no encounter forms.

[00:25:41] Speaker 05:
He has them.

[00:25:42] Speaker 03:
But then we come back to the fact that the claims that were in the cost report that was submitted by Maximus

[00:25:52] Speaker 03:
may or may not be claims that relate to his service documentation.

[00:25:58] Speaker 05:
But we're talking about a false claims act that they knowingly submitted and your client has a burden here.

[00:26:08] Speaker 05:
You say they may or may not.

[00:26:11] Speaker 05:
Has your client met his burden?

[00:26:13] Speaker 03:
Well, part of the problem is that the cost reports have never been discovered.

[00:26:20] Speaker 03:
Why not?

[00:26:22] Speaker 03:
Well, I don't know the answer to that, but... No, no, you do.

[00:26:25] Speaker 05:
Did you ask for them?

[00:26:26] Speaker 03:
Yes, repeatedly.

[00:26:27] Speaker 05:
And why weren't they turned over?

[00:26:29] Speaker 03:
The district was unable to locate them.

[00:26:32] Speaker 03:
Which cost reports?

[00:26:34] Speaker 03:
Both the medical services cost report and the transportation cost report.

[00:26:38] Speaker 05:
And so what did the district turn over in discovery?

[00:26:43] Speaker 03:
What ultimately was received as the cost reports were redacted

[00:26:49] Speaker 03:
cost reports from Burt Smith, who was the auditor.

[00:26:55] Speaker 05:
The independent auditor.

[00:26:56] Speaker 03:
Independent auditor.

[00:26:57] Speaker 03:
And so it is not the full and complete cost report.

[00:27:02] Speaker 05:
So it's not complete because it's redacted?

[00:27:04] Speaker 03:
It's redacted by about, I think somewhere in 50 to 70 pages are missing.

[00:27:12] Speaker 05:
The district has represented... Because they're redacted or it goes from page 1 to page 52?

[00:27:17] Speaker 05:
They're redacted.

[00:27:18] Speaker 02:
Out of how many pages?

[00:27:21] Speaker 03:
I believe it's in the appendix.

[00:27:24] Speaker 02:
Is this the list of 82,000?

[00:27:27] Speaker 03:
I believe that the cost report itself is supposed to be about 130 pages, and there are a big chunk of this.

[00:27:35] Speaker 02:
Let me ask you some questions.

[00:27:36] Speaker 02:
What should the district have done under these circumstances?

[00:27:39] Speaker 02:
The documentation that supports the claims, or would have supported some claims,

[00:27:45] Speaker 02:
is not in their possession.

[00:27:47] Speaker 02:
There's a dispute going on.

[00:27:49] Speaker 02:
They don't want to pay your client.

[00:27:51] Speaker 02:
Your client doesn't want to give them the documents while this dispute is going on.

[00:27:55] Speaker 02:
So what should the district have done?

[00:27:57] Speaker 03:
Well, again, the dispute was not ongoing at the time that Maximus prepared the report.

[00:28:04] Speaker 03:
The cost report that is not available, and in addition to

[00:28:10] Speaker 03:
seeking it in discovery from the district.

[00:28:13] Speaker 03:
My client also requested it from Maximus.

[00:28:17] Speaker 03:
And Maximus indicated that they, too, were unable to produce the complete cost reports.

[00:28:24] Speaker 03:
So the actual cost reports that Maximus submitted for the district have not been made available.

[00:28:35] Speaker 05:
But it had your client's cost report for $50 per 98.

[00:28:40] Speaker 03:
The district had that in their possession because he had provided it to them.

[00:28:44] Speaker 03:
But that's not the cost report that the district submitted.

[00:28:47] Speaker 05:
But the cost report is for fiscal 98 that your client submitted to the district under his contract, correct?

[00:28:54] Speaker 03:
Correct.

[00:28:55] Speaker 05:
So the district had that.

[00:28:56] Speaker 03:
Yes, but that's what they had.

[00:29:00] Speaker 03:
And the actual cost reports that Maximus prepared

[00:29:05] Speaker 03:
appear to have, well, do not appear to exist.

