As we have previously reported, the Supreme Court will decide a case this term that will address the viability and scope of the implied certification theory. Earlier this week, numerous stakeholders filed amicus briefs supporting the petitioner, illuminating the practical consequences of the vast scope of potential liability under the implied certification theory.
The hallmark of the implied certification theory is the notion that virtually any regulatory obligation can be invoked as being “material” to the government’s payment decision. Courts thus must ex post define a claim as “false or fraudulent” by hazarding a guess as to whether the government would have declined to pay had it known of the regulatory violation. The morass of regulations governing numerous industries, but particularly the healthcare industry, leaves participants uniquely vulnerable to potential treble damages and public opprobrium under this theory of FCA liability. The amici advanced numerous statutory and public policy reasons for eliminating the implied certification theory.