SCOTUS to take on implied certification liability under FCA


A blue door with two small holes in it.The U.S. Supreme Court will decide whether False Claims Act (FCA) cases may be brought by whistleblowers and the government under the theory known as “implied certification†and if so, under what circumstances.

Under this theory, when a provider submits a claim for government payment, it does so with the implication that it is being submitted in compliance with all statutes, regulations and contractual arrangements that govern the federal program being billed, (i.e. Medicare/Medicaid), even if that claimant has not expressly certified to compliance with these rules.

While the most common violation of the FCA is knowingly submitting a false claim for payment by a government agency, over the years enforcement agencies have used this theory of liability as a weapon to go after those believed to be in violation of the FCA.

In agreeing to hear Universal Health Services v. United States ex rel Escobar, the nation’s highest court will address two issues in particular: Whether implied certification is a viable theory of liability under the FCA, and, if it is, whether compliance with a contract term, regulation or statute must be an express condition of payment in order to establish that the claim is legally false.

The genesis of the case was the care of the relators’ teenage daughter by a mental health service provider. She died of a seizure while in the provider’s care in 2009. The relator alleged that she was treated by various unlicensed and unsupervised staff in violation of state regulations, thereby rendering the claims the provider submitted to Medicaid actionably false under both the federal and state False Claims Act.

Presently, federal courts are divided on implied certification. Earlier this year, the U.S. Court of Appeals for the Seventh Circuit rejected the theory in United States v. Sanford-Brown, Limited. However, numerous other circuits have all adopted the doctrine in some form, while the Fifth Circuit has not.

These different court rulings make it challenging for compliance officers to know under which theory of liability an FCA claim might be made. If the U.S. Supreme Court outright rejects implied certification, it could significantly reduce the number of FCA claims brought by whistleblowers and the government. However, the court also could limit its use or simply bring more clarity about when the act applies. Whatever the ruling, it could, at the very least, bring uniformity to the FCA arena and make it easier for providers to understand whether or not they are in violation of the FCA

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The Health Law Offices of Anthony C. Vitale

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