Whistleblower attorneys say Supreme Court decision in Universal Health case could have significant impact

WASHINGTON, DC, April 19, 2016 -- A whistleblower case the Supreme Court is scheduled to hear today - Universal Health Services Inc. v. United States ex rel. Escobar - could have a far-reaching impact on healthcare fraud enforcement as well as government contractor fraud cases if the court adopts the arguments of Universal Health Services and its supporters, say attorneys at Phillips & Cohen LLP.

Phillips & Cohen LLP has the longest-standing practice representing whistleblowers under the False Claims Act and is the nation's most successful whistleblower law firm, with nearly $12 billion recovered by federal and state governments and agencies as a result of its cases.

Comments of Claire M. Sylvia, a San Francisco partner at Phillips & Cohen and the author of The False Claims Act: Fraud Against the Government, a leading treatise that is used as a reference by attorneys and courts.

• "A ruling that adopted Universal Health's broad arguments could affect the ability of the government to hold healthcare providers, defense contractors and others accountable for taking taxpayer funds and ignoring important contract or other legal requirements."

• "By taking this case to the Supreme Court, Universal Health and its supporters are attempting to weaken the False Claims Act, which is the government's most powerful and effective tool for stopping Medicare fraud, defense contractor fraud and other types of fraud against the government. The False Claims Act does not apply to mistakes or accidents. Only those who know they are not complying with the law or fail to make a reasonable inquiry are subject to it."

• "Since the Civil War, the False Claims Act has prohibited contractors from asking the government for payment for goods or services if they knew they were not entitled to payment. Just as the Act applied to a contractor during the Civil War who provided lame horses instead of healthy horses or overcharged for muskets, the Act prohibits a modern day healthcare provider or defense contractor from seeking payment for goods or services that do not comply with important requirements, regardless of whether they expressly made a false statement.

• "Opponents of the False Claims Act have framed this case using a formalistic phrase invented by lawyers, 'implied certification,' to suggest that there is something complicated or unique about cases where an invoice does not contain an actual false statement. That phrase bears little relationship to the words of the statute or the reality of government funding of goods and services. There is nothing novel about requiring those who receive government funding to be in compliance with important regulations and contract provisions when they seek payment from the government, regardless of whether they make an actual false statement.

Comments of Colette G. Matzzie, a Washington, DC, partner with Phillips & Cohen LLP:

• "Although the case before the Supreme Court focuses on the Medicaid payment for mental health treatment provided to one Massachusetts patient, if the Court adopted the arguments being made by Universal Health and its supporters, the outcome could be felt wherever taxpayer money is spent for services and goods provided by private contractors, including healthcare providers and defense contractors. Many federal and state programs require that government contractors and program participants ensure they have provided goods or services in the manner specified by contract or regulation before submitting a claim for payment to the government."

• "The common-sense rule articulated by the US Court of Appeals ensures that the government gets what it pays for, whether the taxpayer dollars are spent on medical services for the poor and elderly, higher education grants and loans for college students, national defense or on numerous other government programs."

• "A victory for the government and the whistleblowers in the case or even a 4-4 vote by the court would help ensure that taxpayer dollars go only to healthcare providers and others that meet government standards and regulations when they provide goods and services under government contracts."

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