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Supreme Court in Escobar Imposes Conditions on Applying Implied Certification Theory in False Claims Cases, BNA's Medicare Report

July 12, 2016

The U.S. Supreme Court issued a landmark decision in Universal Health Services, Inc. v. United States ex rel. Escobar, addressing the viability and scopeof the implied certification theory of liability under the federal False Claims Act (FCA).

Although the Court recognized in its June 16, 2016, decision that the implied certification theory—which posits that, by submitting a claim for payment to the government, a contractor implicitly certifies that it has complied with all conditions of payment set forth in statutes, regulations and contractual provisions—could provide a basis for liability under the FCA, it imposed two significant conditions to application of the theory 

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