Hospitals Urging SCOTUS to Limit False Claims Act Penalties

Foley & Lardner LLP

What do a moving company and a hospital association have in common? The False Claims Act (FCA).

The American Hospital Association along with the United States Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America recently submitted an amici curiae brief in support of petitioners, Gosselin World Wide Moving, urging the Supreme Court to bar excessive FCA penalties. Large penalties under the FCA are of concern to business that contract with the government as well as entities that participate in Federal Health Care Programs.

The FCA creates liability for treble damages plus a civil penalty of $5,000 to $11,000 for each false claim submitted. The question is whether the Fourth Circuit erred in finding that the FCA requires imposition of a separate penalty for each invoice submitted to the Government. The Fourth Circuit held that a $24 million FCA penalty was not excessive, although damages were not proven at trial and the government had paid $3.3 million for the services in question.

Amici argue that the FCA creates “irrationally large” penalties that do not fit the severity of the harm done to the Government and are instead a repercussion of how the Government’s invoicing process that is imposed on contracting parties. There is a division among lower courts regarding how to calculate FCA penalties.

With an increasing number of FCA cases being brought each year by relators and with a large number focused on the health care industry, hospitals and other health care providers will want to see whether the Supreme Court weighs in on this issue.

View This Blog


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.

© Foley & Lardner LLP | Attorney Advertising

Written by:

Foley & Lardner LLP

Foley & Lardner LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.