Supreme Court Issues Landmark FCA Ruling

The U.S. Supreme Court ruled on a False Claims Act (FCA) case last week. As you probably know, the FCA makes it illegal for a healthcare provider to submit for reimbursement a false claim. For example, submitting a claim for someone who does not exist – that would be a false claim.

Last week the Supreme Court clarified the standard. It ruled that the liability in the FCA depends on whether the defendants believed their claims were false, and not whether they had made an “objectively reasonable” interpretation of law or regulation.

This is so interesting because of two cases I recently defended: a) a group of physicians were accused of billing 99214s when the claims should have been 99213s, according to the whistleblower. Remember, whistleblowers are not always right. Then there was b) a doctor who told me she falsified 17 claims because she wanted them to be perfect.

The first group of physicians had a scathing email working against them. One of the doctors wrote an email stating to always bill level 4s. On the surface, it appeared that he was dictating that the billers bill level 4s regardless of the interaction. However, after understanding that English is not his first language and reviewing the actual billings, it was apparent to all that these doctors billed compliantly despite the language of the email.

The second case I told you about was a physician who blatantly changed her notes. She changed diagnoses, CPT® codes, and comments on behavior. I explained to her that her actions were illegal and that we needed to self-disclose. Self-disclosure, I am sure you are aware, rebuts penalties.

The Supreme Court ruled in favor of intent being understood. You cannot accidentally commit healthcare fraud or violate the FCA. It’s not like running a red light. Even if you didn’t mean to run the red light, you are guilty of running a red light. Not so in FCA cases, said the Supreme Court. There is no strict liability. The Supreme Court held that the standard is whether the defendants believed their claims were false.

The question presented was, according to the Supreme Court, whether the defendants could have the standard required by the FCA if they correctly understood that standard and thought their claims were inaccurate. Justice Thomas said, “yes.” The Supreme Court held that what is important is whether the defendants knew the claims were false.

Going back to my two examples: a) the doctors who were billing all 99214s were billing correctly, for real and in their heads. And b) the doctor knows that she billed fraudulently and is hiring a different lawyer.

According to the Supreme Court, knowledge is power.