793 F.3d 120
D.C. Cir.2015Background
- DCPS sought federal Medicaid reimbursement for FY1998 under its State Plan, which incorporated 42 C.F.R. §§ 413 subparts and required providers to maintain records "capable of verification by qualified auditors."
- Davis & Associates (D&A) was subcontracted to prepare DCPS interim claims and retain supporting documentation for FY1998; D&A prepared a year-end cost report that DCPS did not submit.
- Maximus later prepared and DCPS submitted FY1998 Special Education and Transportation cost reports (the Transportation Report was submitted in Jan–May 2000), which sought additional federal funds.
- Auditors (Bert Smith) and CMS found DCPS cost information incomplete and recommended a settlement to recover federal funds; CMS noted earlier audits had relied on documentation that D&A supplied.
- Davis filed a qui tam suit alleging DCPS violated the False Claims Act by submitting the Transportation Report when it did not possess supporting service documentation; the district court granted summary judgment for Davis on that claim and imposed a single maximum penalty.
- On appeal following remand, the D.C. Circuit considered whether DCPS knowingly submitted a false claim by impliedly certifying possession/availability of audit records when D&A actually held the underlying documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether submission of the FY1998 Transportation Cost Report constituted a false claim by impliedly certifying possession/availability of supporting records | Davis: DCPS certified it had documentation but did not possess service records (D&A had them), so the claim was false | DC: DCPS reasonably relied on its contractual arrangement with D&A to maintain and produce records for audit, so no false certification | Held for District: no implied false certification because DCPS reasonably believed records could be produced through D&A |
| Whether the recordkeeping regulations cited are conditions of payment that can give rise to FCA liability | Davis: regulations requiring auditable records are payment conditions and noncompliance implies a false claim | DC: even if conditions, DCPS complied by arranging for D&A to maintain records and thus did not knowingly violate them | Court: need not decide; regardless, Davis failed to show DCPS knowingly violated the rules when it submitted the report |
| Whether DCPS acted with the requisite "knowledge" (actual knowledge, deliberate ignorance, or reckless disregard) | Davis: DCPS knew it lacked physical possession and thus knowingly submitted a false claim | DC: DCPS lacked knowledge because it reasonably relied on D&A's contractual duties and property status of records; D&A had been the contractor for FY1998 | Held for District: no genuine dispute that DCPS reasonably relied on D&A; Davis failed to show knowing or reckless conduct |
| Whether multiple false claims were submitted (number/penalties) | Davis: implied multiple false claims; district court found one and imposed maximum penalty | DC: challenged liability at all; appeal resolved on liability so court did not address number separately | Court reversed district court and entered judgment for District (no FCA liability); Davis' challenge to claim count need not be addressed further |
Key Cases Cited
- United States ex rel. Davis v. District of Columbia, 679 F.3d 832 (D.C. Cir. 2012) (prior opinion remanding for consideration of qui tam status)
- United States ex rel. Folliard v. Gov’t Acquisitions, Inc., 764 F.3d 19 (D.C. Cir. 2014) (standard of review for summary judgment)
- United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214 (D.C. Cir. 2003) (elements of FCA claim)
- United States v. Sci. Applications Int’l Corp., 626 F.3d 1257 (D.C. Cir. 2010) (implied certification doctrine and when silence supports inference)
- United States ex rel. Siewick v. Jamieson Sci. & Eng’g, Inc., 214 F.3d 1372 (D.C. Cir. 2000) (certification must be a prerequisite to payment)
- United States v. Krizek, 111 F.3d 934 (D.C. Cir. 1997) (definition of reckless disregard as extension of gross negligence)