One of the major areas discussion for whistleblower attorneys is conditions of payment vs conditions of participation.
There are two categories of false claims under the federal False Claims Act: a factually false claim and a legally false claim. A claim is factually false when the claimant misrepresents what good or services it provided to the federal government. On the other hand, a claim is legally false when the claimant knowingly falsely certifies that it has complied with the regulatory requirement that are a condition of payment from the federal government. Thus, a legally false claim under the civil False Claims Act is based upon a false certification theory of liability. In other words, a condition of payment is a requirement that must be fulfilled in order for the claimant to receive payment from the federal government.
There are also two types of false certifications: express and implied. Under the express false certification theory of liability under the civil False Claims Act, a company is liable under the federal False Claims Act for falsely certifying its compliance with regulatory requirements which are prerequisites to receiving payment from the government.
The implied false certification theory of liability under the civil False Claims Act is more expansive than the express false certification theory of liability. Liability under the implied false certification theory attaches when a claimant submits a claim for payment from the federal government without disclosing that it violated regulations that affected its eligibility to receive payment. Thus, an implied false certification theory of liability is based upon the notion that the act of submitting a claim for reimbursements itself implies compliance with the federal government’s requirements which are a precondition to payment.
One issue for whistleblower attorneys is determining whether the regulation violated is a condition of payment or a condition of participation in whistleblower lawsuits under the civil False Claims Act. The distinction is important because if the regulatory requirement violated is a condition of participation, it cannot be pursued under the civil False Claims Act.
Sometimes it is easy to determine whether a regulatory requirement is a condition of payment or a condition of participation because the regulatory requirement says so on its face. In other instances, making this determination is not as simple.
Courts have looked at different factors to determine whether a regulatory requirement is a condition of payment or participation for the purposes of assessing liability under the civil False Claims Act. Some courts have found that the difference between conditions of participation and conditions of payment is that conditions of participation are enforced through administrative mechanisms, and the ultimate sanction for a violation of such conditions is removal from the government program (Medicare, for example). Conversely, conditions of payment are those which, if the government knew they were not being followed, might cause it to refuse payment.
When pleading their client’s whistleblower lawsuits under the civil False Claims Act, whistleblower attorneys should be mindful of whether the regulations violated are conditions of participation or conditions of payment.
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Ross M. Wolfe and the Weiser Law Firm litigate whistleblower lawsuits on a contingent fee basis, so whistleblowers do not pay attorneys’ fees or court costs unless there is a recovery.
Please contact Ross M. Wolfe if you would like to speak with a whistleblower attorney for more information about the whistleblower process, the federal False Claims Act or to schedule a meeting to confidentially discuss your potential case.