Supreme Court Restricts Scope Of False Claims Act

On June 9, 2008, the United States Supreme Court limited the scope of the False Claims Act (FCA) with its opinion in Allison Engine Co. v. United States ex rel. Sanders, a decision that potentially calls into question the applicability of the FCA to Medicaid claims. The FCA is a federal statute that allows individuals to sue on behalf of the federal government for false claims made to the federal government. In a unanimous ruling the Supreme Court addressed whether a plaintiff asserting a claim under the FCA must show a relationship between the making of the false claim presented to a third party and the payment or approval of the false claim by the United States Government. Relying on the plain language of the statute, the Supreme Court held that the fact that a false statement is submitted to a third party who uses government funds to pay the claim is not enough. Rather, the claim must be actually paid or