[00:29:19] Speaker 03:
There wasn't any particular reason not to continue the process that Mr. Davis believed or understood he was engaged in in 1999, which was the preparation and the submission of the cost reports, including the service and counter forms and other documents.

[00:29:39] Speaker 05:
Do we have discovery on that?

[00:29:42] Speaker 03:
On which point?

[00:29:43] Speaker 05:
We know that your client was charging a lot more than Maximus, all right?

[00:29:50] Speaker 05:
So that's one reason in the record that the district decided it was going to get somebody else for 99.

[00:29:57] Speaker 05:
But there's some other issues lurking here in the record as well.

[00:30:01] Speaker 05:
Do we have a full record on what the district's concern with your client was?

[00:30:10] Speaker 03:
I do not.

[00:30:11] Speaker 05:
I haven't seen it.

[00:30:12] Speaker 03:
Seen it.

[00:30:14] Speaker 03:
Based on my review, I have not seen it.

[00:30:16] Speaker 05:
All right, but they were honoring the contract with your client through fiscal 98, because as you keep telling me, these disputes arose later.

[00:30:32] Speaker 05:
And your client was maintaining appropriate original claim documentation for audit purposes.

[00:30:40] Speaker 03:
Yes.

[00:30:41] Speaker 05:
And so is your answer to Judge Ginsburg that the only choice the district had was to submit your client's false report?

[00:30:50] Speaker 03:
I wouldn't characterize the only choice that they had.

[00:30:52] Speaker 05:
What else do they have in your view to avoid a false claims act suit?

[00:30:57] Speaker 03:
I think the answer lies to some degree in what the Maximus Cost Report encompassed.

[00:31:04] Speaker 03:
In other words, the district did not or Maximus did not.

[00:31:08] Speaker 01:
So you think the Maximus Cost Report could have been adequate without using the documentation that Mr. Davis retained?

[00:31:14] Speaker 03:
I'm sorry, I missed the first part of it.

[00:31:16] Speaker 01:
So are you suggesting that the Maximus Report could have been adequate, could have avoided a false claims act by using some documentation other than the documentation that Mr. Davis retained?

[00:31:29] Speaker 03:
No, I'm saying, I'm sorry, that isn't what I meant to imply.

[00:31:32] Speaker 03:
What I meant to imply was that if there had been some degree of communications between the parties over the, and we're speaking highly speculatively here, but if Mr. Davis had been requested

[00:31:49] Speaker 03:
to provide information that Maximus knew or should have known was required.

[00:31:55] Speaker 01:
And that didn't take place.

[00:31:56] Speaker 01:
Let me make sure I understand.

[00:31:57] Speaker 01:
Your narrative is that the district discharges Mr. Davis, gets a new accountant who goes ahead and prepares a report

[00:32:09] Speaker 01:
with inadequate documentation and apparently insufficient effort made to get from Mr. Davis the adequate documentation.

[00:32:19] Speaker 03:
Is that the story that we're... That is, I believe, what happened.

[00:32:23] Speaker 05:
So your client meets his burden of proof, the summary judgment, by saying he has the records?

[00:32:31] Speaker 03:
He establishes that Maximus and the district did not have the appropriate documentation for the claims.

[00:32:43] Speaker 01:
He knows that because he did.

[00:32:45] Speaker 03:
Correct.

[00:32:46] Speaker 03:
And he knows that that information was not reflected.

[00:32:49] Speaker 01:
And they never asked him for it.

[00:32:52] Speaker 01:
They just pressed ahead.

[00:32:54] Speaker 01:
And that was unlawful.

[00:32:56] Speaker 01:
They pressed ahead and came up with a report seeking reimbursement without adequate representation.

[00:33:01] Speaker 01:
And that is a violation of the false printout.

[00:33:03] Speaker 03:
The chronology is particularly interesting because Mr. Davis met with the district to discuss the report on, I believe, May 18, 1999.

[00:33:17] Speaker 03:
Six days later, I think on May 24th, the district signed a contract with Maximus under which Maximus would prepare that same cost report.

[00:33:27] Speaker 05:
But the district had your client's cost report?

[00:33:30] Speaker 03:
Not until June.

[00:33:32] Speaker 05:
He didn't turn it over until June?

[00:33:34] Speaker 03:
June 15th.

