Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
April 19, 2016 01:00 AM

Supreme Court takes up UHS case that could expand False Claims Act liability

Lisa Schencker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Several U.S. Supreme Court justices seemed skeptical of Universal Health Services' arguments Tuesday that providers should not be held liable for fraud for failing to comply with certain regulations.

    But the oral arguments shed little light on how the court may rule in the case, which has the potential to reduce or increase the number of False Claims Act suits brought against healthcare providers. A decision is expected by June.

    The case, Universal Health Services v. U.S. ex rel Escobar, centers on whether a legal theory known as “implied certification” may be used to bring False Claims Act cases against providers. Under that theory, providers can be held liable for submitting false claims to government programs for failing to follow certain regulations even if the government never explicitly stated that following the regulations was a condition of payment and even if the provider never explicitly vouched that it had complied with the regulations.

    The outcome of the case could affect a number of industries, but the biggest impact could be on healthcare players. In 2015, two-thirds of federal whistle-blower lawsuits targeted healthcare entities. Implied certification is the basis of many suits brought against providers, and the federal circuit courts are split on whether it should be allowed.

    Major healthcare groups such as the American Medical Association, the American Hospital Association and the Pharmaceutical Research and Manufacturers of America have all filed briefs in the case supporting Universal Health Services, an investor-owned hospital operator based in King of Prussia, Pa.

    The healthcare groups argue that imperfect compliance is not the same as fraud and that allowing implied certification could open the door to more meritless lawsuits.

    Whistle-blower groups and mental health advocates, however, say the legal theory can protect patients from substandard care. The petitioners in the case, for example, brought the lawsuit after their daughter died at a Massachusetts mental health clinic. They alleged her caregivers were not properly supervised and the facility lacked board-certified or -eligible psychiatrists and licensed psychologists, in violation of state Medicaid regulations.

    On Tuesday, Justices Elena Kagan and Sonia Sotomayor were sensitive to that argument.

    Sotomayor said it was difficult to accept that a provider could claim money for a service not rendered by a qualified, supervised individual as required by regulations.

    “I'm having a hard time understanding how you have not committed a fraud,” Sotomayor said.

    Kagan said it's the same type of fraud the False Claims Act was first meant to address when it became law during the Civil War, when contractors sold the government nonfunctioning guns, rancid food and boots that fell apart.

    “I would think that this is the exact same—that the contract was for a doctor's medical care, and a doctor's medical care was not provided,” Kagan said.

    Chief Justice John Roberts, however, seemed sympathetic to the providers' arguments that the False Claims Act is an inappropriately harsh tool for going after failure to comply with certain regulations. Roberts said he suspects many situations in which providers fail to comply are complex, “and that's where the difficulty comes in when you have hundreds of thousands of pages of regulations.”

    The justices' questions to lawyers on both sides Tuesday suggest they don't see this as a case with an easy answer, said Jessica Ellsworth, a partner at Hogan Lovells who filed a brief in the case on behalf of the American Hospital Association, the Federation of American Hospitals and the Association of American Medical Colleges.

    “This case really does raise fundamental questions about how issues of regulatory noncompliance should be dealt with,” Ellsworth said.

    Claire Prestel, an attorney with James & Hoffman who filed a brief in the case siding with the patient's family on behalf of the Service Employees International Union, Mental Health America and the Judge David L. Bazelon Center for Mental Health Law, agreed that Tuesday's arguments offered few clues about how the court will rule.

    Prestel disputed the suggestion that allowing implied certification would lead to a flood of lawsuits against providers based on technical violations. To be held liable, providers must have violated a rule knowingly and with knowledge that the violation would have been important to the government, she said. Also, a number of circuit courts have already upheld implied certification.

    “We don't have to speculate about what happens if implied certification claims are allowed because that's the world we've been living in,” Prestel said.

    But Larry Freedman, an attorney with Mintz Levin who defends providers in false claims cases, said he hopes the justices impose some boundaries on the government and whistle-blowers' ability to allege any regulatory violation is a False Claims Act violation. Otherwise, allowing implied certification triggers litigation that can be “very troublesome” for providers to resolve, Freedman said.

    Most False Claims Act cases are settled before going to trial, partly because of the severe consequences that can be imposed under the statute—up to $11,000 in penalties per false claim, plus triple damages.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Screen Shot 2023-02-01 at 4.02.50 PM.png
    Cancer Treatment Centers of America completes City of Hope rebrand
    rural-health1.png
    Transgender patients in rural states struggle to find doctors
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing