backSupreme Court Finds FCA Liability Depends on Defendants’ Subjective Beliefs
In a unanimous opinion, the Supreme Court in United States ex rel. Schutte v. SuperValu Inc., No. 21-111, 2023 WL 3742577 (U.S. June 1, 2023) found that liability in False Claims Act (FCA) suits depends on the defendants’ subjective beliefs and vacated two Seventh Circuit rulings that had found such knowledge never to be relevant. The Court noted that “[t]he FCA’s scienter element refers to [the defendants’] knowledge and subjective beliefs — not to what an objectively reasonable person may have known or believed.”
The framework the Seventh Circuit used would have meant FCA liability could not have been found as long as defendants identified an objectively reasonable interpretation of a statute or regulation after the fact. Additional analysis and insight is forthcoming in a King & Spalding Client Alert.
The Supreme Court decision is available here.
Reporter, Christopher Jew, Los Angeles, +1 213 443 4336, cjew@kslaw.com.
CMS Lifts COVID-19 Vaccine Requirements for Long Term Care Facilities
On May 31, 2023, CMS issued a final rule (Final Rule) repealing COVID-19 vaccination requirements for staff and testing requirements for staff and patients of long-term care (LTC) facilities. These were previously required for LTC facilities to participate in the Medicare and Medicaid programs. According to CMS, the agency “aims to use quality reporting and value-based incentive programs to encourage health care facilities to practice preventative measures against COVID-19” going forward. The Final Rule also establishes requirements for LTCs to provide education about COVID-19 vaccines and to offer vaccines to residents, clients, and staff.
Regulations regarding COVID-19 testing, education, and vaccination mandates were established through the issuance of a series of interim and final rules published by HHS between September 2, 2020, and November 5, 2021. Provisions of these interim and final rules expired with the end of the public health emergency on May 11, 2023.
The Final Rule is effective on August 4, 2023, which is sixty days after publication in the Federal Register. The Final Rule, as published in the Federal Register on June 5, 2023, is available here.
Reporter, Amy L. O’Neill, Sacramento, +1 916 321 4812, aoneill@kslaw.com.
UPCOMING EVENTS
King & Spalding Roundtable:
June 20, 2023 from 1:00 – 2:00 PM ET
Healthcare M&A deals have come under increasing scrutiny in recent years. A number of state legislatures have proposed or enacted new laws to require parties to transactions involving acquisitions and other investments in healthcare providers to submit transactions to regulators for review prior to closing. The FTC and state antitrust regulators have also stepped up their efforts to review healthcare M&A deals. Regulatory reviews can significantly impact the closing timeline for transactions and can also create uncertainty regarding the ability to close in states where regulators are given discretion to block transactions.
The panel will explore:
- Newly-passed legislation requiring regulatory review of healthcare transactions
- Other efforts to impose regulatory review requirements for healthcare deals
- Potential impact on healthcare M&A trends
- Strategies for navigating licensure and change of ownership (CHOW) requirements