Groups urge Supreme Court to reject FCA provider liability theory

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Professional associations are pushing for the Supreme Court to reject a “one-size-fits-all” liability theory under the False Claims Act when the court reviews the issue this year.

Two briefs filed last week by the American Hospital Association and the National Association of Criminal Defense Lawyers argue that the theory of implied certification goes beyond the scope of the False Claims Act and shouldn't be actionable.

The theory assumes that healthcare providers are compliant with federal regulations when they submit reimbursement claims, even if they did not expressly state that they were compliant. Under the theory a provider can be found in violation of the FCA if they didn't comply with a certain rule or regulation, even if that regulation isn't specifically a condition of reimbursement.

In its brief, filed along with the Federation of American Hospitals and the Association of American Medical Colleges, the AHA said the theory would make the FCA's damages and penalties provisions a “one-size-fits-all remedy for alleged non-compliance.”

“The FCA is too blunt an instrument to be used in this way,” the AHA brief reads. “[The theory] lowers the bar as to what constitutes ‘fraud' to include payment requests that contain no false information.”

The Supreme Court's review of the theory of implied certification is a critical one to watch for the healthcare industry, as it could help reduce litigation on murky FCA issues.