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Attys Dish On Escobar’s FCA Impact 1 Year Later

June 16, 2017

Law360
By Jeff Overley

The U.S. Supreme Court‘s decision one year ago in Universal Health Services v. Escobar has jolted False Claims Act litigation by creating a new approach to “implied certification” cases involving undisclosed noncompliance. Here, attorneys tell Law360 about key ways in which the decision has been applied.

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Richard L. Scheff, Montgomery McCracken Walker & Rhoads LLP

“In Escobar, the Supreme Court recognized the implied false certification theory of FCA liability but imposed a demanding materiality requirement. The Escobar materiality test focuses on the effect of the implied misrepresentation on the government’s payment decision. Under this standard, materiality depends on whether the government would actually decline payment on the challenged claims had it known of the defendant’s implied false certification of compliance with the requirement at issue. Federal courts are still defining the evidentiary standards for this determination, and there has been increased analysis of the government’s response to the alleged fraud. We will likely see additional development in this area, given the continuing rise in FCA litigation and the post-Escobar focus on the government’s payment decisions.”

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