Supreme Court Upholds Implied Certification In FCA Claims Litigation

In the highly anticipated decision in Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. ____ (2016), the United States Supreme Court unanimously embraced the implied certification theory of liability under the False Claims Act, which could significantly expand healthcare providers' and other government contractors' potential exposure to expensive litigation and paralyzing judgments. Resolving a split among the circuits regarding this theory's scope and validity, the Court held that implied false certifications can be a basis for liability if two conditions are met:

• A claim to the government for payment must make "specific representations about the goods or services provided," which is often the case by default if the contractor utilizes standard, government-issued billing or reimbursement forms; and