Failure to comply with a condition of payment can result in the denial of the claim for payment or, if the payment has already been made, the amount paid on the claims is considered an overpayment that must be refunded under current law. While a provider may eventually be excluded from the federal health care program, exclusion is relatively rare and only occurs if the provider fails to become substantially compliant during the corrective period.
The distinction between a condition of payment and a condition of participation has been—and should continue to be—of particular significance in actions brought under the federal False Claims Act (FCA). Conditions of Participation In contrast, if the condition or requirement that has not been satisfied relates not to a prerequisite for payment but to a condition of participation in a federal health care program, the outcome is less clear, as a claim may be eligible for payment even if a provider is out of compliance with one or more conditions of participation at the time the claim is submitted. Conditions of participation are typically minimum health and safety standards focused on quality of care provided. For that reason, a number of courts have recognized that it would be both inappropriate and premature for the government to refuse to pay otherwise appropriate claims on the basis that the provider failed to fulfill all conditions of participation. Specifically, the plaintiff alleged that spirometry tests were performed without testing devices being properly calibrated, which made the doctors noncompliant with various Medicare regulations. Defendants had submitted claims on a form that stated: “I certify that the services shown on this form were medically indicated and necessary for the health of the patient and were personally furnished by me or were furnished incident to my professional service by my employee under my immediate personal supervision.” The court noted that both the form on which the claims were submitted and the Medicare regulations stated that certification is a precondition to Medicare reimbursement. The court held that defendants’ certification found on the claim form was a precondition of government payment for those claims.
This article provides an introduction to the cases dealing with conditions of payment and participation with a focus on recent cases discussing the distinction between the two and the implications of that distinction under the FCA. Under the qui tam provision of the act, a private individual may sue on behalf of the federal government to recover damages sustained by the government. When these cases first arose, some courts cautioned against applying the implied false certification theory too broadly in the health care context, given the complicated regulatory scheme in place. Failure to comply with a condition of payment may properly form the basis for an FCA suit under the theory that payment should not have been made on the claim absent compliance with the condition of payment. Therefore, although there was an express certification, it was not false.
False Claims Act The FCA was originally enacted during the Civil War as a response to widespread fraud by government contractors. The act prohibits many activities related to the submission and presentation of false claims, whether it be conspiracy or direct involvement in creating the claim. Legally and Factually False Claims Courts evaluating FCA suits have recognized two types of actionable false claims: factually false and legally false. For instance, the Second Circuit in the case, discussed below, held that implied false certification is “appropriately applied only when the underlying statute or regulation upon which the plaintiff relies expressly states the provider must comply in order to be paid.” , 274 F.3d at 699–700. Failure to comply with other Medicare regulations (conditions of participation) pertaining to the quality of care was not sufficient to convert a legitimate certification into a false one.
Ad valorem tax, The Texas Supreme Court has not determined whether the Constitution impliedly prohibits the Legislature from allowing a political subdivision to impose ad valorem taxes absent express constitutional authorization Article I, section 16 of the Texas Constitution, metropolitan rapid transit authority may charge a withdrawn city for transportation services provided to persons with disabilities pursuant to sections 451.610 and 451.616 of the Transportation Code, even if city withdrew from authority prior to enactment of sections 451.610 and 451.616 of the Transportation Code, without violating Article I, section 32 of the Texas Constitution, political subdivisions are prohibited from creating a legal status of domestic partnership and recognizing that status by offering public benefits based upon it, pursuant to County business under article V, section 18b, legislature not prohibited from authorizing commissioners court to improve city streets unconnected with county road system if county derives a benefit from improvement so as to constitute County-paid employees may perform private work in county attorney's private practice of law provided county commissioners court has approved the practice prior to the time attorney renders services to county Delegation of authority, statute authorizing General Land Office to select a tract of state-owned land to place in permanent school fund in exchange for tract to be patented out lacks sufficient standards to be constitutional Delegation of legislative authority to private entity, whether statute authorizing state agency to award money to development corporation to make loans to community health center violates article III, section 1Disability benefits that a retirement system determines are no longer payable under the terms of the retirement system as those terms existed on the date the retirement system began paying the disability benefits, article XVI, section 66 does not apply to Equal and uniform requirement, if its sales and use tax at different rates in different subregions falls equally on people and property within each subregion and the different tax treatment by subregion is reasonable, Regional Transportation Authoritys sales and use tax levy does not violate Ex post facto prohibitions, Texas Government Code section 51.608 authorizes assessing nonpunitive court costs based on statutes existing on the date of conviction and therefore does not violate ex post facto prohibitions in the United States