Top Court Situation Expands False Claims Act Liability

Top Court Situation Expands False Claims Act Liability

Review of Decision

On June 16, 2016, the U . s . States Top Court made the decision a situation that could have significant effect on healthcare providers. In Universal Health Services Corporation. v Escobar, a legal court expanded liability underneath the False Claims Act to incorporate situations in which a provider constitutes a claim for payment from the us government and also the provider’s representations in submitting claiming were misleading and would materially affect a repayment decision.

Court Approves Limited Use of Implied False Certification Theory

A Legal Court rejected the contention that, underneath the implied false certification theory, every claim assumes that payment is legally justified and it is in compliance with all of conditions of payment. However, a legal court ruled that False Claims Act liability can arise if your provider submits claims making specific representations concerning the services or goods provided but omits the breach of the material statutory, regulatory or contractual requirement. If individuals omissions would materially modify the government’s payment decision, the claim is recognized as false or fraudulent.

Details from the Situation

The situation involves a teenage beneficiary of Massachusetts State medicaid programs program who received counseling services in a mental health facility. The individual died after getting a bad response to medication which was prescribed to her in the facility after she was identified as having bpd. It had been later learned that a person’s specialist wasn’t a clinical physician and lacked authority to prescribe medication absent supervision. Her parents filed a qui tam suit, alleging Universal Health violated the False Claims Act by presenting fraudulent claims for payment since it unsuccessful to conform with relevant rules, particularly regarding credentialing providers of services.

Court Found Breach of False Claims Act

A Legal Court held that the claim could be considered impliedly false or fraudulent, despite the fact that there’s no express statement that’s false. Claims which on their own face are truthful, but lack information, could be actionable misrepresentations underneath the False Claims Act, which imposes significant penalties on anybody who knowingly misleads the federal government.

Justice Thomas, writing with respect to the unanimous court, ruled, “By submitting claims for payment using payment codes that match specific counseling services, Universal Health symbolized they provided individual therapy, family therapy, preventive medicine, counseling and other kinds of treatment …. [T]hese representations were clearly misleading in context.”

Not every misrepresentations caused by nondisclosure violate the False Claims Act — only individuals which are material towards the government’s payment decision. The government’s decision to specifically identify a provision like a condition of payment is pertinent but doesn’t instantly indicate the problem is material. Evidence of materiality may include evidence the defendant knows the federal government consistently will not pay claims according to non-compliance having a particular statutory, regulatory or contractual requirement.

Whether a misrepresentation is material depends upon the specific details of every situation, so a court might be reluctant to dismiss an incorrect Claims Act complaint using a motion. A Legal Court figured that a misrepresentation isn’t instantly material exclusively since it is an ailment of payment, nor does noncompliance by having an express condition of payment create a claimant instantly liable. Further, an omission could reasonably cause a person to infer the claimant is making additional claims which are untruthful.

Review increase Your Compliance Program

Violations from the False Claim Act can include civil penalties as much as $10,000 per claim in addition to treble damages. If you’re a doctor taking part in government healthcare programs, you need to review and, as necessary, revise your compliance programs to prevent breach from the False Claims Act underneath the implied false certification theory.

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