“The group could be found liable for the enormous penalties available under the False Claims Act even though the services rendered were medically necessary and appropriate, and even though the group did not expressly certify, in so many words, that the claim did not result from a referral that violated the Stark Law,” Mr. Horton said.
Medical associations, including the American Medical Association and American Hospital Association have weighed in on the case in favor of Universal Health Services. In its brief, the AMA said there is a “sharp distinction” between statutory, regulatory, or contractual violations and false or fraudulent claims.
“Implied certification claims find no support in the statute and do not resemble claims Congress had in mind when enacting or amending the FCA,” according to the brief. “They deprive contractors of their constitutional rights to have notice that they are engaging in conduct subject to heightened sanctions.”
How might the Supreme Court rule?
During oral arguments on April 19, some justices appeared to indicate which way they are leaning, Mr. Kraus said.
Chief Justice John Roberts seemed concerned about the reach of the FCA under the implied certification theory. He raised questions about how people conducting business with the government would know about each and every regulation that could apply as a condition of payment.
Associate Justice Sonia Sotomayer and Associate Justice Elena Kagan appeared in favor of implied certification, while Associate Justice Samuel Alito Jr., Associate Justice Clarence Thomas, and Associate Justice Ruth Bader-Ginsberg did not display a strong opinion either way, Mr. Kraus said. Associate Justice Stephen Breyer appeared to be conflicted, asking for guidance from Roy T. Englert, an attorney for Universal Health Services.
“I’m asking for advice from you, from your point of view,” Justice Breyer said to Mr. Englert. “What the sentence in the opinion should say that describes the circumstances under which the person who submits a form saying, ‘I want a thousand dollars. I just supplied the guns or the medical care.’ ... When has that person committed fraud? – Or that’s what I want. What is the sentence you want me to write?”
Justices could rule a number of ways. They could uphold the appeals court decision, which would affirm a broad interpretation of implied certification theory. They could rule that the implied certification theory is valid, but it cannot be stretched as far as the appeals court expanded it. Justices could choose to reject the implied certification theory altogether and decide that the government must expressly identify every condition of payment in which a health provider is certifying compliance when they submit a claim, either on the claim form or by regulation. The high court could also split on the issue four to four, leaving intact the range of circuit court interpretations on implied certification across the country.
“There’s a very real question as to whether they’re going to be able to get a majority on any of those decisions because this is not an easy question,” Mr. Horton said. “The court has a pretty wide range of potential rulings available to it, but I don’t know what they’re going to be able to majority around, if they’re going to be able get a majority around any result at all.”
A decision in the case is expected by June.
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