The Supreme Court Could Determine the Future of Fraud and Abuse Cases

October 19th, 2016

There are more than a dozen major healthcare organizations that have filed amicus briefs in the case of Universal Health Services v. United States ex rel. Escobar, including the American Hospital Association and the American Medical Association, which could greatly affect future fraud claims brought against healthcare organizations.

At issue is the validity of the current legal theory used to bring fraud and abuse cases against hospitals and other healthcare facilities and providers. Plaintiffs are asking the court to overturn a False Claims Act (FCA) decision that relies on a broad interpretation of “implied certification.”

The issue is whether the “implied certification” theory of legal falsity under the FCA is viable. It focuses on situations in which whistleblowers or others allege that a healthcare provider has submitted a false claim by failing to follow certain regulations. This is sometimes true even if it was never stated that following the regulations was a condition of payment.

In Universal Health Services, parents filed a lawsuit after their child died at a Massachusetts mental health clinic. Plaintiffs allege the clinic did not adequately supervise their child. The plaintiffs also claimed the clinic did not employ a licensed psychologist or a board-certified or eligible psychiatrist in violation of state Medicaid regulations. State prosecutors say the claim submitted by the mental health clinic is an FCA violation because the clinic employed unlicensed counselors in violation of the law.

To read more about the case, please visit: http://bit.ly/1TBeF19.

To read the AHA amicus brief, please visit: http://bit.ly/1Uc9yVj.

To read the AMA amicus brief, please visit: http://bit.ly/1WvVFjk.