In parallel cases arising from the First Circuit, two healthcare corporations, Blackstone Medical, Inc. and Amgen, Inc., have petitioned the United States Supreme Court for certiorari to clarify the parameters of when a claim for payment can be deemed “legally false” under the federal False Claims Act. See Blackstone Medical, Inc. v. United States ex rel. Hutcheson, No. 11-269, 2011 WL 3860767 (Aug. 30, 2011); Amgen Inc. v. State of New York, No. 11-363, 2011 WL 4400339 (Sept. 19, 2011). The issue of legal falsity is perhaps the most hotly-contested in FCA litigation, and a deepening circuit split makes it ripe for clarification by the Supreme Court.
The False Claims Act generally requires the submission or use of a “false claim.” A claim may either be factually false (e.g. a claim for a service never provided) or legally false (e.g. a claim either expressly or by implication states that certain legal prerequisites to payment have been complied with in submitting the claim). In the Blackstone and Amgen cases, the defendants allegedly failed to comply with requirements prohibiting the making of kickbacks to healthcare providers, which in turn led to allegations that the defendants caused the submission of claims tainted by kickbacks that were legally false.
Blackstone explained the diverse approaches of the circuits in its petition:
The courts of appeals have developed conflicting frameworks for evaluating when an alleged lack of compliance with a program requirement transforms a claim seeking payment for goods provided or services rendered into a “false or fraudulent” claim actionable under the False Claims Act. Describing these claims as “legally false,” rather than “factually false,” some circuits have adopted variations of an “express certification” theory of legal falsity; others have adopted variants of an “implied certification” theory; yet others attempt to discern program requirements that are “conditions of payment” from “conditions of participation,” with only the former actionable under the FCA. The First Circuit rejected all of these frameworks and announced its own.
Blackstone, 2011 WL 3860767, at *I.
The First Circuit decisions are found at United States ex rel. Hutcheson v. Blackstone Medical, Inc., 647 F.3d 377 (1st Cir. 2011), and New York v. Amgen Inc., 2011 WL 2937420 (1st Cir. July 22, 2011). The Blackstone petition for certiorari is available by clicking here and the Amgen petition is available by clicking here.