Perfection is unattainable when it comes to the myriad regulations that healthcare organizations must follow, according to an amicus brief in the case of Universal Health Services Inc. v. United States et al. ex rel. Escobar et al, on behalf of the National Association of Criminal Defense Lawyers.
The brief notes that it is a fundamental prerequisite of due process that one have fair notice of conduct that might be unlawful. That explanation means that a provider should not be guilty of violating the False Claims Act (FCA) unless it knew it was violating a condition of payment, the brief argues. (The brief is available at http://bit.ly/299dkwH.)
“Imposing a broad duty to disclose noncompliance with a contractual, regulatory, or statutory obligation that the government might later deem, for litigation purposes, to be “material” — and then imposing the FCA’s draconian penalties for the failure to disclose such noncompliance — does not come close to providing the sort of fair notice the Constitution requires,” the brief says. Such a standard leaves contractors or program participants to guess at what violations might, or might not, affect the government’s decision to pay a claim and what they have to disclose to avoid an FCA violation.
“In that decidedly unpredictable environment, where the government is incentivized in litigation to elevate any instance of noncompliance to a ‘material’ one that can support FCA liability, only perfect compliance — or complete disclosure of all noncompliance — can ensure against a potentially annihilating FCA award of civil penalties and treble damages,” the brief says. “But in the present regulatory climate, perfect compliance is a virtual impossibility for most contractors — the scope and complexity of one’s legal obligations are often both expansive and inscrutable.”