SCOTUS to hear biggest False Claims Act case in more than 30 years
The Supreme Court this week will hear arguments in a case that will affect the number of fraud cases against providers.
The case, Universal Health Services v. United States ex. rel. Escobar, focuses on the validity of a legal theory now used to bring many False Claims Act cases against providers and others.
Under the theory of implied certification, whistleblowers often allege providers submit false claims to government programs by failing to follow certain regulations. Providers are sometimes held liable even if the government never explicitly stated that following a regulation was a condition of payment and even if the provider never explicitly vouched that it had complied with the regulation.
It’s the biggest False Claims Act case to be weighed by the Supreme Court in more than 30 years, said Peter B. Hutt II, a partner at Covington & Burling who represents providers in False Claims cases. Hutt said the case would be the “polestar” for any future decisions from circuit or district courts wrestling with how far the statute goes.
The American Hospital Association, the American Medical Association and the Pharmaceutical Research and Manufacturers of America are all urging the court not to allow implied certification because, they say, it’s not the same as fraud. But AARP and mental health and whistle-blower groups say the theory can protect patients from substandard care.
The petitioners in the case, for example, brought it after their daughter died at a Massachusetts mental health clinic. They alleged her caregivers were not properly supervised, and there were no board-certified or -eligible psychiatrists and no licensed psychologists at the facility, which violates state Medicaid regulations.
A decision in the case is expected by June. In recent years, the Supreme Court has often decided False Claims Act cases unanimously, or nearly unanimously, Hutt said.
Hutt says the case’s outcome will have farreaching consequences.