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Supreme Court to Review FCA Liability Under Implied Certification

Posted in Fraud and Abuse, HIPAA and the HITECH Act, Home Healthcare, Hospitals and Institutions, Legislation and Public Policy, Life Sciences, Litigation, Medicare and Medicaid, Private Insurers, Reimbursement Matters, White Collar

In December, the U.S. Supreme Court agreed to review two cases to determine whether an implied certification of compliance can be used to support an allegation that a claim stemming from noncompliant performance is “false” under the False Claims Act (FCA). The cases are Triple Canopy, Inc. v. United States ex rel. Badr (No. 14-1440) and Universal Health Servs., Inc. v. United States ex rel. Escobar (No. 15-7).

The Supreme Court’s decision could have a substantial impact on government contractors, including healthcare providers, because under the implied certification theory a contractor can face FCA liability on the basis that it failed to comply with either a regulatory or contractual requirement with which it certified compliance at the time it submitted a claim for payment. The theory of implied certification can turn a breach of contract claim into a punitive FCA claim and result in liability, even if the submitted claim itself is not false. The Supreme Court will have to decide whether such expansive liability is beyond the bounds of the FCA.

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