Supreme Court: “Implied False Certification” of False Claims Act Permissible in Certain Circumstances

​So-called implied false certification can provide the basis for False Claims Act (FCA) liability, but only if it meets certain conditions, concluded the U.S. Supreme Court in its highly anticipated decision on Universal Health Services, Inc. v. United States ex rel. Escobar. In order to prove FCA liability, the court said, it must be shown that a provider knowingly failed to disclose a legal violation and that the omission related directly to the government's decision to pay for a service. The court added that the standard for determining whether the alleged false claims are material to the government's payment decision is "demanding" and said that violations cannot be found in situations in which "noncompliance is minor or insubstantial." The ruling could potentially help protect healthcare providers from FCA whistle-blower complaints, which can carry large financial damages.