Seven of Nine Circuits Now Recognize Implied False Certification Liability Under the False Claims Act

The Third Circuit Court of Appeals recently joined the Second, Sixth, Ninth, Tenth, Eleventh, and District of Columbia Circuits in adopting the implied false certification theory of liability under the False Claims Act (FCA). Implied false certification liability attaches to a party when it makes a claim for payment from the Government without disclosing that it violated regulations affecting its eligibility for payment. Rodriguez v. Our Lady of Lourdes Med. Ctr., 552 F.3d 297, 303 (3d Cir. 2008). The Third Circuit case, U.S. ex. rel. Willis v. United Health Group, Inc., partially reversed the dismissal of qui tam claims against United Health Group and its subsidiaries (United) offering Medicare Advantage (MA) plans.

District Court

The relators alleged that United sales representatives violated the FCA by offering kickbacks to physicians in violation of the Anti-Kickback Statute (AKS), and failing to comply with MA marketing rules. The district court dismissed the complaint because the relators did not identify a single claim for payment to the government, allege that United specifically certified compliance with the AKS, or demonstrate that the government issued payments based on a certification of compliance.

Third Circuit Court of Appeals

The Third Circuit held that FCA liability may exist even though a complaint does not identify a particular false claim if the defendant submitted a claim for payment while knowingly being out of compliance with a statute/regulation to which it had certified compliance. Yet, the court limited application of the implied theory; liability for implied certification will attach only if compliance with the particular statute/regulation is a condition for government payment (rather than merely a condition for participation in federal health care programs).

Consequently, the court held that United was liable for the AKS claims under the implied false certification theory. United was required to certify monthly as to its continued compliance with Medicare guidelines in order to be eligible for participation under the federal health care program. The AKS was part of those Medicare guidelines, and compliance with them was an express condition of payment. However, the court affirmed the dismissal of the marketing claims because compliance with the marketing rules was only a requirement for Medicare participation, not payment.