Public Contract Law Journal

Striving for Consistency: Implied False Certification Theory after Escobar

by Christina Parel

Christina Parel (cparel@law.gwu.edu) is a J.D. Candidate at The George Washington University Law School and an Articles Editor on the Public Contract Law Journal. She thanks Professor Collin Swan and Notes Editor Roya Motazedi for their invaluable help and guidance throughout the Note-writing process. She also thanks her family, friends, and boyfriend for their support and encouragement.

I. Introduction

Yarushka Rivera died after experiencing an adverse reaction to a medication for bipolar disorder.1 Prior to her death, Ms. Rivera received treatment from Arbour Counseling Services (Arbour), a subsidiary of Universal Health Services, Inc.2 Arbour employees diagnosed Ms. Rivera with bipolar disorder and prescribed the medication that ultimately led to her death.3 Remarkably, an unlicensed psychologist diagnosed Ms. Rivera, and a nurse lacking authority to independently issue prescriptions prescribed the medication.4 Not only did Arbour permit unqualified practitioners to treat Ms. Rivera, but Arbour also submitted her treatment claims to the Massachusetts Medicaid program for payment.5

After Ms. Rivera’s death, her parents filed suit against Universal Health Services under the False Claims Act (FCA)6 — the “fundamental federal statute with the goal of promoting honesty in dealing[s]” with the government.7 Ms. Rivera’s parents argued Arbour defrauded the Massachusetts Medicaid program by submitting false claims for reimbursement for their daughter’s treatment.8 Ms. Rivera’s parents asserted that Arbour’s claims for reimbursement were false because Arbour did not disclose that Ms. Rivera’s treatment involved important and material violations of the Medicaid program’s regulations.9 In short, Ms. Rivera’s parents asserted the implied false certification theory of liability, in which liability under the FCA is triggered when a defendant does not disclose a “violation of a material statutory, regulatory, or contractual requirement.”10

The scope and meaning of the FCA has been contentiously litigated.11 The Supreme Court has ruled on FCA related cases “no less than [twenty-four] times since 1986, and in 2015 alone, federal courts of appeal interpreted elements of the FCA more than [ninety] times.”12 In the fiscal years of 2014 and 2015, 700 and 638 FCA cases were filed, respectively.13 Since 2009, the government has recovered $31.3 billion from FCA case settlements and judgments, with $4.7 billion stemming from the 2016 fiscal year alone.14

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