AHA, others urge Supreme Court to reverse decision expanding FCA liability

The AHA, Federation of American Hospitals, and Association of American Medical Colleges yesterday asked the Supreme Court to reverse a federal appeals court decision that would permit opportunistic lawsuits that “shoehorn regulatory violations into [False Claims Act] liability." In a friend-of-the-court brief filed in Universal Health Services Inc. v. United States and Massachusetts ex rel. Julio Escobar and Carmen Correa, the organizations said "FCA liability should only attach when a defendant submits a claim that it knows is ineligible for payment because some expressly designated condition for payment of that claim has not been satisfied. And whether such a condition exists should be objectively and unambiguously ascertainable from the statute, regulation, or contract involved.” Under the “implied certification” theory advocated by lawyers for the “relator” who filed the case, the brief notes, “a defendant can be found to have ‘defrauded’ the government by committing a regulatory misstep never previously identified as disqualifying a claim for services provided to a patient…It lowers the bar as to what constitutes ‘fraud’ to include payment requests that contain no false information.”