- The American Hospital Association and health insurance lobby AHIP filed a joint amicus brief on Tuesday to the U.S. Supreme Court in United States v. Supervalu Inc. v. Safeway Inc., arguing that the federal government’s “erroneous construction and expansion” of the False Claims Act would threaten “legitimate business activities of every government contractor, hospital, healthcare provider, health insurance provider, and grant recipient in the nation.”
- The False Claims Act has become a tool for federal prosecutors to crack down on healthcare fraud, especially schemes involving improper billing in federal health programs, and grants private citizens the ability to pursue alleged fraudsters on their own and file suits on behalf of the government. Settlements and judgments from the FCA exceeded $2 billion during the 2022 fiscal year, according to the Department of Justice.
- Of issue in the SCOTUS case is the FCA’s scienter element, or knowledge and nature of intent, involving legal liability when defendants file false claims. Lower court rulings have diverged on interpretation of intent, made more complex in a regulatory environment with “thousands of statutes,” according to the amicus brief.
The joint brief is a rare showing between two agencies that often represent dueling interests regarding federal health policy.
“While AHA and AHIP may not always share the same opinion on matters of litigation and policy, we agree that the current regulatory landscape and construction of the False Claims Act (FCA) creates an untenable situation for health care providers and health insurance providers,” the two groups said in a joint statement.
In the amicus brief, the parties argue that the SCOTUS case, rather than representing the majority of clear cut noncompliance cases with the FCA, represents alleged non-compliance involving ambiguous, “complex, overlapping, and even contradictory” regulatory requirements in Medicaid and Medicare programs that could harm defendants engaging in good faith compliance efforts.
“In these cases, even if a defendant’s conduct comports with an objectively reasonable construction of an ambiguous regulatory requirement, the defendant can still face FCA allegations and be exposed to punitive treble damages,” the amicus brief says.
“The type of FCA actions implicated here carries substantially less public benefit and substantially more risk for Medicare and Medicaid contractors,” the brief alleges.
Further, the agencies argue that healthcare entities face a complex regulatory landscape and that requiring those entities to ask for clarification on regulations to avoid FCA exposure would be a practical barrier to members of the AHA and AHIP.
Insurers, telemedicine companies and providers have been subject to False Claim Act allegations, particularly pandemic-related claims after the federal government funneled billions of dollars into the healthcare industry during the COVID-19 pandemic.
Last April, the DOJ announced that it had charged 21 people across the U.S. with pandemic-related healthcare fraud. In July, the department announced again that it had charged 36 people for fraudulent medical schemes totaling $1.2 billion.
The crackdown comes as the government aims to increase its oversight into federal healthcare programs. In January, the CMS announced that it would attempt to claw back billions of dollars potentially overbilled to Medicare Advantage programs.