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Supreme Court Will Soon Decide Scope of False Claims Act

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“Implicit Certification” at Issue Before the High Court

On April 19, 2016, the United States Supreme Court heard oral arguments in a case that should determine the extent to which the False Claims Act (FCA) can be utilized as a stick against healthcare providers when it comes to billing the federal government for routine medical services. The case, Universal Health Services v. United States, ex rel. Escobar, may decide whether a healthcare provider, by billing the federal government for a charge, makes an “implicit certification” that it has completely complied with what might be thousands of pages of complex and conflicting regulations.

“Good Facts” Can Make for “Bad” Law

Some FCA experts argue that in Escobar, we may have a situation in which “good” or compelling facts may make for bad law. Arbour Counseling Services (Arbour), a subsidiary of Universal Health Services, the huge hospital management company, operates in Massachusetts and bills MassHealth, the state’s Medicaid program, for a host of different services.

A teenager, who sought counseling services from Arbour, was seen by two counselors who lacked certification. When her parents later met with the counselors’ supervisors, the latter were unfamiliar with the case. It turned out that another therapist’s PhD was, in fact, an non-accredited online degree and the “expert” also lacked certification. Yet another therapist prescribed a medication for bipolar disorder, but the therapist was not a physician. When the teenager went off the medication, she suffered seizures and died.

Further investigation revealed that Arbour employed some 23 unlicensed and unsupervised “therapists.” This may sound like a malpractice case, but for our purposes, the parents sued Arbour and the parent company under the FCA (which allows for treble damages). The Court of Appeals ruled that the case could move forward, because when Arbour submitted bills for the services provided to the teenager, it implicitly certified that it had followed all appropriate regulations in connection with the supplying of medical care and services (there is little question that Arbour failed in this regard).

Important Issue for Other Healthcare Providers

What does Escobar have to do with physician billing or with the submission of bills to Tricare or Medicare? The answer: A lot! Universal Health Care is arguing that the implicit certification rule is unfair and unrealistic, that when a provider submits bills to Tricare, Medicare, or Medicaid, it isn’t affirming that it followed every regulation to the letter. Rather, it is certifying that it performed the service for which it is billing. According to this view, the FCA should be reserved for true fraud, where a provider never gave the service for which it’s billing, not for oversights and technical errors.

Healthcare Billing is a Maze and a Mine Field

It is difficult to predict what the Supreme Court will do in Escobar. With Justice Scalia’s death, some are predicting a 4-4 split, which would leave in place the implicit certification rule. Few deny that when it comes to healthcare billing, the provider faces a veritable minefield of regulations. It would help if some sort of compromise could be reached. We will just have to wait and see.

Experienced Legal Counsel is Key

In the meantime, any False Claim Act Violation is a serious matter. In these sorts of disputes, having a skilled, experienced attorney on your side is crucial. Oberheiden, P.C. has represented clients in all sorts of federal proceedings, including those that allege Tricare, FCA, or Medicare fraud. Located in Dallas, Texas, Oberheiden, P.C. is a team of lawyers and courtroom warriors. The firm has the resources to provide the best defense possible. If you choose to work with us, we will use our decades of experience, including time spent as federal prosecutors, to help protect your vital interests. To start building your defense today, call (800) 701-7249 or contact us online now.

This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Reading of this information does not create an attorney-client relationship. Prior results do not guarantee similar future outcomes. Oberheiden, P.C. is a Texas LLP with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.
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