Supreme Court justices heard opening arguments from several attorneys on Tuesday regarding the validity of implied certification theory in False Claims Act litigation.
Universal Health Services, Inc. v. United States ex rel. Escobar aims to resolve whether a claim should be considered false if a provider does not adhere to "implied" program requirements. The case involves claims submitted by United Health Services for mental health services provided at a Lawrence, Massachusetts clinic that employed unlicensed and unsupervised counselors.
Chief Justice John Roberts challenged arguments made by the respondents and the Department of Justice that supported a broader approach to the implied certification theory. Concerned that there are "thousands of pages of regulations under Medicaid and Medicare programs," Roberts questioned whether those submitting claims to the government should be expected to know the particularities of every regulation.
Arguing on behalf of the relators, David Frederick noted that it doesn't take a "great leap of essentiality or materiality or intrinsicness" to expect mental health providers to have proper licensure.
Experts on both sides of the argument have said the Supreme Court ruling will have a far-reaching impact. Claire M. Sylvia, a partner with Phillips and Cohen, said a ruling in favor of Universal Health Services could "affect the ability of the government to hold healthcare providers, defense contractors and others accountable for taking taxpayer funds," echoing arguments made by states and organizations supporting a broad interpretation.
Alternatively, John T. Boese, an attorney with Fried, Frank, Harris, Shriver & Jacobson LLP, told Bloomberg BNA that he doesn't know "how anyone complies with the False Claims Act" if the Supreme Court rules in favor of the government. Provider groups have similarly pushed the Court to overturn the previous decision.