The American Hospital Association and American Health Care Association are warning the U.S. Supreme Court that an upcoming case will determine whether the False Claims Act devolves into a bludgeoning instrument in disputes that have nothing to do with ripping off the government.
The case involves two whistle-blower lawsuits against subcontractors building guided-missile destroyers for the U.S. Navy. The 6th U.S. Circuit Court of Appeals decided that any fraudulent bill paid with federal money constitutes a violation of the law, regardless of whether a false claim was submitted to the government.
This is not just a minor linguistic distinction, the associations, along with the U.S. Chamber of Commerce, argued in a friend-of-the-court brief. Rather, the reasoning would extend the reach of the anti-fraud law into private transactions, the brief states. For example, when a hospital or nursing home pays an overcharging vendor with Medicare dollars received through the prospective payment system, a whistle-blower could drag the provider into a burdensome investigation and complex litigation for what would otherwise be a straightforward commercial matter.
The high court accepted the case in October but has not yet scheduled oral arguments. -- by Gregg Blesch