While many aspects of the False Claims Act are firmly settled by consistent holdings by federal district and appellate courts, other areas are more grey – including how much weight should be given to the difference between a condition of payment and a condition of participation. In today’s article, we explore the merits of an amicus curiae brief filed by Massachusetts Attorney General Martha Coakley. In it, she urges the First Circuit to revive a qui tam lawsuit against Universal Health Services, Inc., citing the District Court’s “overly rigid” conditions for imparting liability under the False Claims Act.
Details of Underlying Cause of Action
Attorney General Coakley filed an amicus brief (i.e., a memorandum of law and analysis filed by an interested non-party) in opposition to District Court Judge Douglas P. Woodlock’s decision to dismiss a whistleblower lawsuit filed by two whistleblowers whose child was treated at a UHS facility. The relators alleged that UHS was engaging in the routine practice of permitting unlicensed staff members to perform mental health services on patients – particularly those receiving Medicare and Medicaid/MassHealth benefits from the government. Specifically, relators asserted that their child was treated for mental health services at a UHS satellite facility, which did not maintain proper oversight of mental health staff.
The case was dismissed at the outset following Judge Woodlock’s determination that the relators failed to allege that UHS’s misconduct was both material and false. At the crux of Woodlock’s analysis was the distinction, as found in federal and Massachusetts regulations, between conditions for participation in government programs and, alternatively, conditions for receiving payment. Woodlock concluded that the realtor’s allegations pertained to conditions for participation in government programs – not conditions for reimbursement – and were, therefore, not actionable under the False Claims Act.
The Commonwealth urged the Court to abandon the use of this rigid framework when determining False Claims Act liability. It advanced the argument that, “A plain, ordinary reading of the relevant provisions of the FCA makes clear that such labels are not required for a finding of liability thereunder. By relying on such labels to conclusively determine FCA liability, the lower court read a determinative requirement into the FCA that does not exist in the statute.”
In other words, it shouldn’t matter whether the violation pertains to a condition for participation or a condition for reimbursement – fraud is fraud.
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