Impact of a Recent Supreme Court Whistleblower Ruling
The outcomes of some potential, future False Claims Act (FCA) cases have likely been changed because of the June, 2016, Supreme Court decision concerning the qui tam case Universal Health Services Co. v. United States ex rel. Escobar.
The case background involves a young woman in Massachusetts who died after receiving inadequate and inappropriate care from a mental health provider that had contracted with Medicaid. After her death, it was learned that the persons involved in her care were both unqualified and unsupervised. The young woman’s parents filed a qui tam FCA suit against the corporation that owned the facility, alleging that the provider submitted false claims to receive federal money (that is, Medicaid funds) under the theory of implied certification.
The theory of implied certification holds that a person or legal entity can be held liable if they submit claims for payment from the government while deliberately violating a regulation or contract provision, even in the absence of any explicit certification of compliance. The fact that they are looking for payment from the government implies that the entity is certifying it is in compliance with all regulations and contract provisions.
Justice Clarence Thomas’s statement supported the theory of implied certification, but also imposed a standard of materiality, meaning that not disclosing any lack of compliance must be significant enough to be considered what Justice Thomas termed “misleading half-truths.”
FCA relators (those who bring qui tam cases) who are referencing the theory of implied certification may proceed if the following conditions are met:
- The claim must request payment from the government and also make “specific representations about the goods or services provided.”
- The defendant’s lack of disclosure regarding noncompliance is materially significant enough that it rises to the level of what Justice Thomas called “misleading half-truths.”
This decision is seen by many as a common sense solution when it comes to interpreting the law, and is considered a victory for whistleblowers and U.S. taxpayers, the latter of which foot the bill when fraudulent activity occurs. Extremely technical distinctions were rejected by the Court. Instead, the decision focused on this question: Was the government deceived into making payments to an entity that deliberately obscured its unlawful activity while it sought payments from the government? In this case, the Supreme Court found that Universal Health Services Co. had indeed done so.
The FCA’s qui tam whistleblower provisions play an ever-increasing role in the fight against fraud involving government programs and taxpayer money. It is because of FCA suits that the government has recovered over $40 billion in taxpayer funds, while paying whistleblowers more than $4 billion in awards. The fight against fraud, particularly health care fraud, received a boost from this decision.
Working diligently with whistleblowers to shed light on fraudulent practices.
If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.
Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning. The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.