- In a decision that could increase providers’ False Claims Act (FCA) liability, the U.S. Supreme Court ruled 8-0 that a federal contractor’s Medicaid claims were illegal even though payment conditions were never explicitly stated, Courthouse News Service reported.
- The case, Universal Health Services (UHS) v. Escobar, hinged on the theory of implied false certification, which says government contractors may be liable for FCA violations if they fail to disclose noncompliance with relevant laws and regulations when filing a claim.
- Two-thirds of federal qui tam lawsuits last year involved healthcare businesses, according to Modern Healthcare.
The U.S. and Massachusetts sued UHS, claiming the company’s reimbursement claims for mental health services violated the FCA since it failed to comply with specific regulatory provisions. A district court dismissed the complaint, because the provisions didn’t relate to conditions of payment.
In March of last year, the First Circuit Court of Appeals overturned that decision on grounds that Massachusetts’ Medicaid regulations, which UHS allegedly violated, actually were conditions of payments.
In finding for the government, the Supreme Court held that implied false certification can be grounds for FCA liability if a business submitting a bill makes specific claims about its services but omits information about noncompliances.
“A defendant can have ‘actual knowledge’ that a condition is material even if the government does not expressly call it a condition of payment,” wrote Justice Clarence Thomas. “What matters is not the label that the government attaches to a requirement, but whether the defendant knowingly violated a requirement that he defendant knows is material to the government’s payment decision. Universal Health’s policy arguments are unavailing, and are amply addressed through strict enforcement of the FCA’s stringent materiality and scienter provisions.”