[00:33:34] Speaker 05:
He submitted in... And so what did he submit in June, precisely?

[00:33:38] Speaker 03:
He submitted his initial draft of the cost report.

[00:33:44] Speaker 05:
And did he represent?

[00:33:46] Speaker 05:
that he had the backup material for that report?

[00:33:50] Speaker 03:
I do not recall whether he says that specifically in that letter or not.

[00:33:53] Speaker 05:
Well, did he or didn't he?

[00:33:55] Speaker 03:
I don't recall.

[00:33:56] Speaker 05:
Well, his sworn statement.

[00:33:58] Speaker 05:
His sworn statement.

[00:34:00] Speaker 03:
Oh, did he have the documentation?

[00:34:02] Speaker 03:
I'm sorry, I thought you meant did he say it in the letter.

[00:34:04] Speaker 03:
Yes, he had the documentation.

[00:34:06] Speaker 03:
I'm sorry.

[00:34:06] Speaker 05:
So the district had a report from your client in which your client has said he has the backup documentation.

[00:34:14] Speaker 05:
He has these encounter forms.

[00:34:16] Speaker 05:
Correct.

[00:34:16] Speaker 05:
His progress notes.

[00:34:17] Speaker 05:
Correct.

[00:34:18] Speaker 05:
So the district can take that, Maximus can use that, and move forward.

[00:34:26] Speaker 05:
I just want to find out what you think the district's options were.

[00:34:30] Speaker 03:
I think the district's obligation was... Options.

[00:34:35] Speaker 05:
I think that they... We're in False Claims Act territory now.

[00:34:39] Speaker 03:
I think that they...

[00:34:41] Speaker 03:
needed to have the appropriate documentation, the service documentation.

[00:34:46] Speaker 05:
Physically in their possession?

[00:34:48] Speaker 03:
Yeah, within their control or their custody.

[00:34:51] Speaker 05:
Well, your client had previously made these documents available to the auditor.

[00:34:55] Speaker 03:
That's correct.

[00:34:56] Speaker 03:
But they were never requested.

[00:34:58] Speaker 01:
Wouldn't your argument be more consistent with the factual, your factual version of events if you said not only did the district need to have

[00:35:10] Speaker 01:
them in their possession, but they actually had to use them, right?

[00:35:15] Speaker 01:
Isn't that your argument?

[00:35:15] Speaker 01:
Your argument is that Maximus didn't use them.

[00:35:18] Speaker 03:
Yes, Maximus's claims were not supported by the documentation.

[00:35:24] Speaker 05:
And how do we know that?

[00:35:26] Speaker 03:
Because they did not have the documentation, the service documentation.

[00:35:30] Speaker 05:
But they had your client's report that said he had the documentation.

[00:35:38] Speaker 03:
that report was a statement of the claims based on that documentation.

[00:35:45] Speaker 03:
I think that becomes a sort of... We're at summary judgment.

[00:35:48] Speaker 05:
That's what I can understand.

[00:35:50] Speaker 05:
I mean, you may prevail ultimately, but at summary judgment based on this one statement?

[00:35:58] Speaker 03:
It's a sort of a leapfrog argument to say that Mr. Davis's

[00:36:05] Speaker 03:
physical possession of the documents and submission of a report that was based on those documents permits a subsequent report writer to say that the claims in his or her report are

[00:36:27] Speaker 03:
valid and capable of being verified through documentation that is in that company's possession.

[00:36:38] Speaker 05:
Or available.

[00:36:40] Speaker 03:
Or available.

[00:36:41] Speaker 05:
And all they have to do is pay your client for the work he's done.

[00:36:46] Speaker 05:
Okay, let's hear from the district and we'll give you some time and rebuttal.

[00:36:56] Speaker 06:
May I please support Stacey Anderson on behalf of the district?

[00:37:00] Speaker 06:
Your Honors, I'd like to begin, first of all, with clarifying what's in the record regarding the Maximus Transportation Cost Report.

[00:37:06] Speaker 06:
That cost report is in the record.

[00:37:07] Speaker 06:
It begins at page 373 of the Joint Appendix.

[00:37:10] Speaker 06:
What has been redacted from the record is a roster of approximately 2,700 Medicaid-eligible students.

