In two cases closely watched by FCA experts, the Supreme Court rejected two petitions asking the justices to weigh in on a circuit court split regarding whether the False Claims Act requires objective falsity, or whether a differing expert opinion is sufficient to show fraud. The justices did not comment on the requests, filed by hospice operator Care Alternatives and health care management company RollinsNelson LTC Corp.
The question of objective falsity has split the courts, with the Eleventh Circuit finding in AseraCare that a difference of medical opinion cannot by itself demonstrate falsity under the FCA, while the Third Circuit in Care Alternatives held that a physician’s medical judgment can be considered a legal falsity, if that opinion is called into question by contrasting expert opinion.
What do the experts say?
Arnold & Porter: Picking its Cases with Care: SCOTUS Declines to Weigh in on Objective Falsity Standard
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?
Bass Berry & Sims: Supreme Court Declines to Weigh in on Key Falsity Question
For several years, courts have wrestled with the question of whether subjective clinical decisions regarding the type and amount of treatment patients may need can be false for purposes of establishing False Claims Act (FCA) liability. The question of whether the FCA requires a showing of objective falsity has divided appellate courts in a number of recent high-profile cases. For their part, practitioners have kept a close eye on whether the Supreme Court might bring much-needed clarity to this issue. On February 22, the Supreme Court declined to do so, denying a petition for certiorari with respect to the Third Circuit’s opinion in U.S. ex rel. Druding v. Care Alternatives.
Foley & Lardner: Supreme Court Declines to Resolve Circuit Split on FCA “Objective Falsity” Issue
On Monday February 22, 2021, the U.S. Supreme Court declined to grant certiorari in CareAlternatives v. United States (CareAlternatives), a case on appeal from the Third Circuit that could have assessed the issue of “objective falsity” under the federal False Claims Act (FCA). The Supreme Court’s rejection leaves standing the split among Circuit Courts on whether the government or a whistleblower (Relator) must prove that a claim is objectively false to bring a successful FCA claim. This means that health care providers potentially face differing levels of FCA risk depending on the jurisdiction where an FCA case is brought.
Arent Fox: Supreme Court Declines to Review Issue of “Objective Falsity” Under False Claims Act
On February 22, 2021, the United States Supreme Court denied petitions for certiorari in a case that could have addressed the issue of “objective falsity” under the False Claims Act. By denying the petitions, the Court left in place a split among the circuit courts on whether a successful claim under the FCA requires proof that a claim was objectively false or whether an expert opinion that differs from the judgment of the physician at issue can be sufficient to show that a claim for payment is false.
Mintz: Supreme Court Declines to Weigh in on Requiring Objective Falsity in FCA Medical Necessity Cases
As our readers know, we have long been closely watching False Claims Act (FCA) cases across the country alleging the submission of false claims based on the lack of medical necessity, particularly as a possible circuit split seemed to be developing with respect to requiring “objective falsity” to allege such FCA violations. And we have likewise been waiting to see if the issue will be decided by the Supreme Court. On February 22, 2021, we got an answer – at least for now – when the Supreme Court denied a petition for certiorari in RollinsNelson LTC Corp. et al v. U.S. ex rel. Winters, a FCA case out of the Ninth Circuit in which the defendant was accused of submitting claims to Medicare for medically unnecessary hospital admissions (which we have been following since last year).
Polsinelli: SCOTUS Declines to Review False Claims Act Cases on Falsity and Medical Judgment
On February 22, 2021, the United States Supreme Court declined to review two False Claims Act (FCA) cases, solidifying a split that pits the Eleventh Circuit against the Third and Ninth Circuits as to whether a disagreement over a physician’s clinical judgment can serve as a basis for establishing “falsity” under the FCA. Specifically, the Eleventh, Third and Ninth Circuits have each rendered decisions about the need to demonstrate objective falsity, and whether a reasonable difference of opinion between physicians is sufficient to trigger FCA liability.
Snell & Wilmer: Healthcare and Government Contractors Beware: False Claims Act’s “Objective Falsity” Requirement Dispute Between Circuits Persists Following Denial of Cert by U.S. Supreme Court
Due to COVID-19, there have been a significant amount of economic incentive programs and government contract opportunities to assist in stimulus and responding to the crisis. This is in addition to the typical government procurement and healthcare costs reimbursements by the government. When individuals or entities interact with the government, there is False Claims Act (FCA) liability associated with monies that were not properly earned or claimed. At times, whether a claim was actually false is in dispute and reasonable minds may disagree. On February 22, 2021, the U.S. Supreme Court declined certiorari to hear two petitions, which would have resolved a circuit court split regarding whether the FCA requires “objective falsity” of information or a claim to establish liability.
See also:Â
- Troutman Pepper: A Difference of Opinion Remains: The Third Circuit’s Rejection of an “Objective Falsity” Requirement for FCA Liability Stands After the Supreme Court Denies Certiorari
- Faegre Drinker: SCOTUS Denies Certiorari in Cases Concerning FCA Liability Requirement, Objective Falsity Circuit Split Remains Intact
- Lathrop GPM: Supreme Court Declines To Clarify the Standard for Proof of Falsity Under the False Claims Act
- Nelson Mullins Riley & Scarborough LLP: Supreme Court Declines Request to Address False Claims Act Liability For Medically Unnecessary Services
