6th Circuit Court Ruling May Significantly Reduce Recoverable FCA Damages by Feds

In U.S. ex rel. Wall v. Circle C. Construction, Case #14-6150, 2016 WL 423750 (6th Cir. Feb. 4, 2016), the 6th Circuit Court held that damages in false certification cases should be based on the difference between the value of the items or services the government should have received and the value of the items or services the government actually received. The holding, which arose in the non-healthcare context of a construction contract, arguably applies in healthcare matters where medically necessary items or services were furnished pursuant to referrals that violated AKS or Stark laws and thus the government did not sustain any actual damages. A court could then find that the treble damage provision under the False Claims Act is not applicable and the government’s damage recovery is limited to the $5,500-11,000 per claim penalty.

Robert S. Iwrey, Esq., a founding partner of The Health Law Partners, P.C., practices in all areas of healthcare law and devotes a substantial portion of his practice assisting clients in government investigations including the defense of FCA and qui tam actions, third party payor audits, DEA registrations, state licensing, pharmacy legal matters, and compliance. For more information regarding this article, please contact Robert S. Iwrey, Esq. at (248) 996-8510 or (212) 734-0128 or riwrey@thehlp.com.