Reprinted with Permission from the Birmingham Medical News

The Supreme Court decided Universal Health Services v. U.S. ex rel. Escobar on June 16, 2016 in which it ruled the implied false certification theory, previously recognized in several circuits, can form the basis for False Claims Act ("FCA") liability. However, the Supreme Court put limits on the application of the theory.

The case arose out of care provided to a patient that allegedly led to her death. The Relators specifically alleged that Universal Health defrauded the Massachusetts Medicaid program by submitting claims for payment that by the nature of the claim made representations regarding the specific services provided by specific types of professionals, but that failed to disclose serious violations of Medicaid regulations pertaining the patient's treatment. The patient's parents filed qui tam lawsuits under the FCA alleging that, by submitting the type of claims for reimbursement, the healthcare provider had engaged in fraudulent billing by misrepresenting that it and its staff members were in compliance with the requisite legal health standards and were properly licensed and/or supervised as required by relevant law

Download the full article, "The Materiality Standard In False Claims Actions."