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False Claims Act/Qui Tam Litigation - "Implied Certification"

Implied False Certification Under the False Claims Act

On June 16, 2016, the U.S. Supreme Court, in United Health Services, Inc. v. United States ex rel. Escobar, held that False Claims Act liability can result from an implied false certification when the defendant submits a claim for payment that makes specific representations about the goods or services provided, but knowingly fails to disclose noncompliance with a statutory, regulatory, or contractual requirement if the omission makes the representations misleading.  In this case, the mental health facility had 23 employees who lacked licenses to provide mental health services, yet counseled patients and prescribed drugs without supervision, and the facility submitted claims without disclosing the serious violations of regulations pertaining to staff qualifications and licensing requirements for those services.  What other forms might such “misrepresentation by omission” or “actionable half-truth” take?  Good risk management and compliance planning suggest that providers consult counsel and look ahead to avoid trouble.

The full Supreme Court opinion can be found at https://www.supremecourt.gov/opinions/15pdf/15-7_a074.pdf

- Richard E. Davis



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