Before the Supreme Court is an effort by Universal Health Services (supported by various entities who regularly contract with the government) to severely limit the reach of the False Claims Act to deter, expose and hold government contractors liable for fraud. Universal has sought to eliminate liability where a provider fails to comply with state or federal regulations unless the provider explicitly states it is complying with those regulations when it requests payment from the government.
Currently, the False Claims Act allows whistleblowers and the government to recover for false statements and claims both when a false statement “expressly” requests payment from the government and where a contractor or private entity “impliedly” certifies that it has complied with the law or where the contractor provides something the government never intended to pay for. This allows the government to recover for services it didn’t ever intend to pay for, including under the circumstances in the Escobar case – where the government was billed for care provided by individuals who were unlicensed and unqualified.
The interpretation advanced by Universal Health Services and its allies would greatly limit the ability of the government and private whistleblowers to hold those who defraud the government accountable for their misconduct.
Senator Charles Grassley of Iowa, one of the staunchest supporters of the False Claims Act, filed an amicus brief with the Supreme Court opposing the defendant’s request to drastically limit the scope of the False Claims Act. Senator Grassley was the principal sponsor of the 1986 amendments to the False Claims Act and one of the biggest advocates for using the False Claims Act to deter and prevent fraud, or to recover taxpayer funds when fraud occurs.
Senator Grassley’s brief is available here and makes clear that Congress passing False Claims Act legislation intended a much broader and more flexible tool to fight fraud than Universal Health Services contends. Senator Grassley also explains that adopting the defendant’s cramped view of the False Claims Act would “severely hamper the Government’s ability to recover taxpayer funds lost to fraud.”
Justin T. Berger is a Partner at Cotchett, Pitre & McCarthy, LLP, where he handles high-profile cases of corporate fraud, including representing whistleblowers in qui tam actions under the federal and California False Claims Acts ...