AHA, AHIP urge Supreme Court to reject government's False Claims Act interpretation

The American Hospital Association and America's Health Insurance Plans on March 28 filed an amicus curiae brief in ongoing lawsuits — U.S. vs. Supervalu and Safeway — challenging the federal government's interpretation of the False Claims Act ahead of the Supreme Court's hearing of the cases.

The issue at hand is whether a defendant's "objectively reasonable" interpretation of vague statutory language offers a proper defense to the "knowledge" element for liability under the False Claims Act, which imposes liability on those who defraud governmental programs, according to Mintz, a Boston-based law firm.

In the brief, the organizations argue that the government's "erroneous construction and expansion" of the False Claims Act threatens the business activities of every government contractor, hospital and health insurance provider, and grant recipient in the country. They argue it would also steer resources away from AHA and AHIP members' core mission — caring for patients, reducing the cost of care and ensuring a healthy population.

"While AHA and AHIP may not always share the same opinion on matters of litigation and policy, we agree that the current regulatory landscape and construction of the False Claims Act creates an untenable situation for healthcare providers and health insurance providers," the organizations said in a statement. "If the government’s argument is accepted, our members will be forced to spend more on litigation and less on patient care."

The organizations contend that Medicare and Medicaid are critical programs that operate only with the participation of private parties such as their members, but participation involves navigating complex statutory and regulatory requirements. This is why the government's argument is a significant concern for AHA and AHIP. 

"The government would impose criminal or civil FCA liability even though it admits that it cannot ‘feasibly address in advance every potential ambiguity' in its thousands of statutes of regulations," the organizations said. "The rule it proposes would create a Wild West of ramifications for any well-intentioned and legitimate hospital or insurance provider that seeks to serve Americans in partnership with the government."

AHA and AHIP have urged the Supreme Court to adopt an interpretation of the False Claims Act that does not "undermine the ability of our members" to ensure access to high-quality and affordable care.

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