(CN) - The Supreme Court agreed to hear part of a case centered on whether a government contractor's Medicaid reimbursement claims are "legally false" if payment conditions were not clearly specified.
The nation's high court agreed Friday to tackle two questions regarding the "implied certification" theory of legal falsity under the False Claims Act, or FCA.
FCA makes it illegal to submit a false or fraudulent claim for government reimbursement. Some judges have found a claim to be "legally false" if a contractor provided products or services but didn't comply with a payment condition imposed by law or a contract.
The U.S. Supreme Court will look at whether the implied certification theory is viable and, if so, whether a government contractor's reimbursement claim can be legally "false" under the theory if the law or contractual provision at issue doesn't specifically say that it is a condition of payment.
The United States and Massachusetts alleged that reimbursement claims from Universal Health Services were legally false because the company's services didn't comply with certain regulatory provisions, according to court records.
The underlying case involves Universal Health's Medicaid reimbursement claims for mental health care services. The government sued after discovering unlicensed counselors at the company's Lawrence, Mass., clinic, claiming violations of the FCA, court records show.
A district court dismissed the government's lawsuit, finding that none of the regulatory provisions at issue imposed conditions of payment, except for one that the government did not claim Universal Health violated.
But the First Circuit reversed in March of this year and found that Massachusetts Medicaid regulations allegedly violated by Universal Health were conditions of payment. The government therefore stated an actionable FCA claim for legal falsity, according to the Boston-based appeals court.
Universal Health petitioned the high court for review in June. Per its custom, the Supreme Court did not comment on last week's decision to take up aspects of the FCA case.