The False Claims Act (FCA) is the federal government’s primary statute for litigating fraud in the United States. The FCA’s use has evolved significantly since its inception, transforming into one of the most important tools to combat healthcare fraud and abuse. Healthcare spending in the United States accounts for almost 18 percent of the country’s overall gross domestic product (GDP). With significant spending comes the opportunity for widespread fraud, particularly with the expansion of technology and artificial intelligence (AI). The United States General Accounting Office estimates that $100 billion is lost annually to healthcare fraud, waste, and abuse—about 10 percent of all healthcare expenditures. Consequently, the federal government’s efforts to combat healthcare fraud and abuse using the FCA have widespread impacts on the United States’ economy.
Though aspects of the FCA’s scienter, or knowledge, requirement have been defined by federal circuit courts and the Supreme Court, the recklessness standard of the FCA has gone largely undiscussed. Clarifying the definition of recklessness under an objective standard when applying the FCA would allow for greater opportunity to litigate healthcare fraud. An objective recklessness standard would ensure that healthcare entities and providers are not using technology as a shield for submitting false claims to the federal government.
Part I of this Comment discusses the background of the FCA, including its history, purpose, and the requirements for proving a cause of action under the statute. It also discusses the evolution of the FCA and two amendments that overhauled the Act in 1943 and 1986. Part II focuses on the modern use of the FCA to litigate healthcare fraud. It points to the tremendous rise in healthcare spending in the United States and the subsequent rise in healthcare fraud and litigation, outlining the four most common kinds of healthcare fraud actions under the FCA. Part III discusses the origin of the recklessness standard in the FCA and its interpretation by federal circuit courts and the Supreme Court. Part IV discusses the potential for the Supreme Court to establish an objective recklessness standard for the FCA. It concludes by highlighting the need for a more apparent recklessness standard for the FCA, given the rapid expansion of AI-powered claims processes used by major healthcare entities. This could lead to an increase in FCA suits involving recklessness.
