The U.S. Supreme Court recently heard oral arguments in a lawsuit involving the application of the Wartime Suspension of Limitations Act to False Claims Act cases — an issue that has the potential to spur more healthcare fraud lawsuits.
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 5 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 could have implications for the healthcare industry.
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 has landed in front of the Supreme Court, and the court is tasked with determining whether the WSLA applies to civil conduct as well as criminal conduct. If the Supreme Court applies the WSLA to civil False Claims Act cases, the ruling could present tremendous risk to hospitals and other healthcare providers.
The False Claims Act statute of limitations is six years. However, "If the court determines the WSLA applies to FCA cases, the six-year statute of limitations could be tolled indefinitely, since the government is (arguably) always at war," says Lisa Noller, partner with Foley & Lardner, where she is vice chair of the Government Enforcement, Compliance and White Collar Defense Practice.
If the WSLA is applied to civil False Claims Act cases, healthcare providers would be involved in lengthy litigation over stale claims, which would be costly and difficult to defend, according to comments from Lauren Stine and Mark Bina, both partners at Quarles & Brady.
In the lawsuit, the Supreme Court is also addressing the issue of whether whistle-blowers should be allowed to file multiple lawsuits alleging the same fraud, which is another matter that could have implications on the healthcare industry.
"If successive FCA cases are permitted to proceed, companies could find themselves defending several cases — on the same issue — in several courts at once," says Ms. Noller. "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."
Although the court's decision could significantly affect healthcare providers, the healthcare fraud "playing field" would remain the same if the court concludes the WSLA doesn't apply to civil False Claims Act cases or restricts its application, according to Ms. Stine and Mr. Bina.