We at Qui Notes were hopeful that the Supreme Court would take up one of two pending petitions to bring needed clarity to the question of what it means for a claim to be "false or fraudulent" under the False Claims Act. After all, the last FCA case before the High Court was from the October 2018 term and addressed an important, but somewhat esoteric, statute of limitations issue. Central to virtually every FCA claim, indeed one of the key elements for liability, is the question of what renders a FCA claim "false," particularly where reasonable minds could disagree as to the falsity of an express or implied representation. Does this crucial element require "objective falsity," as several circuits have held, meaning a representation capable of being proven objectively untrue? Or, as other circuits have held, is "subjective falsity" sufficient, that is, a representation deemed false based on an after-the-fact disagreement by a judge or jury with a judgment made at the time the invoices were submitted?
The two petitions, RollinsNelson LTC Corp. v. United States ex rel. Winter, No. 20-805, out of the Ninth Circuit, and Care Alternatives v. United States, No. 20-371, out of the Third, framed these issues well. In Winter, the relator challenged a Medicare reimbursement claim for inpatient hospital care, relying on her expert's post hoc disagreement with the admitting physician's medical opinion that certified inpatient admission was medically necessary. Similarly, in Care Alternatives, the relators alleged that a hospice provider submitted false claims for reimbursement because the provider certified patients was "terminally ill" (that is, had a life expectancy of six months or less) when those patients lived beyond that time and continued to receive treatment. In both instances, physicians made medical judgments based on professional opinion, not readily susceptible of being determined "objectively false," leaving judges and juries to pick the winner of a "battle of the experts" on either side. The Third and Ninth Circuits rejected the objective falsity standard, though other circuits including the Fourth, Eleventh, and the Seventh, have held otherwise. The cases had all the hallmarks of a "grant," the issues were ripe, there were clear circuit splits, and the cases had been well briefed (including strong industry amicus support).
Not to bury the lede, but we were reminded that it is the Supreme Court that decides for itself what is "cert worthy" when it denied further review by orders issued February 22. This Term there have been multiple strong candidates for review involving various FCA issues left on the cutting room floor, including these. For now, we will have to muddle through the continued uncertainty, hoping for future clarity from the Court in a future case. Until then, stay tuned as we bring you updates on the "falsity morass" as new cases are decided.
© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.
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