[00:37:17] Speaker 06:
And that redaction was made pursuant to protective order from the court.

[00:37:19] Speaker 06:
And that's reflected at page 389 of the Joint Appendix.

[00:37:24] Speaker 01:
What documentation did Maximus have when it put its report together?

[00:37:30] Speaker 01:
What did it rely on?

[00:37:31] Speaker 06:
Sure, it relied on two distinct classes of documentation.

[00:37:36] Speaker 06:
The first thing it had was the paid claims history of Mr. Davis's interim request for reimbursement.

[00:37:42] Speaker 06:
It had a list of those reimbursement requests, a total of 82,615.

[00:37:48] Speaker 06:
We know that those requests were supported

[00:37:50] Speaker 06:
by adequate documentation that the services were provided and that they were provided to Medicaid eligible students because Mr. Davis has conceded that his interim requests for relief are adequately supported by the record.

[00:38:02] Speaker 06:
So we have the roster.

[00:38:03] Speaker 01:
But Maximus had that when they put it together?

[00:38:05] Speaker 06:
Yes, Your Honor, and I would cite

[00:38:12] Speaker 06:
page 377 of the appendix as well as docket 107 and 107-1 for that to support that proposition.

[00:38:21] Speaker 06:
So they had that.

[00:38:21] Speaker 06:
I think it's actually reflected in the report.

[00:38:24] Speaker 06:
The second thing that they had was the cost information.

[00:38:27] Speaker 06:
This is a cost report.

[00:38:28] Speaker 06:
The district as a clinical provider is entitled to reimbursement at a rate of 100% of its actual costs of providing the transportation services.

[00:38:36] Speaker 06:
So at the end of the year, what they do is they produce this report that shows what those costs were.

[00:38:41] Speaker 06:
Those costs include things such as a table.

[00:38:42] Speaker 01:
But the key is to show that those costs were, that transportation was undertaken to get the students to medical care, right?

[00:38:49] Speaker 06:
Correct.

[00:38:50] Speaker 01:
And what documentation did Maximus have of that?

[00:38:52] Speaker 06:
Again, we had the paid claims history report.

[00:38:54] Speaker 06:
I see, that's where that came from.

[00:38:55] Speaker 06:
So we get the service information from Mr. Davis's claims that he sought on an interim basis.

[00:39:00] Speaker 01:
And how far off was Maximus?

[00:39:02] Speaker 01:
I mean, I asked- A lot.

[00:39:03] Speaker 01:
A lot, okay.

[00:39:04] Speaker 06:
When Burt Smith did the audit, they actually found that the district was entitled to reimbursement for over $199,000.

[00:39:10] Speaker 06:
So we underreported, is what we did, essentially.

[00:39:13] Speaker 05:
So it took the interim reports, the $82,000 claims.

[00:39:19] Speaker 05:
Yes.

[00:39:20] Speaker 05:
And it matched them to the cost report, which I saw on the record like a driver worked on a certain day.

[00:39:28] Speaker 05:
Correct.

[00:39:30] Speaker 06:
And then it did some multiplying?

[00:39:33] Speaker 06:
Yes, Your Honor.

[00:39:33] Speaker 06:
And again, because the district's entitled to reimbursement at 100%, it doesn't matter how many actual transportation services we provided.

[00:39:43] Speaker 06:
We are just required to report, again, the total cost.

[00:39:46] Speaker 06:
And that's what the cost report reflects.

[00:39:49] Speaker 05:
What else did you have?

[00:39:50] Speaker 05:
Did you want to just tell us?

[00:39:52] Speaker 06:
We had the roster of Medicaid eligible students as well, which is something that Mr. Davis indicated he actually lacked when he prepared his cost report.

[00:40:01] Speaker 06:
I think those are the three kind of categories of information that Maximus had.

[00:40:06] Speaker 06:
And it's a disposition that's all it needed to prepare that cost report.

[00:40:09] Speaker 06:
And again, to the extent it needed more information, additional information looks like it would have entitled the district to additional reimbursement.

[00:40:17] Speaker 05:
So let me just be clear.

