Supreme Court Escobar decision – “Fantastic decision” say leading whistleblower attorneys

Washington, DC, June 16, 2016 - Below are comments from whistleblower attorneys Claire M. Sylvia and Colette G. Matzzie, partners at the whistleblower law firm Phillips & Cohen LLP, regarding today's Supreme Court decision on Universal Health Services Inc. v. United States ex rel. Escobar.

Phillips & Cohen LLP has the longest-standing and most successful law practice representing whistleblowers in qui tam cases, with more than $12 billion recovered for federal and state governments as a result of their cases.

Ms. Sylvia is the author of a major treatise on the False Claims Act and its qui tam (whistleblower) provisions, "The False Claims Act: Fraud Against the Government" (West 2010 and Supp 2015).

Comments of Claire M. Sylvia

"This is a fantastic decision overall for both taxpayers and whistleblowers. It affirms that government contractors that present half-truths and fail to comply with relevant and important requirements when seeking payment from the government are liable under the False Claims Act.

"The decision puts to rest the argument that a contract or statute must identify a requirement as a condition of payment in order for liability to exist. The 'express condition of payment' argument that government contractors use to avoid liability now is dead.

"Although defense lawyers will likely seize on one aspect of the decision - the court's observation that the government's payment of a claim when it knows that the healthcare provider or company hasn't complied with certain conditions can be used as evidence that the noncompliance wasn't relevant - government payment wouldn't necessarily be grounds to dismiss a case. The reality is that the government often pays contractors for good reasons, such as a need to ensure that the military or a hospital has vital equipment, even in the face of noncompliance with important requirements. In addition, the government often pays without knowing that a claim for payment was false, which is why the False Claims Act and whistleblowers are so important."

Comments of Colette G. Matzzie

"The Supreme Court's decision is a major victory for those who seek to hold healthcare providers accountable for providing healthcare services as required under state law."

"In the Escobar case, where it is alleged that a counseling service sought Medicaid payment for the services of mental health counsellors who lacked the required training, qualifications and experience, the Supreme Court wisely ruled that such conduct could be considered false claims and therefore, if proven, could be not entitled for payment.

"By issuing a unanimous opinion, the Supreme Court made clear that those who receive payment from the government, whether for healthcare of Medicare patients or for weapons to arm our troops, must comply with important regulations and contract provisions or may be required to repay the government and pay penalties."