A recent U.S. Supreme Court ruling in a lawsuit involving the application of the Wartime Suspension of Limitations Act to False Claims Act cases could have healthcare industry implications.
The WSLA was enacted to lengthen the time allowed to prosecute fraud offenses against the U.S. and its agencies during times of war until five years after the termination of hostilities as proclaimed by a presidential proclamation, with notice to Congress, or by a concurrent resolution to Congress.
Although the case of Kellogg Brown & Root Services v. United States ex. rel. Carter deals with warfare and water treatment, the Supreme Court's decision in the case has healthcare industry implications.
In the lawsuit, the Fourth Circuit held the False Claims Act statute of limitations has been suspended since the beginning of the war in Iraq, and the statute of limitations would not begin to run until five years after the president or Congress proclaims the hostilities are terminated.
The case was appealed and landed in front of the Supreme Court, and the court was tasked with determining whether the WSLA applies to civil conduct as well as criminal conduct. The high court held the WSLA does not apply to civil cases, preventing healthcare providers from potentially being involved in lengthy litigation over stale claims, which would be costly and difficult to defend.
However, another ruling in the lawsuit is not a positive one for healthcare providers. The Supreme Court addressed the issue of whether whistle-blowers should be allowed to file multiple lawsuits alleging the same fraud. The court ruled that a lawsuit may contain the same allegations as a case that was previously dismissed, as long as the dismissal was not based on the merits of the case.
Under the court's ruling, healthcare providers "could find themselves defending several cases — on the same issue — in several courts at once," says Lisa Noller, partner with Foley & Lardner, where she is vice chair of the Government Enforcement, Compliance and White Collar Defense Practice. "Moreover, because FCA cases begin under seal, a company may be faced with the prospect of defending successive cases at different stages of litigation, and may not be aware there are cases to be consolidated."
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