[00:40:22] Speaker 05:
With these interim submissions, the district just says in the first quarter,

[00:40:32] Speaker 05:
I'm just trying to get the distinction in my mind between the documentation that is submitted as opposed to the interim claims that are submitted.

[00:40:41] Speaker 06:
Right.

[00:40:42] Speaker 06:
With the interim claims, it's my understanding, and again, it's not reflected in the record, but my general understanding is we do it on a monthly basis.

[00:40:49] Speaker 06:
Mr. Davis did it on a monthly basis.

[00:40:52] Speaker 06:
In general, the information that's conveyed is the name of the student, their Medicaid number, the service that was provided, the provider name, and the date on which the service was provided.

[00:41:00] Speaker 06:
So Mr. Davis compiles that information and submits it from records that have been provided to him by the district.

[00:41:06] Speaker 05:
So when there's all this testimony about encounter reports and progress notes, are they forwarded with the interim so far as the record indicates?

[00:41:18] Speaker 06:
Mr. Davis's claim is that they are.

[00:41:19] Speaker 06:
It's the district's position that we did not provide him with those documents, that we retain possession of them.

[00:41:25] Speaker 06:
We base that on

[00:41:27] Speaker 06:
Several pieces of evidence in the record.

[00:41:29] Speaker 06:
Mr. Davis is a contemporary contemporaneous 1999 letter in which he was reminding the district that in fact we were required to keep possession of the progress student notes in the individual students files.

[00:41:40] Speaker 06:
We have testimony from the auditors that they in fact reviewed those individual student files.

[00:41:44] Speaker 06:
And I noted in our reply brief as well that the district did challenge Burt Smith's audit on appeal and reported in that appeal that their review of the student-specific records indicated we had at least 90% of the progress notes and encounter forms necessary to support our Medicaid claims.

[00:42:02] Speaker 05:
So was all this in the record before the district court?

[00:42:04] Speaker 06:
Yes, Your Honor, it was.

[00:42:07] Speaker 05:
And so the discovery, it's over 700 pages.

[00:42:12] Speaker 06:
That was of cost information that the district provided.

[00:42:15] Speaker 06:
Again, going to the fuel and the payroll and the salary.

[00:42:17] Speaker 06:
So we did clearly have that still in our possession.

[00:42:20] Speaker 06:
We were able to produce that during discovery.

[00:42:23] Speaker 05:
And what was redacted was simply pursuant to the protective order?

[00:42:27] Speaker 06:
Yeah, pursuant to protective order.

[00:42:28] Speaker 06:
It was the roster of Medicaid eligible students, identifying information related to them.

[00:42:33] Speaker 06:
Again, that's reflected on page 389 of the joint appendix.

[00:42:36] Speaker 05:
So what is your understanding of what Mr. Davis claims he has when he says he maintained appropriate original claim documentation for audit purposes?

[00:42:50] Speaker 06:
I'm not sure what Mr. Davis has.

[00:42:52] Speaker 06:
So he's never identified what it is he has?

[00:42:55] Speaker 06:
No, Your Honor.

[00:42:56] Speaker 06:
I take it from his complaint.

[00:42:58] Speaker 06:
in his personal statement that he is claiming that he has provider records, for example, your therapist who takes progress notes during your therapy session.

[00:43:07] Speaker 06:
He would have all of those documents, all originals and all copies.

[00:43:10] Speaker 06:
Again, his claim is predicated upon the notion that the district had no records to support the individualized.

[00:43:18] Speaker 05:
Well, he started that way, but then the district said, no, we have some records.

[00:43:23] Speaker 05:
And as I understand it, he said, but you don't have the critical records you needed.

[00:43:27] Speaker 05:
Correct.

[00:43:29] Speaker 06:
Well, yes.

[00:43:30] Speaker 06:
I mean, those are my words, not his words.

[00:43:32] Speaker 05:
Right.

[00:43:32] Speaker 06:
He's now limited his claim to we lack the service-specific documentation necessary.

[00:43:37] Speaker 05:
The encounter forms and the progress notes.

[00:43:40] Speaker 06:
Right.

[00:43:40] Speaker 06:
That's what he's claiming.

[00:43:41] Speaker 06:
Yes.

