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Supreme Court hears False Claims Act case that could have healthcare implications

Decision on allegedly fraudulent defense contract could mean more lawsuits for healthcare organizations
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A False Claims Act case against a water purifying company accused of fraudulently billing the U.S. government could have implications for the healthcare industry, particularly when it comes to whistleblower actions.

The Supreme Court began hearing arguments in Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter last week in a False Claims Act (FCA) case that revolves around a water purifying company contracted in Iraq.

Benjamin Carter, a former Kellogg Brown and Root Services Inc. employee, filed an FCA lawsuit in 2006 under the whistleblower provisions of the law, alleging that KBR was charging for water purifying and testing services in Iraq, but never actually provided those services. Carter filed three separate suits between 2006 and 2011, all of them dismissed, according to ScotusBlog. But a decision on the third suit was reversed by the U.S. Court of Appeals for the 4th Circuit in Virginia.

Now that the Supreme Court has begun hearing arguments on the case, health providers are on "very high alert," according to the Advisory Board. Although unrelated to healthcare, the case has implications regarding the statute of limitations for whistleblowers to bring FCA claims and whether or not whistleblowers can file multiple lawsuits.

In September, the American Hospital Association, the American Medical Association and the Pharmaceutical Research and Manufacturers of America filed an amicus brief in support of KBR, arguing that the decision could impact healthcare facilities that face FCA claims. "These entities, many of whom provide needed services to gvernment agencies and those served by government programs, will be forced to defend against stale, repetitive, and frequently meritless claims," the brief stated.

After the first day of arguments, the outcome of the case is still cloudy, according to a second ScotusBlog post, but healthcare organizations will be playing close attention to the proceedings. A recent report by Bloomberg BNA's Healthcare Fraud Report's advisory board identified the KBR case as one of the more important FCA cases in 2015.

For more:
- read the Advisory Board article
- see the first and second ScotusBlog posts
- here's the amicus brief (.pdf)

Related Articles:
Reviewing the year in healthcare fraud
Two reports dive into expected healthcare fraud trends for 2015
False Claims Act enfocement continues into high gear
What payers need to know about the False Claims Act