With so many fraud trends emerging over the last year, it’s easy to forget that there was an important Supreme Court decision that provided additional clarity to False Claims Act (FCA) liability.
In a unanimous decision, the Court ruled that the “implied certification” theory can be applied to FCA claims in “certain circumstances.” Justice Clarence Thomas clarified that the long-held theory can be the basis for liability, but added that FCA violations must focus on whether a defendant knowingly violated a requirement that is “material” to the government’s payment decision.
The case was closely watched by a number of states that argued for a broad interpretation of the implied certification theory, along with provider groups that said the legal theory “lowers the bar” for fraud. In the end, the decision appeased both sides to varying degrees by accepting implied certification as a legal avenue to bring FCA claims while also placing restrictions on it. Going forward, however, courts are likely to grapple with the definition of materiality.