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SUPREME COURT OF THE UNITED STATES
_________________
No. 15–7
_________________
UNIVERSAL HEALTH SERVICES, INC., PETITIONER
v.UNITED STATES and MASSACHUSETTS, ex rel. JULIO
ESCOBAR and CARMEN CORREA
on writ of certiorari to the united states
court of appeals for the first circuit
[June 16, 2016]
Justice Thomas delivered the opinion of the
Court.
The False Claims Act, 31 U. S. C.
§3729
et seq., imposes significant penalties on those
who defraud the Government. This case concerns a theory of False
Claims Act liability commonly referred to as “implied false
certification.” According to this theory, when a defendant submits
a claim, it impliedly certifies compliance with all conditions of
payment. But if that claim fails to disclose the defendant’s
violation of a material statutory, regulatory, or contractual
requirement, so the theory goes, the defendant has made a
misrepresentation that renders the claim “false or fraudulent”
under §3729(a)(1)(A). This case requires us to consider this theory
of liability and to clarify some of the circumstances in which the
False Claims Act imposes liability.
We first hold that, at least in certain
circumstances, the implied false certification theory can be a
basis for liability. Specifically, liability can attach when the
defendant submits a claim for payment that makes specific
representations about the goods or services provided, but knowingly
fails to disclose the defendant’s noncompliance with a statutory,
regulatory, or contractual requirement. In these circumstances,
liability may attach if the omission renders those representations
misleading.
We further hold that False Claims Act liability
for failing to disclose violations of legal requirements does not
turn upon whether those requirements were expressly designated as
conditions of payment. Defendants can be liable for violating
requirements even if they were not expressly designated as
conditions of payment. Conversely, even when a requirement is
expressly designated acondition of payment, not every violation of
such a requirement gives rise to liability. What matters is not the
label the Government attaches to a requirement, but whether the
defendant knowingly violated a requirement that the defendant knows
is material to the Government’s payment decision.
A misrepresentation about compliance with a
statutory, regulatory, or contractual requirement must be material
to the Government’s payment decision in order to be actionable
under the False Claims Act. We clarify below how that rigorous
materiality requirement should be enforced.
Because the courts below interpreted
§3729(a)(1)(A) differently, we vacate the judgment and remand so
that those courts may apply the approach set out in
thisopinion.
I
A
Enacted in 1863, the False Claims Act “was
originally aimed principally at stopping the massive frauds
perpetrated by large contractors during the Civil War.”
United
States v.
Bornstein, 423 U. S. 303, 309 (1976) .
“[A] series of sensational congressional investigations” prompted
hearings where witnesses “painted a sordid picture of how the
United States had been billed for nonexistent or worthless goods,
charged exorbitant prices for goods delivered, and generally robbed
in purchasing the necessities of war.”
United States v.
McNinch, 356 U. S. 595, 599 (1958) . Congress responded
by imposing civil and criminal liability for 10 types of fraud on
the Government, subjecting violators to double damages, forfeiture,
and up to five years’ imprisonment. Act of Mar. 2, 1863, ch. 67,
12Stat. 696.
Since then, Congress has repeatedly amended the
Act, but its focus remains on those who present or directly induce
the submission of false or fraudulent claims. See 31
U. S. C. §3729(a) (imposing civil liability on “any
person who . . . knowingly presents, or causes to be
presented, a false or fraudulent claim for payment or approval”). A
“claim” now includes direct requests to the Government for payment
as well as reimbursement requests made to the recipients of federal
funds under federal benefits programs. See §3729(b)(2)(A). The
Act’s scienter requirement defines “knowing” and “knowingly” to
mean that a person has “actual knowledge of the information,” “acts
in deliberate ignorance of the truth or falsity of the
information,” or “acts in reckless disregard of the truth or
falsity of the information.” §3729(b)(1)(A). And the Act defines
“material” to mean “having a natural tendency to influence, or be
capable of influencing, the payment or receipt of money or
property.” §3729(b)(4).
Congress also has increased the Act’s civil
penalties so that liability is “essentially punitive in nature.”
Vermont Agency of Natural Resources v.
United States ex
rel. Stevens, 529 U. S. 765, 784 (2000) . Defendants are
subjected to treble damages plus civil penalties of up to $10,000
per false claim. §3729(a); 28 CFR §85.3(a)(9) (2015) (adjusting
penalties for inflation).
