Getnick Law Comments on Supreme Court Declining to Address FCA Falsity
The U.S. Supreme Court on Monday declined to review a pair of decisions concerning the definition of “falsity” under the False Claims Act (“FCA”). While some commentators had predicted the Supreme Court might review the cases to resolve a split among the U.S. Courts of Appeals as to whether a claim must be “objectively false” to give rise to FCA liability, the Supreme Court’s decision leaves those appellate decisions in place.
At issue in these cases is the role that clinical judgment plays in determining falsity under the FCA. In 2019, the U.S. Court of Appeals for the Eleventh Circuit held that a doctor’s clinical judgment—in that case, about whether a patient was eligible for hospice care—could not be considered false, and therefore trigger FCA liability, if it did not reflect an “objective falsehood.” As that court explained, “the mere difference of reasonable opinion between physicians, without more, as to the prognosis for a patient seeking hospice benefits does not constitute an objective falsehood.” Last year, however, the U.S. Courts of Appeals for the Third and Ninth Circuits came to a different conclusion, rejecting the “objective falsity” standard and holding that subjective medical opinions could be considered false.
Many commentators and practitioners considered these opinions to reflect a split in authority and expected the Supreme Court to resolve the issue. The Supreme Court’s decision not to review these cases has significant implications for FCA litigation moving forward. First, the Supreme Court’s decision supports the position articulated by the Third Circuit that the “objective falsity” standard conflates the element of falsity with the element of scienter, which requires that, for FCA liability to attach, a false claim must be made knowingly by the defendant. Second, some commentators have suggested that the Supreme Court’s decision to leave in place the Third and Ninth Circuit decisions will lead to “an uptick in FCA settlements as defendants consider the costs of extended litigation.”
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