In a decision praised by the American Hospital Association, the U.S. Supreme Court has ruled that the False Claims Act cant be invoked just because a bill is paid with the governments money. Writing for a unanimous court, Justice Samuel Alito writes that a defendant must intend that the government itself pay the claim and that interpreting the law otherwise would threaten to transform the FCA into an all-purpose antifraud statute.
The case, known as Allison Engine, involved employees of a subcontractor building parts for U.S. Navy destroyers who alleged companies on the project sought payment from the shipyards for work that didnt conform to the contract. They argued they didnt need to show claims were submitted to the Navy, merely that public funds were used to pay them.
The AHA had argued the interpretation would allow vendors to take hospitals to federal court over routine contract disputes. The law should not have the reach of any action by any individual that ultimately results in payment by the federal government, said Tom Nickels, the AHAs senior vice president for federal relations. Alito writes that although the law doesnt require that literal claim was made to the government, its necessary that a false statement or record was intended to cause the government to pay the claim and would have a material effect on the governments decision to pay. -- by Gregg Blesch