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Earlier today, my colleagues Tom Crane and Larry Freedman released a Health Care Enforcement Defense Advisory regarding the Supreme Court's long-awaited, unanimous decision in Universal Health Services v. United States ex rel. Escobar ("Escobar"). As they discuss in detail, the Court ruled that under certain circumstances the theory of "implied false certification" can give rise to liability under the False Claims Act ("FCA").
The Court explained that FCA liability can attach when (1) "the claim does not merely request payment, but also makes specific representations about the goods or services provided," and (2) the defendant's "failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths." However, the Court also limited the scope of the FCA by imposing a "rigorous" and "demanding" standard of materiality.
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