Following the Supreme Court’s decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), we expected significant False Claims Act litigation over the Act’s materiality standard. Such litigation is a direct consequence of Escobar’s holding, which does not limit the implied certification theory to violations of conditions of payment and emphasizes the Act’s “demanding” materiality standard.
Nothing sends chills through a Compliance Officer or General Counsel faster than receiving an agency subpoena or civil investigative demand (CID). The first questions that immediately come to mind are “what does it mean” and “what should I do?”
Effective August 1, 2016, the False Claims Act’s (FCA) civil penalty will double. As it currently stands, the FCA’s civil penalty ranges from $5,500 to $11,000 per violation. But as of August 1, the FCA’s civil penalty range will almost double to a minimum of $10,781 and a maximum of $21,563.
The increase is the result of an interim final rule issued yesterday by the Department of Justice. 81 Fed. Reg. 42491 (June 30, 2016). Although the increase was expected, it still reflects a dramatic increase in risk to those doing business with the federal government. Health care providers are uniquely at risk, because those entities are often sending thousands of claims to the federal government for reimbursement. When thousands of claims are at issue, the civil penalty can easily add up.
We previously reported on the viability of the “implied certification” theory of FCA liability based on oral argument before the Supreme Court in Universal Health Services, Inc. v. U.S. ex rel. Escobar. We concluded that the theory—under which a claim for payment can be false without an express certification, but because the government contractor has not complied with an applicable statute, regulation, or contractual provision—did not appear to be headed for extinction. It turns out we were right.
Yesterday’s argument before the Supreme Court in Universal Health Services, Inc. v. U.S. ex rel. Escobar had the potential to put false claims based on an “implied certification” in the crosshairs. Instead, based on the weight of questioning by a plurality of justices, it appears that some form of implied certification theory may survive. (We previously reported on this case, here.) Continue Reading
While we may be hard pressed to recall which ancient epic poem includes the tale of the Trojan Horse (it’s the Aeneid, in case you’re wondering, although it’s also referenced in the Iliad), we all know the lesson—if it seems too good to be true, it probably is. For recipients of Federal grants, there are lots of administrative hurdles but, once you get the money, it’s smooth sailing, right? Hold on a minute. Continue Reading
We previously reported on a D.C. Circuit case in which a three-judge panel held that when the government is silent, there is no False Claims Act (FCA) liability for a contractor’s “objectively reasonable” interpretation of an ambiguous contract provision. The government is now seeking a rehearing en banc (a rehearing by all of the D.C. Circuit judges) in the hopes of rolling back the panel’s ruling. Continue Reading
The Department of Health and Human Services’ (HHS) Center for Medicare and Medicaid Services (CMS), is set to publish a final rule that will provide some much needed relief to healthcare providers from the burdens of the so-called 60-Day Overpayment Rule. The final rule clarifies (1) the 60 day period for refunding overpayments is not triggered until both the fact and amount of an overpayment are known; (2) the standard for knowledge is not “actual knowledge,” but when the provider would have identified the overpayment had it exercised reasonable diligence; and (3) the manner in which the refund must be made. Continue Reading
The Department of Justice has issued its annual press release touting its False Claims Act recoveries from 2015. The government’s haul was substantial: just over $3.5 billion. This is the fourth consecutive year that recoveries were at or above this level, but represents a significant decline from the government’s record $6.1 billion total recovered in 2014. Continue Reading
Setting the stage for what may be a far-reaching interpretation of the False Claims Act (FCA), the Supreme Court of the United States granted certiorari to resolve a circuit split over whether “implied certification” is a viable theory of liability under the FCA. Universal Health Servs., Inc. v. United States ex rel. Escobar, No. 15-7. Unlike a typical false certification case—in which a person explicitly but falsely certifies compliance with a statute, regulation, or contract provision—an implied certification case does not require an express certification of compliance. Instead, it merely requires failure to comply with a statutory, regulatory or contractual requirement that is condition of payment. Continue Reading