and Texas Constitutions Exemption on basis of geographical classification from certain real estate license renewal requirements, decision on possible violation of either state or federal equal protection requirement or state constitutional prohibition or local or special law would require factual determinations that cannot be made in attorney general opinion Home-rule city authority, because the constitution requires the legislature to provide for tax increment financing in a reinvestment zone pursuant to general law and the implementing law does not authorize a city to extend a zone's duration, a home-rule c Home-rule municipality, whether proposed ordinance requiring businesses selling alcoholic beverages for on-premises consumption to have condoms available for sale is preempted by Alcoholic Beverage Code Homestead, a property owner may encumber the property with a covenant running with the land, which, depending on the particular instruments and circumstances involved, may be enforced by foreclosure without violating subsequent purchasers' constitutional Homestead, a public improvement district assessment may be enforced by foreclosure of a homestead provided that the statutory lien created by section 372.018(b) of the Local Government Code predates the date the property became a homestead and the amounts Hospital district's authority to lease hospital building, lease to private dialysis clinic for purpose of providing cost-effective renal services adjacent to hospital would serve "hospital purpose" under article IX, section 9Instant runoff voting, home-rule municipality cannot institute because inconsistent with state constitutional and statutory requirements that municipal officers be elected by majority vote and, if no candidate be elected by a majority, that a runoff elect Permanent School Fund, statute that purports to give to littoral property owners title in fee simple to artificially reclaimed, once-submerged lands without compensating the Fund violates article VII, section 4 of the constitution Proceeds from the sale of agency salvage or surplus personal property purchased with revenue constitutionally dedicated to highway purposes are not themselves constitutionally dedicated to highway purposes and, for sales occurring on or after September 1, Property tax freeze for persons with disabilities or persons sixty-five years of age or older, adopted by a home-rule municipality under article VIII, section 1-b(h), may not be repealed by an election called pursuant to a petition of the city's voters Property tax freeze for persons with disabilities or persons sixty-five years of age or older, article VIII, section 1-b(h) of the Constitution does not permit a county, a city or town, or a junior college district implementing that provision to use a yea Property tax freeze for persons with disabilities or persons sixty-five years of age or older, the tax limitation in article VIII, section 1-b(h) of the Constitution is available to a city that has not previously enacted a residence homestead tax exemption Property tax freeze, article VIII, section 1-b(h) of the Constitution authorizes a governing body of a home-rule municipality, on its own motion and without a petition from the city's voters, to call an election to adopt a tax freeze for persons who are d Redistricting, when constable's precinct is abolished by redistricting, article V, section 18(c) of Texas Constitution provides that constable will serve out term in precinct where he or she resides Retroactive compensation, county civil-service commission or sheriff's department civil-service commission may adopt rule permitting award of back pay in certain circumstances without contravening constitutional prohibition of School districts expenditure of funds for city-mandated infrastructure will not violate article III, section 52 of the Texas Constitution, if school district determines that paying the city for infrastructure costs accomplishes a public purpose and that it otherwise meets the requirements established by the Texas Supreme Court Sexually oriented businesses, decisions about distance requirements between and other land uses are implicitly left to the discretion of the county but should be considered in light of any constitutional rights of such a business including rights of free speech Takings Clause, article I, section 17, Texas Constitution - Tree preservation ordinances, a court could find a regulatory taking if all economically beneficial or productive use of land is denied or if the ordinance unreasonably interferes with a landowner's right to use and enjoy their property Tax increment financing, because the constitution requires the legislature to provide for tax increment financing in a reinvestment zone pursuant to general law and the implementing law does not authorize a city to extend a zone's duration, a home-rule city lacks authority to extend a zone's duration beyond the termination date established in the ordinance designating the zone Taxation, statute requiring chief appraisers of overlapping appraisal districts to enter into their districts appraisal records the lowest appraised and market values from all the values determined by each appraisal district does not violate article VIIITexas Constitution article III, section 52(a), in utilizing the Texas Supreme Court test to evaluate public expenditures under, Texas courts have suggested that (1) an incidental benefit to individual trustees does not invalidate the expenditure if the contract is predominantly for the direct accomplishment of a legitimate public purpose of the school district; (2) the principal constitutional concern regarding control measures is not who is implementing them but whether such controls are put into place to begin with; and (3) what constitutes an adequate return benefit depends on a variety of specific circumstances but is called into doubt if there is such a gross disparity in the relative values exchanged as to show unconscionability, bad faith, or fraud. Automatic resignation under article XVI, section 65, officer who resigns to run for another office continues to hold over in office until successor is appointed and qualifies for office under article XVI, section 17City council member who is employed by a school district as a coach may be a schoolteacher for purposes of article XVI, section 40(b)(1) of the Constitution if participating students receive credit for participation City council member whose current term is uncompensated, article