Dive Brief:
- The U.S. Supreme Court on Tuesday ruled that the statute of limitations for cases filed under the False Claims Act could only be extended during times of war in criminal cases, not for civil cases.
- The ruling will allow whistleblowers to file cases with the same allegations of previous cases, provided the case was not dismissed for reasons of merit—meaning that in some cases, it may be easier for whistleblowers to file fraud lawsuits over disputes that have already been brought to court.
- Although not a uniformly positive result for providers, the ruling is generally seen as a positive because the statute of limitations will not be extended for all fraud cases—although it does create some risk for providers, who may now have to spend time defending themselves in court on repeat issues.
Dive Insight:
American Hospital Association deputy general counsel Maureen Mudron told Modern Healthcare the ruling is "good news for hospitals and the fair administration of the law." She added in a statement, "The alternative would have resulted in efforts to revive decades-old stale civil claims, the majority of which would prove meritless, and impose significant unwarranted costs on healthcare providers."
Larry Freedman, a Mintz Levin attorney who defends providers in whistleblower cases, suggested that the ruling could result in "tactical gamesmanship" by whistleblowers, many of whom stand to profit handsomly from False Claims Act cases. (We reported last year on Louisiana internist William LaCorte, who has made $38 million in whistleblower payments after filing 12 False Claims lawsuits against healthcare firms.)
"This could impose a very serious burden on healthcare providers to defend in multiple actions," Freedman said.
David Chizewer, a Goldberg Kohn attorney who works with whistle-blowers, told Modern Healthcare that the bottom line of the decision is that it keeps earlier, weaker cases from barring the success of a newer, stronger case that is more likely to be successful.
The case (Kellog, Brown & Root Services v. United States ex. rel. Carter) was based on whether an employee could sue his company under the False Claims Act for allegedly billing the government for water testing services it did not conduct. A federal district court initially ruled the employee could not sue because the statute of limitations had passed and similar lawsuits has been filed, but the ruling was reversed by the U.S. Court of Appeals for the 4th Circuit in Virginia.