[00:43:43] Speaker 06:
Again, and to make that clear, practically speaking, we're talking about medical records.

[00:43:48] Speaker 06:
We're talking about individual education plans related to the students, things that would normally be maintained by the medical provider or the school district as part of the student's educational file.

[00:44:03] Speaker 06:
So it is the district's position that Mr. Davis' claim does fail.

[00:44:08] Speaker 06:
both in the fact that the district did not make a false implied certification that it retained physical possession.

[00:44:14] Speaker 06:
Even if such physical possession was required in this case, I think the record is clear that it's not an express requirement.

[00:44:20] Speaker 06:
The regulations don't reference service material, nor do they make physical possession a condition of payment.

[00:44:27] Speaker 01:
Well, let's imagine the district presented a claim for reimbursement to Medicaid and said, now, here's our claim, but you know what, we don't have any documentation supporting this.

[00:44:38] Speaker 01:
I would agree, Your Honor.

[00:44:39] Speaker 01:
Is it imaginable that Medicaid would say, oh, here's your claim?

[00:44:43] Speaker 01:
Absolutely.

[00:44:43] Speaker 06:
And the point I want to make here is it's not that the documentation doesn't have to exist.

[00:44:47] Speaker 06:
I think the district is in agreement that for Medicaid reimbursement purposes, you do have to have the documentation.

[00:44:53] Speaker 06:
The issue here is that the district have to have physical possession of that documentation.

[00:44:57] Speaker 04:
Right.

[00:44:57] Speaker 04:
That's a different question.

[00:44:57] Speaker 06:
Yeah.

[00:44:58] Speaker 06:
So that's our point here.

[00:44:59] Speaker 06:
And that's Mr. Davis's claim.

[00:45:00] Speaker 06:
It's not that the district's certified that we'd be able to produce the documentation.

[00:45:04] Speaker 06:
It's that we falsely say.

[00:45:04] Speaker 01:
But you're not arguing, are you, that our precedent under SAIC is limited only to contractual terms, is it?

[00:45:13] Speaker 06:
I think, yes, I mean, I am, Your Honor.

[00:45:15] Speaker 06:
I think the court left that question open in SAIC.

[00:45:17] Speaker 06:
And I think other jurisdictions who have considered the issue in the context.

[00:45:20] Speaker 01:
Well, that's why I gave you the hypothetical.

[00:45:21] Speaker 01:
If you came to Medicaid with this claim, with this reimbursement claim, and said, you know, there's nothing in our contract that says we have to keep records.

[00:45:30] Speaker 01:
There are these regulations that say we need to keep records for audit.

[00:45:33] Speaker 01:
But we haven't done that.

[00:45:35] Speaker 01:
It's hard to imagine that Medicaid would say that's not a condition of payment, is it?

[00:45:39] Speaker 06:
And I apologize, Your Honor, I assumed your hypothetical was that they didn't, that we had never had them at all.

[00:45:45] Speaker 06:
I think if we had never had them at all, I think it would be a condition of payment.

[00:45:48] Speaker 01:
I see, I see.

[00:45:49] Speaker 06:
But the fact that we did have them, the question simply is whether or not possession.

[00:45:52] Speaker 01:
So it would then be a condition of payment, but you would satisfy the condition?

[00:45:56] Speaker 01:
Correct.

[00:45:56] Speaker 01:
Right, could I say that?

[00:45:57] Speaker 01:
Yes, Your Honor.

[00:45:58] Speaker 01:
Okay, thank you.

[00:45:58] Speaker 05:
So are we two ships passing in the night here, just so I can be clear on these records?

[00:46:04] Speaker 05:
Mr. Davis says he has the critical records.

[00:46:07] Speaker 05:
Maximus could not have had those records when it submitted the report and therefore there was a false claim.

[00:46:15] Speaker 05:
DC says we had the records we needed and there certainly was no knowing submission of a false claim.

[00:46:23] Speaker 06:
That's correct, Your Honor.

[00:46:23] Speaker 06:
I think that is an accurate statement of both parties' positions.

[00:46:27] Speaker 06:
I think I would point to the record evidence that would support the district on the notion that we did, in fact, have the records.

[00:46:32] Speaker 06:
Again, there was a two-year audit conducted by Burt Smith.

