American Journal of Law & Medicine

Supreme Court Reshapes the Landscape of False Claims Act Litigation

Supreme Court Reshapes the Landscape of False Claims Act Litigation - On June 16, 2016, the Supreme Court clarified the basis of False Claims Act (FCA) liability in a health care fraud case brought qui tarn by respondents. (1) The Court upheld the implied certification theory under which any statutory, regulatory, or contractual noncompliance can be a basis for liability, but also cabined liability by reading a "rigorous" materiality standard into the FCA. (2) Both plaintiffs' and defense lawyers have claimed the opinion as a victory. (3)

The case stemmed from the tragic death of Yarushka Rivera, who died after experiencing an adverse reaction to medication prescribed by a staff member at petitioner's mental health facility in Lawrence, Massachusetts. (4) Rivera's parents, the respondents, subsequently learned the facility had employed twenty-three unlicensed and unsupervised staff members, including two practitioners who had treated Yarushka. (5) Her parents learned the facility had submitted reimbursement claims to Massachusetts' Medicaid program using payment codes that corresponded to "individual therapy" and "group therapy" services and using National Provider Identification (NPI) numbers that the staff members had obtained from the federal government by misrepresenting themselves as properly licensed. (6) Massachusetts investigated the matter and found petitioner had violated the Commonwealth's Medicaid regulations multiple times. (7)

The FCA imposes liability on any defendant who "knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval. …

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