Seventh Circuit reaffirms "worthless services" cases don't state an FCA claim

The Seventh U.S. Circuit Court of Appeals has reaffirmed its view that healthcare services being below appropriate standards does not constitute a claim under the False Claims Act, according to a JDSupra report.

According to the "worthless services" theory, a healthcare provider defrauds Medicare or Medicaid by submitting claims for healthcare services that are of little or no value to the patient. For example, in the case the Seventh Circuit was reviewing, the trial court had upheld the worthless services theory, and instructed the jury "that if the nursing home billed Medicare $200 for services worth only $120, that was a false claim." At the trial court level, the whistle-blowers, who filed the case under the qui tam provision of the False Claims Act, received $29 million, which was later reduced to $9 million.

The nursing home appealed the case to the Seventh Circuit. In August, the appeals court rejected the theory by stating, "Services that are 'worth less' are not worthless," according to the report. 

Last week, the appeals court reaffirmed its decision by denying the whistle-blowers' petition to have the case heard by all judges of the court rather than the panel of judges that originally heard the case.

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