III, section 19 of the Texas Constitution does not render ineligible to serve in the Texas Legislature; "term" is not synonymous with "tenure"Constable who was convicted of a felony but whose conviction was finalized only after he was reelected to a new term is automatically removed from office under subsection 87.031(a) of the Local Government Code County law enforcement official entitled to medical expenses and salary when injured in course of official duties under article III, section 52e, jailers, detention officers, and correctional officers employed by sheriff qualify as Employment with the state, city commissioner who accepts does not automatically forfeit his or her position and may continue in both positions if he or she renounces salary, and monies that city commissioner receives as expenses do not exceed actual expenses incurred Grant to Harris County Juvenile Probation Department of deferred prosecution authority in certain nonviolent misdemeanor cases involving juveniles does not infringe on district attorney's criminal jurisdiction under article V, section 21 of Texas Constitution Holds over in office, incumbent municipal officer whose term is set by charter at more than two but no more than four years (assuming incumbent's term of office has not yet expired) holds over in office despite receiving a plurality, not a majority, of th Recess appointee is ipso facto nominated to the Senate if the governor fails to nominate appointee or some other person during first ten days of legislative session (Affirmed by Tex. However, it is unlikely that a court would consider conduct subsequent to a contract's execution in determining whether the contract itself violates article III, section 52(a). MW-461 (1982) & JM-533 Nonprofit organization, county may not transfer public funds to in accordance with contract unless commissioners court determines that transfer will accomplish a public purpose that county has authority to accomplish and that adequate controls are in plac Office space, commissioners court may permit county attorney to use county office as registered address for nonprofit organization incorporated by county attorney if court makes certain findings of fact Payment of civil penalty under chapter 707 of the Transportation Code by school district may not contravene article III, sections 51 and 52(a) of the Constitution if district is not liable but payment accomplishes public purpose Policy compensating peace officers for time on standby status would constitute unconstitutional increase in compensation only if policy provided for compensation for standby prior to adoption of policy Printing services without competitive bidding, article XVI, section 21 of the Texas Constitution does not prohibit the boards of regents of The University of Texas System and The Texas A&M University System from adopting a rule that establishes a dollar amount under which the university system may procure Real property lease as a thing of value, junior college district's authority to enter into long-term lease with religious organization that would construct student center, chapel, and other facilities on campus Real property, state universitys conveyance of by exchange for historical papers or rights of access to property or by outright gift, consistent with article III, sections 51 and of the Texas Constitution Reimbursement for certain expenses associated with service on a city council, a home-rule municipality may determine qualifying expenses but may not contravene article III, section 52(a) of the Constitution Retroactive compensation, county may not pay group health insurance premiums for retired employee absent additional consideration from employee if county did not provide for such coverage nor possibility of such coverage at time of employee's retirement Road bonds issued under article III, section 52(b) and (c), a county may use to construct, maintain, or operate a municipal street that forms a connecting link or an integral part of a county road or state highway Sandy Land Underground Water Conservation District may transfer certain assets to individuals or other entities only in accordance with three-pronged constitutional test designed to ensure that such transfer accomplishes a public purpose Scholarship fund for architectural examination applicants, in order to ensure that scholarships serve the public purpose identified by the legislature, Board of Architectural Examiners should consider adopting rules that would require scholarship recipien Scholarship fund for architectural examination applicants, legislative appropriation for is supported by pre-existing substantive law and therefore does not violate article III, section 44 of the Texas Constitution School district provision of free office space to private nonprofit foundation, board of trustees must determine that transaction serves a public purpose, that consideration is adequate, and that controls are sufficient to ensure public purpose is achieve State motor vehicle registration fees, Governor may not increase or appropriate but, in case of emergency, may redirect funds already appropriated by the legislature for purposes consistent with article VIII, section 7-a of Texas Constitution Surplus motor vehicle registration fees, a county that does not impose a road and bridge tax under article VIII, section 9(c) of the Texas Constitution may transfer surplus fees to any other county fund to use as authorized by article VIII, section 7-a of Suspension with pay, prospective term of employment does not violate constitution where provision serves legitimate public purpose and has sufficient controls to ensure public purpose is served Suspension with pay to county employees is gratuitous ex Texas Constitution article III, section 52(a), in utilizing the Texas Supreme Court test to evaluate public expenditures under, Texas courts have suggested that (1) an incidental benefit to individual trustees does not invalidate the expenditure if the contract is predominantly for the direct accomplishment of a legitimate public purpose of the school district; (2) the principal constitutional concern regarding control measures is not who is implementing them but whether such controls are put into place to begin with; and (3) what constitutes an adequate return benefit depends on a variety of specific circumstances but is called into doubt if there is such a gross disparity in the relative values exchanged as to show unconscionability, bad faith, or fraud.
