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United States: ‘Objective Falsity’ And The FCA: An Ongoing Circuit Split

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The False Claims Act (“FCA”) is a Federal statute originally enacted in 1863 as a response to fraud from defense contractors during the American Civil War. Under the FCA (31 U.S.C. §§ 3729 – 3733), it is a crime for any person to knowingly submit false or fraudulent claims for payment to the United States government. Those who violate the FCA are liable for treble damages plus a per-claim monetary penalty (calculated to align with inflation). Private citizens can file whistleblower suits on behalf of the government (” qui tam “) against those who have allegedly violated the FCA.

The FCA is relevant for government payers such as Medicare, Medicaid, and TRICARE. On January 14, 2021, for example, the Department of Justice (“DOJ”) announced it recovered over $2.2 billion in settlements and judgments from FCA cases during fiscal year (“FY”) 2020. Of the $2.2 billion total, over $1.8 billion was recouped from cases involving the healthcare industry, such as managed-care providers, hospitals, physicians, and drug and device manufacturers. According to DOJ, the $1.8 billion only reflects federal losses; the DOJ also helped recover tens of millions of dollars for various state Medicaid programs .

While the FCA is certainly applicable to […]

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