A bipartisan bill introduced this summer would impact residential and behavioral health facilities and other health care providers sued under the federal False Claims Act (FCA), making defense of these actions more expensive and difficult.
The False Claims Amendments Act of 2021 was designed in part to undo the result of the U.S. Supreme Court’s 2016 ruling in Universal Health Services, Inc. v. United States ex rel. Escobar, which allowed providers to argue that an alleged misrepresentation or violation was not “material” if the government agency continued to pay claims in some circumstances. The bill would also force providers to pay for certain discovery costs incurred by the government and would limit the ability of the Justice Department to dismiss FCA cases without a hearing.
Residential and behavioral health providers, like all providers, will face greater obstacles in defending FCA actions if this bill is enacted. Even without these changes, FCA suits are extremely expensive to defend and expose providers to penalties that frequently reach the millions.
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