The Supreme Court has granted certiorari in the case of U.S. ex rel. Escobar v. Universal Health Services, Inc. The case could have important implications for the implied certification theory of liability under the False Claims Act.

The specific case revolves around inadequate treatment of a patient by unlicensed or unsupervised personnel. The lawsuit contends that this violated state regulations for the operation of the facility and the resulting claims for reimbursement were in violation of the False Claims Act. The District Court disagreed and dismissed the lawsuit.

The First Circuit examined its past precedent and the specific statutes at issue and reversed the lower court decision. Through their petition for appeal, the Defendant has set the case up to decide the standards, if any, for a false claim under the implied certification theory. Their brief contrasts the Second and Seventh Circuit (where implied certification is not favored) against the First, Fourth and D.C. Circuits (which have expressly or impliedly allowed it).

The alternative to an implied certification is an express certification of a condition of payment. An example of this type of false claim is a health care provider that is violating the Anti-Kickback Statute while expressly certifying to the U.S. Government that it has not violated the specific law with regard to the claims it is submitting to the government for reimbursement. This has been described by some courts as a factually false claim.

The Supreme Court also has another petition pending related to the validity of the implied certification theory of liability in U.S. ex rel. Badr v. Triple Canopy, Inc. Triple Canopy was a Fourth Circuit case where the relator alleged that the government contractor was billing for employees to serve security even though they weren’t qualified to operate firearms according to Army standards. The petition for this case remains pending before the Supreme Court and it is currently unknown whether the Justices will hear both cases or ask the lower courts to re-examine the case in light of its answer in Universal Health.

The Supreme Court has seen a steady flow of whistleblower cases over the past few years. Earlier this year, the Supreme Court decided issues in a False Claims Act related to the first to file doctrine and the statute of limitations in the case of U.S. ex rel. Carter v. KBR. Last year, the Supreme Court clarified whistleblower protections under the Sarbanes-Oxley Act of 2002 (SOX) when it held that the employees of private contractors and subcontractors of public companies were protected from retaliation if they were blowing the whistle on a public company.

If you have questions about how these cases implicate the False Claims Act or wish to speak to a False Claims Act attorney about evidence of corporate wrongdoing, please call 1-800-590-4116 or fill out our contact form.

Photo Credit.