The False Claims Act’s (FCA) materiality requirement as articulated by the U.S. Supreme Court in Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016) was again front and center, this time in a case recently decided by the Third Circuit Court of Appeals.
In United States ex. rel. Druding v. Care Alternatives, the court, in a precedential opinion, applied Escobar’s materiality test and ruled that the District Court had improperly granted defendant Care Alternatives’ motion for summary judgment because it had assigned dispositive weight to only one of the materiality factors laid out by the Court in Escobar and had overlooked the remaining factors which could have weighed in favor of materiality.
The Third Circuit’s analysis of each of the Escobar factors in the context of the specific facts involving Care Alternatives provides another illustration of how courts are applying the principles laid out in Escobar in deciding materiality issues in FCA cases.[1]
The FCA imposes liability on any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval to the government, provided the false or fraudulent claim is material to the government’s payment decision.
Escobar involved a suit by a qui tam relator against Universal Health Services alleging that Universal, acting through an affiliate, violated the FCA by submitting reimbursement claims that made representations about the...
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