Health Law Alert: In False Claims Litigation, Providers Cannot Invoke "No Harm, No Foul"


On the basketball court, the conventional wisdom is "no harm, no foul." It is not so in federal court, particularly in litigation involving the False Claims Act (FCA). The FCA allows the imposition of civil monetary penalties, even if the federal government did not sustain any economic injury as the result of a false claim. More specifically, the FCA provides that persons or entities submitting knowingly false claims may be liable for a civil penalty of up to $11,000 per claim, plus three times the amount of any damages sustained by the federal government. A recent D.C. Circuit decision found that a provider was not liable for FCA treble damages because the government sustained no injury, but noted that the provider still could be held liable for civil penalties.

In U.S. ex rel. Davis v. District of Columbia, 679 F.3d 832 (D.C. Cir. 2012), the plaintiff alleged that D.C. Public Schools (DCPS) requested millions of dollars in Medicaid payments for health and transportation services that DCPS provided to special education students, even though DCPS lacked required documentation to support its services. After concluding that the plaintiff's claim was not precluded by the FCA's "public disclosure" bar, the Davis court turned to the question of whether the federal government had been harmed by the alleged false claims. The plaintiff asserted that the federal government would not have paid for DCPS's services if it had known that DCPS lacked the required documentation. Thus, according to the plaintiff, the entire amount paid to DCPS constituted "damages" sustained by the federal government.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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