Does Intent Matter in Health Care False Claims Cases?
Health Care False Claims Cases: Does Intent Matter?
Can one be found guilty of committing health care fraud if they didn’t intend to do so? The landscape of proving intent in kickback-based false claims act cases is murky and developing. As national leaders in health care fraud enforcement, our law firm, Barrett Johnston Martin & Garrison, PLLC, stays on top of the latest developments involving health care fraud and False Claims Act cases to represent whistleblowers in cases all over the country.
In the vast majority of False Claims Act (FCA) lawsuits, the party making the allegations (i.e., the whistleblower or the government) has to prove that the defendant acted with the requisite level of “intent.” The FCA was not designed to punish innocent mistakes. However, the whistleblower is not required to prove that the defendant actually intended to commit fraud. An individual or company that (1) “knows” it is submitting false claims, (2) acts with “reckless disregard” of whether the claims being submitted are false, or (3) proceeds in “deliberate ignorance” of whether its claims are false all meet the FCA’s intent standard.
The situation becomes more complicated when kickbacks are involved. The FCA itself does not explicitly address kickback allegations, but a separate federal law, the Anti-Kickback Statute (AKS), provides, among other things, that any claim submitted to a federal healthcare program (like Medicare or Medicaid) that results from an unlawful kickback is false for purposes of the FCA. Unlike the FCA, the AKS is actually a criminal statute, and like most criminal statutes, the AKS is drafted with a comparatively high threshold for intent, specifically a showing that the defendant acted “knowingly and willingly.”
In practice, when a whistleblower alleges false claims based on an unlawful kickback theory, the whistleblower must satisfy the standards of both the civil FCA and the AKS. Courts have historically struggled with the question of how to reconcile these intent standards and develop a clear standard for what “willfulness” even means in the kickback context.
Recently, the Second Circuit Court of Appeals (which has jurisdiction over federal courts in Connecticut, New York, and Vermont) held that in order to succeed in a kickback-based FCA case, the whistleblower must establish that the defendant actually knows that its conduct was against the law (U.S. ex rel. Hart v. McKesson Corp. 96 F.4th 145 (2d Cir. 2024)) However, the whistleblower does not need to show that the defendant knew that its conduct violated the AKS specifically.
The law in this area is still developing. However, whistleblowers and their counsel should expect to see more and more challenges as to whether they have properly alleged willfulness when making AKS-based allegations. And while the standard intent standard in such cases is higher, it is hardly insurmountable with proper planning and drafting in the vast majority of cases. If you have information or questions regarding a potential case of health care fraud, schedule a free and confidential consultation with our firm.
