In a significant and unanimous ruling, the Supreme Court held that reimbursement requests submitted to the E-Rate program qualify as “claims” under the False Claims Act (FCA) if any portion of the funds involved originates from the U.S. Treasury. The decision in Wisconsin Bell, Inc. v. United States ex rel. Heath is poised to have far-reaching implications for entities that receive federal funds through intermediaries, heightening litigation and raising the stakes for FCA compliance.Continue Reading Decision Alert: Supreme Court Broadens False Claims Act Reach To E-Rate Reimbursement Requests
Federal Court Tees Up False Claims Act Constitutionality Dispute
The Supreme Court recently decided U.S. ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023). In dissent, Justice Thomas questioned the constitutionality of the qui tam regime under the False Claims Act (FCA), by which a private “relator” represents the interests of the United States in litigation. Concurring with the majority, Justices Kavanaugh and Barrett nevertheless agreed with Justice Thomas that the constitutional issue he raised should be considered in “an appropriate case.” Dykema covered the decision, including the dissent, in a previous article.Continue Reading Federal Court Tees Up False Claims Act Constitutionality Dispute
Figuring Out the FCA: Supreme Court Issues Two Decisions
In June 2023, the Supreme Court issued two opinions interpreting the False Claims Act (FCA)—U.S. ex rel. Schutte v. SuperValu, Inc., (June 1, 2023), U.S. ex rel. Proctor v. Safeway, Inc. (June 1, 2023), and U.S. ex rel. Polansky v. Executive Health Resources, Inc. (June 16, 2023).In the Supervalu/Safeway decision, which was an important victory for relators, the Court reinforced that the focus is on the subjective knowledge of a defendant for the scienter component of the FCA. In Polansky, the Court, in a ruling beneficial to defendants, held that the Government may dismiss an FCA action when it intervenes, even after the unsealing of the FCA complaint. Each decision also contains discussion about the scope of the FCA, and its statutory interpretations, which will surely lead to future challenges.
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Sixth Circuit Issues Major False Claims Decision
On March 28, 2023, the U.S. Court of Appeals for the Sixth Circuit issued an important decision, US ex rel Martin, et al., v. Hathaway, et. al., Case No. 22-1413, regarding the Anti-Kickback Statute (AKS) and False Claims Act (FCA). In affirming the District Court’s dismissal of an FCA complaint against Oaklawn Hospital (Oaklawn) and a physician, the Sixth Circuit placed boundaries on the term “remuneration” under the AKS. Its decision is the first to define the scope of the term “remuneration” under the AKS. In addition, the Sixth Circuit adopted the “but-for” standard for causation to bring an AKS claim. This decision empowers healthcare providers, and other companies, with strong legal arguments to dismiss speculative and unsubstantiated lawsuits brought under the AKS and FCA.
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Supreme Court Rejects Third Challenge To Affordable Care Act
On June 17, the Supreme Court rejected another court challenge to the Affordable Care Act (“ACA”), holding that the plaintiffs lacked standing to challenge its minimum essential coverage provisions. For the third time, the Supreme Court upheld the ACA. More than a decade after the ACA was enacted, the long and winding road of ACA challenges may be over and healthcare industry participants may finally be able to rely on the ACA as settled law moving forward.
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