November 2016

In one of the few cases to apply the Supreme Court’s recent decision in Universal Health Services v. Escobar, the Seventh Circuit recently revisited and affirmed its prior rejection of an implied certification claim under the FCA.  Whether this is a window into how other circuit courts might implement Escobar remains to be seen.

In United States ex rel. Nelson v. Sanford-Brown, Ltd., 788 F.3d 696 (7th Cir. 2015), the relator brought several claims, one of which was an implied certification claim, alleging that Sanford-Brown College (the “College”), which receives federal subsidies, violated the FCA by maintaining recruiting and retention practices that ran afoul of Title IV.  In particular, the College entered into a Program Participation Agreement (PPA) with the federal government to receive subsidies under the Higher Education Act, and the PPA contained boilerplate language requiring the College to affirm that it would comply with Title IV’s mandates.  The relator claimed that because the College’s practices in actuality violated Title IV, its representations in the PPA, and its attendant subsidy claims, were false.Continue Reading Seventh Circuit Revisits Sanford-Brown, Rejects Implied Certification Claim

In June, the Supreme Court issued Universal Health Services, Inc. v. U.S. ex rel. Escobar, a landmark opinion in which the Supreme Court addressed the standard for pleading materiality in FCA implied certification cases.  The Supreme Court ultimately remanded the case to the First Circuit to resolve in the first instance whether the alleged violations met that standard, and last week, the First Circuit gave its answer: the violations were material.
Continue Reading On Remand, First Circuit Finds Violations in Escobar Were Material

In a question of first impression, the Eleventh Circuit recently examined whether a relator’s secondhand knowledge of his employer’s billing practices was sufficient to make him an original source relative to the FCA’s public disclosure bar. Following several other circuits, the Eleventh Circuit answered that question by concluding that such knowledge would not render a relator an original source.
Continue Reading Eleventh Circuit Holds Secondhand Knowledge Does Not Make Relator an Original Source

This summer, the Northern District of California issued an opinion in an intervened case that expanded the theory of express false certification to a startling degree. Ruling on a motion to dismiss, the court in U.S. ex rel. Dresser v. Qualum Corp. (No. 5:2012-cv-01745, N.D. Cal.) held that the defendants, owners and operators of a sleep clinic and a DME company, could be subject to express false certification liability for submitting CMS-1500 claim forms in which they certified their compliance “with all applicable Medicare and/or Medicaid laws, regulations, and program instructions for payment.” According to the court, this general legal certification was sufficient to support an express false certification claim because “by submitting the CMS-1500, Defendants falsely certified that they had complied with Medicare regulations, even though they were not complying with the personnel qualification requirement, and they made this certification knowingly.”
Continue Reading North District of California Misconstrues Express False Certification Liability

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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