On December 4, the U.S. Supreme Court granted certiorari in Universal Health Services, Inc. v. U.S. ex rel. Escobar, No. 15-7, raising the question of whether "implied certification" liability is permissible under the False Claims Act and, if so, under what circumstances. Under the implied certification theory, defendants are presumed to have certified that they are in compliance with the law or a contractual obligation, even when they have not explicitly made that certification, thus bringing them within the FCA's ambit. Given the breadth of circumstances in which the implied certification has been, and can be, applied, the Court's ruling in Universal Health Services could bring far-reaching changes to the scope of FCA liability.
The Court accepted two questions for review—(1) whether the theory is valid at all and, if it is, (2) whether it applies only where the defendant fails to comply with a statute, regulation, or contractual provision that expressly provides that compliance is a condition of receiving payment from the government.
To learn more about "implied certification" liability under the FCA, read the Client Alert written by Reed Smith attorneys James C. Martin, Colin E. Wrabley and Patrick Yingling.
Stay tuned for more updates as we continue to monitor this important case.
This article is presented for informational purposes only and is not intended to constitute legal advice.
