Today, in Universal Health Services v United States ex rel. Escobar, the Supreme Court resolved a circuit split on a question of great importance for government contractors: whether a claim presented to the United States for payment can be false or fraudulent for purposes of the False Claims Act (“FCA”) under the so-called “implied certification” theory. The Court answered in the affirmative, unanimously holding that “the implied false certification theory can, at least in some circumstances, provide a basis for liability.” The Court sought to allay any “concerns about fair notice and open-ended liability” by emphasizing the strict application of the FCA’s materiality and scienter requirements, clarifying the meaning of these requirements, and rejecting the Government and Second Circuit’s interpretation of implied certification as “extraordinarily expansive.” It remains to be seen whether the Court’s descriptions of the manner in which the FCA’s materiality and scienter requirements should be “rigorous[ly]” applied will provide meaningful protections to government contractors, including healthcare and other companies participating in various government programs, that face potential FCA liability based on implied certification theories of liability.
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