[00:46:36] Speaker 06:
At the end of the day, Burt Smith concluded, based on its review of the records, that the district was entitled to more than twice the federal financial participation it sought.

[00:46:45] Speaker 05:
But the claim is prior to that.

[00:46:48] Speaker 05:
In other words, when you submitted the report, did you have

[00:46:52] Speaker 05:
adequate records.

[00:46:54] Speaker 06:
I believe, Your Honor, I don't think that what we had didn't change over time.

[00:46:58] Speaker 06:
Mr. Davis's claims, he had them all.

[00:47:00] Speaker 06:
The district's claim is we possessed whatever we needed at the time we filed our reports and at the time of audit.

[00:47:06] Speaker 06:
At this point, you know.

[00:47:07] Speaker 05:
So the district did not need to have whatever it is Mr. Davis says he has.

[00:47:14] Speaker 06:
I think the record supports that the district did not need it because we either had it or it was not material to CMS's payment decision.

[00:47:22] Speaker 05:
So when there was testimony about in order to conduct an audit, you need to have these encounter forms and you need to have progress notes.

[00:47:33] Speaker 05:
Isn't that an indication that you did need those types of records?

[00:47:39] Speaker 06:
Generally speaking, yes.

[00:47:40] Speaker 06:
During the audit, they do review for those records.

[00:47:43] Speaker 06:
Again, I'm not talking about whether they exist, it's whether we had possession of them.

[00:47:47] Speaker 06:
And again, I think the record would support, you know, the first point of the analysis, whether or not the district falsely asserted possession.

[00:47:54] Speaker 06:
I think the evidence supports the district's view here today that we did in fact have possession of the necessary records during the audit process, looking at the testimony of the auditors, looking at the outcome of the audit, looking at the problems that were identified.

[00:48:08] Speaker 06:
Much of the issue with service documentation related to

[00:48:11] Speaker 06:
the medical service side, which the district court found to be barred by the statute of limitations.

[00:48:16] Speaker 06:
It's not an issue here.

[00:48:18] Speaker 06:
And so when you look at CMS's review, their focus is on that in terms of service documentation, not on the transportation cost report.

[00:48:29] Speaker 06:
So based on the record, the district views we have possession.

[00:48:32] Speaker 06:
If we didn't have possession, it wasn't material, and it wasn't a knowing lack of possession given the way the facts unfolded in this case.

[00:48:42] Speaker 06:
If the court would like to discuss the second issue regarding the number of claims that might be at issue here, I'm happy to discuss that.

[00:48:51] Speaker 06:
If not, we'd ask simply that the court reverse and enter judgment or direct a judgment favor.

[00:48:56] Speaker 06:
Thank you.

[00:49:00] Speaker 06:
Okay.

[00:49:00] Speaker 06:
Council forum.

[00:49:00] Speaker 06:
Appellant.

[00:49:05] Speaker 01:
Can I interrupt?

[00:49:07] Speaker 01:
Yes.

[00:49:07] Speaker 01:
So, correct me if I'm wrong.

[00:49:10] Speaker 01:
Have you made the argument

[00:49:13] Speaker 01:
before that the law, that the failure with the maximums report is that they didn't actually rely on the proper documentation?

[00:49:23] Speaker 01:
Have you made that argument before?

[00:49:24] Speaker 03:
In the lower court, we were not representing Mr. Davis, so I can't answer that directly.

[00:49:31] Speaker 03:
Yeah.

[00:49:33] Speaker 05:
But you know what the record said.

[00:49:35] Speaker 03:
Having reviewed the record, there appear to have been a series of moving targets as the arguments have.

[00:49:40] Speaker 03:
Yeah, I don't think you've made it before.

[00:49:41] Speaker 03:
That's my... I don't believe it has been made explicitly.

[00:49:47] Speaker 03:
With respect to that sort of factual question of who had what and who did not have what, the district's records related to the costs for the transportation.

[00:50:00] Speaker 03:
Mr. Davis possessed records that identified the students, their Medicaid ID number, what kind of services they received.

[00:50:09] Speaker 05:
But you're telling us this.

[00:50:11] Speaker 05:
He has yet to tell us this.