B
The alleged False Claims Act violations here
arose within the Medicaid program, a joint state-federal program in
which healthcare providers serve poor or disabled patients and
submit claims for government reimbursement. See generally 42
U. S. C. §1396
et seq. The facts recited in
the complaint, which we take as true at this stage, are as follows.
For five years, Yarushka Rivera, a teenage beneficiary of
Massachusetts’ Medicaid program, received counseling services at
Arbour Counseling Services, a satellite mental health facility in
Lawrence, Massa-chusetts, owned and operated by a subsidiary of
peti-tioner Universal Health Services. Beginning in 2004, when
Yarushka started having behavioral problems, five medical
professionals at Arbour intermittently treated her. In May 2009,
Yarushka had an adverse reaction to a medication that a purported
doctor at Arbour prescribed after diagnosing her with bipolar
disorder. Her condition worsened; she suffered a seizure that
required hospitalization. In October 2009, she suffered another
seizure and died. She was 17 years old.
Thereafter, an Arbour counselor revealed to
respondents Carmen Correa and Julio Escobar—Yarushka’s mother and
stepfather—that few Arbour employees were actually licensed to
provide mental health counseling and that supervision of them was
minimal. Respondents discovered that, of the five professionals who
had treated Yarushka, only one was properly licensed. The
practitioner who diagnosed Yarushka as bipolar identified herself
as a psychologist with a Ph. D., but failed to mention that her
degree came from an unaccredited Internet college and that
Massachusetts had rejected her application to be licensed as a
psychologist. Likewise, the practitioner who prescribed medicine to
Yarushka, and who was held out as a psychiatrist, was in fact a
nurse who lacked authority to prescribe medications absent
supervision. Rather than ensuring supervision of unlicensed staff,
the clinic’s director helped to misrepresent the staff’s
qualifications. And the problem went beyond those who treated
Yarushka. Some 23 Arbour employees lacked licenses to provide
mental health services, yet—despite regulatory requirements to the
contrary—they counseled patients and prescribed drugs without
supervision.
When submitting reimbursement claims, Arbour
used payment codes corresponding to different services that its
staff provided to Yaruskha, such as “Individual Therapy” and
“family therapy.” 1 App. 19, 20. Staff members also misrepresented
their qualifications and licensing status to the Federal Government
to obtain individual National Provider Identification numbers,
which are submitted in connection with Medicaid reimbursement
claims and correspond to specific job titles. For instance, one
Arbour staff member who treated Yaruskha registered for a number
associated with “ ‘Social Worker, Clinical,’ ” despite
lacking the credentials and licensing required for social workers
engaged in mental health counseling. 1
id., at 32.
After researching Arbour’s operations,
respondents filed complaints with various Massachusetts agencies.
Massachusetts investigated and ultimately issued a report detailing
Arbour’s violation of over a dozen Massachusetts Medicaid
regulations governing the qualifications and supervision required
for staff at mental health facili-ties. Arbour agreed to a remedial
plan, and two Arbour employees also entered into consent agreements
with Massachusetts.
In 2011, respondents filed a
qui tam
suit in federal court, see 31 U. S. C. §3730, alleging
that Universal Health had violated the False Claims Act under an
implied false certification theory of liability. The operative
complaint asserts that Universal Health (acting through Arbour)
submitted reimbursement claims that made representations about the
specific services provided by specific types of professionals, but
that failed to disclose serious violations of regulations
pertaining to staff qualifications and licensing requirements for
these services.[
1]
Specifically, the Massachusetts Medicaid program requires satellite
facilities to have specific types of clinicians on staff,
delineates licensing requirements for particular positions (like
psychiatrists, social workers, and nurses), and details supervision
requirements for other staff. See 130 Code Mass. Regs.
§§429.422–424, 429.439 (2014). Universal Health allegedly flouted
these regulations because Arbour employed unqualified, unlicensed,
and unsupervised staff. The Massachusetts Medicaid program, unaware
of these deficiencies, paid the claims. Universal Health thus
allegedly defrauded the program, which would not have reimbursed
the claims had it known that it was billed for mental health
services that were performed by unlicensed and unsupervised staff.
The United States declined to intervene.