To the extent that a sitting justice of the peace holds dual offices by also serving as a temporary justice under Government Code section 27.055, a court would likely conclude that doing so is constitutional under the exception provided in article XVI, section 40Community service in rural areas as alternative to alcohol awareness course, imposition of criminal punishment in some venues that may not be imposed in others violates due process and equal protection guarantees Due process, county may impose hotel occupancy and car rental taxes in absence of election where legislature has set fixed maximum rate and where taxation does not vary on the basis of benefit received Equal protection, county employees' incentive plan does not violate constitutional guarantee by allowing bonuses only to a full-time employee whose job performance has been favorably evaluated and whose department head has implemented a business plan approved by the commissioners court Equal protection, whether article 1.051(c) of Code of Criminal Procedure requiring that counsel for indigent criminal defendant be appointed within one day of defendant's request in populous counties and within three days of request in less populous count Law enforcement services in different areas of county, absent invidious discrimination based on suspect class, equal protection requires only that county government have rational basis for providing different levels of Regulatory takings challenge, a court considering challenge would use federal framework examining: (1) regulation's economic impact on claimant; (2) the nature of the governmental action; and (3) regulation's degree of interference with property owner's economic expectations."Retroactive law and impairment of contract, amendments to statute governing purchases made with forfeited funds would constitute if applied to purchases made by district attorney prior to effective date Slayers Rule or the constructive trust doctrine, a court would likely hold Probate Code section 41(e)(3) contravenes article I, section 21 of the Texas Constitution to the extent that it bars inheritance from a persons own child under circumstances not within the Oath of office - election judges, alternate election judges, and early-voting clerks are public officers and must take the constitutional oath of office under Texas Constitution article XVI, section 1. Article III, section 52(a), whether a public purpose under Texas Constitution article III, section 52(a) is served by a particular expenditure raises fact questions that cannot be answered in an attorney general opinion and would be a decision for the school district in the first instance, subject to judicial review.
However, the court also found that the Stark Law and the Medicare regulations implicated in Ebeid’s suit could have formed the basis for an FCA suit if they had been properly pled. In part, the Stark Law provides that “no payment may be made” for services rendered because of a prohibited referral.
Boese, Civil False Claims and Qui Tam Actions, §1.06(C). If, however, the government would have paid the claim “despite knowing that the contractor has failed to comply with certain regulations, then there is no false claim for purposes of the FCA.” , 543 F.3d at 1219. The statute contained an “express condition of payment—that is, ‘no payment may be made’”—which linked the statutory requirements to the actual payment for services. The court noted that conditions of participation are quality care standards that must be complied with for the provider to continue to participate in the program—not prerequisites to particular individual payments.
Increasingly, FCA suits in the health care context involve false certification claims alleging that the claim is false because the provider has failed to satisfy a condition required to participate as a provider in Medicare or some other federal health care program. The outcome of these cases often depends on whether the court treats the underlying rule or regulation as a condition of payment or condition of participation. is often cited for the proposition that in an implied certification case, the condition of payment must be expressly stated in the rule or regulation at issue for the violation to be actionable under the FCA. Furthermore, although Baptist’s “alleged non-compliance with Conditions of Participation may lead to prospective corrective action or even termination, Plaintiff has not presented any evidence that Defendants would have been ineligible to receive payment of its Medicare claims during a potential period of non-compliance.” Because Baptist could have continued to receive payments even if Landers’s allegations had been true, no liability could attach under the FCA.
Failure to comply with a condition of participation can result in sanctions, increased reporting requirements, and eventually, exclusion from participation in the program.
Other rules regulating health care providers are deemed to be conditions of, or prerequisites to, payment for services rendered. These requirements are often phrased fairly imprecisely because they are designed to improve the quality of the health care provided, not to enforce specific administrative requirements. If conditions of participation are not met, various sanctions may be imposed upon the provider, including a corrective action plan, monetary sanctions, and increased reporting requirements.
Increasingly, relators have sought to expand the FCA to enforce violations of rules and regulations that are only tangentially related—if at all—to eligibility for payment. However, Mikes’s allegations pertaining to the manner in which spirometry testing was carried out were unrelated to the certification found on the claim form.