[00:50:13] Speaker 03:
On the record, that is correct.

[00:50:15] Speaker 05:
Yes.

[00:50:16] Speaker 05:
We don't know what he has.

[00:50:17] Speaker 03:
That is correct.

[00:50:18] Speaker 03:
But he has represented that he has the service encounter documentation in his filings and submissions.

[00:50:30] Speaker 03:
The district's reliance on the testimony of the witnesses does not support that the district had the service and counter forms.

[00:50:41] Speaker 03:
Either the witnesses were testifying to how the process should be conducted or they were not even directly involved with the process and did not have information about what was reviewed.

[00:50:53] Speaker 03:
And with respect to that.

[00:50:54] Speaker 05:
And so that's your argument.

[00:50:56] Speaker 05:
If they didn't have

[00:50:59] Speaker 05:
the service encounter forms, they could not submit a reimbursement request without violating the False Claims Act.

[00:51:15] Speaker 03:
That is correct.

[00:51:16] Speaker 03:
That verifies, it's a critical multiplier.

[00:51:21] Speaker 05:
It's my cancel check hypothetical.

[00:51:23] Speaker 03:
It's the critical multiplier.

[00:51:25] Speaker 05:
Okay, you don't have the cancel checks.

[00:51:27] Speaker 05:
But you have a monthly statement from the bank.

[00:51:32] Speaker 05:
The canceled checks are the best evidence.

[00:51:36] Speaker 05:
But you do have some other evidence.

[00:51:37] Speaker 03:
But your monthly statement is deficient in certain respects.

[00:51:42] Speaker 03:
What?

[00:51:42] Speaker 03:
Depending on what kind of bank you're talking about.

[00:51:45] Speaker 05:
But the auditor can call the bank and get the backup information if he needs it.

[00:51:52] Speaker 03:
But there's no evidence that the documentation, that there were multiple copies and alternative custodians of that record.

[00:51:59] Speaker 03:
The district said they had some.

[00:52:01] Speaker 05:
I mean, that's the thing about this case that's so mind-boggling to me.

[00:52:06] Speaker 05:
I mean, we don't know what your client has.

[00:52:08] Speaker 05:
We're not totally clear what the district had.

[00:52:13] Speaker 05:
And yet we're on summary judgment.

[00:52:16] Speaker 05:
That's the amazing thing to me.

[00:52:19] Speaker 05:
Anything further?

[00:52:20] Speaker 03:
solely that the Burt Smith audit was based on agreed upon procedures because of the lack of documentation.

[00:52:28] Speaker 03:
And then just as a final factual matter, the point that was made about the number of claims being 199,000 claims and that the Maximus report was for less, I do think it's worth pointing out that, in fact, Mr. Davis's cost report

[00:52:46] Speaker 03:
encompassed approximately 199,000 claims as well.

[00:52:50] Speaker 03:
There was a 900-claim difference.

[00:52:52] Speaker 03:
And so the report that is being held up for the Court is similar in many respects to the report that the District rejected from Mr. Davis, at least in the number of claims.

[00:53:05] Speaker 05:
So they should have retained him.

[00:53:08] Speaker 05:
Is that your argument?

[00:53:09] Speaker 05:
But that doesn't have anything to do with False Claims Act.

[00:53:12] Speaker 05:
This is what we're talking about now.

[00:53:13] Speaker 03:
No.

[00:53:14] Speaker 03:
But I'm talking about the cost report that he prepared and that was not used on behalf of this.

[00:53:20] Speaker 05:
But that goes against your argument.

[00:53:22] Speaker 03:
Pardon me?

[00:53:22] Speaker 05:
That goes against your argument.

[00:53:24] Speaker 05:
That's the question I asked earlier.

[00:53:25] Speaker 05:
They had your client's cost report.

[00:53:27] Speaker 03:
They had his cost report.

[00:53:29] Speaker 03:
Yeah.

[00:53:29] Speaker 03:
He submitted his cost report in June.

[00:53:32] Speaker 03:
Okay.

[00:53:32] Speaker 03:
So thank you.

[00:53:33] Speaker 05:
Thank you.

[00:53:33] Speaker 05:
We'll take the case under advisement.