On July 25, 2023, U.S. Senator Chuck Grassley (R-IA), introduced a bill that aims to, among other things, make it easier for the government to satisfy the False Claims Act’s materiality requirement when the government has made payment on a claim the government knows to be false or fraudulent. The bill, titled the “False Claims Amendments Act of 2023,” has bipartisan support and is co-sponsored by Senators Dick Durbin (D-IL), John Kennedy (R-LA), and Roger Wicker (R-MS).
The proposed amendments seek to make three changes to the False Claims Act (FCA). First, the bill states that, “[i]n determining materiality, the decision of the Government to forego a refund or to pay a claim despite actual knowledge of fraud or falsity shall not be considered dispositive if other reasons exist for the decision of the Government with respect to such refund or payment.” Second, the amendments would extend the Act’s anti-retaliation protections to former employees. Third, the amendments would require the U.S. Government Accountability Office to report on the effectiveness of the FCA, measured in part by the funds the government recovers under the Act.
The most significant of these proposed amendments to the Act is the first, which amounts to a congressional attempt to modify the U.S. Supreme Court’s 2016 ruling in Universal Health Services, Inc. v. United States ex. rel. Escobar, 579 U.S. 176 (2016), by softening the FCA’s materiality requirement. The FCA imposes liability only for a...
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