The District Court granted Universal Health’s
motion to dismiss the complaint. Circuit precedent had previously
embraced the implied false certification theory of liability. See,
e.g.,
United States ex rel. Hutcheson v.
Blackstone Medical, Inc., 647 F. 3d 377, 385–387 (CA1
2011). But the District Court held that respondents had failed to
state a claim under that theory because, with one exception not
relevant here, none of the regulations that Arbour violated was a
condition of payment. See 2014 WL 1271757, *1, *6–*12 (D Mass.,
Mar. 26, 2014).
The United States Court of Appeals for the First
Circuit reversed in relevant part and remanded. 780 F. 3d 504,
517 (2015). The court observed that each time a billing party
submits a claim, it “implicitly communicate[s] that it conformed to
the relevant program requirements, such that it was entitled to
payment.”
Id., at 514, n. 14. To determine whether a
claim is “false or fraudulent” based on such implicit
communications, the court explained, it “asks simply whether the
defendant, in submitting a claim for reimbursement, knowingly
misrepresented compliance with a material precondition of payment.”
Id., at 512. In the court’s view, a statutory, regulatory,
or contractual requirement can be a condition of payment either by
expressly identifying itself as such or by implication.
Id.,
at 512–513. The court then held that Universal Health had violated
Massachusetts Medicaid regulations that “clearly impose conditions
of payment.”
Id., at 513. The court further held that the
regulations themselves “constitute[d] dispositive evidence of
materiality,” because they identified adequate supervision as an
“express and absolute” condition of payment and “repeated[ly]
reference[d]” supervision.
Id., at 514 (internal quotation
marks omitted).
We granted certiorari to resolve the
disagreement among the Courts of Appeals over the validity and
scope of the implied false certification theory of liability. 577
U. S. ___ (2015). The Seventh Circuit has rejected this
theory, reasoning that only express (or affirmative) falsehoods can
render a claim “false or fraudulent” under 31 U. S. C.
§3729(a)(1)(A).
United States v.
Sanford-Brown, Ltd.,
788 F. 3d 696, 711–712 (2015). Other courts have accepted the
theory, but limit its application to cases where defendants fail to
disclose violations of expressly designated conditions of payment.
E.g., Mikes v.
Straus, 274 F. 3d 687, 700 (CA2
2011). Yet others hold that conditions of payment need not be
expressly designated as such to be a basis for False Claims Act
liability.
E.g., United States v.
Science
Applications Int’l Corp., 626 F. 3d 1257, 1269 (CADC 2010)
(
SAIC).
II
We first hold that the implied false
certification theory can, at least in some circumstances, provide a
basis for liability. By punishing defendants who submit “false or
fraudulent claims,” the False Claims Act encompasses claims that
make fraudulent misrepresentations, which include certain
misleading omissions. When, as here, a defendant makes
representations in submitting a claim but omits its violations of
statutory, regulatory, or contractual requirements, those omissions
can be a basis for liability if they render the defendant’s
representations misleading with respect to the goods or services
provided.
To reach this conclusion, “[w]e start, as
always, with the language of the statute.”
Allison Engine
Co. v.
United States ex rel. Sanders, 553 U. S.
662, 668 (2008) (brackets in original; internal quotation marks
omitted). The False Claims Act imposes civil liability on “any
person who . . . knowingly presents, or causes to be
presented, a falseor fraudulent claim for payment or approval.”
§3729(a)(1)(A). Congress did not define what makes a claim “false”
or “fraudulent.” But “[i]t is a settled principle of interpretation
that, absent other indication, Congress intends to incorporate the
well-settled meaning of the common-law terms it uses.”
Sekhar v.
United States, 570 U. S. ___, ___
(2013) (slip op., at 3) (internal quotation marks omitted). And the
term “fraudulent” is a paradigmatic example of a statutory term
that incorporates the common-law meaning of fraud. See
Neder
v.
United States, 527 U. S. 1, 22 (1999) (the term
“actionable ‘fraud’” is one with “a well-settled meaning at common
law”).[
2]
Because common-law fraud has long encompassed
certain misrepresentations by omission, “false or fraudulent
claims” include more than just claims containing express
falsehoods. The parties and the Government agree that
misrepresentations by omission can give rise to liability. Brief
for Petitioner 30–31; Brief for Respondents 22–31; Brief for United
States as
Amicus Curiae 16–20.
The parties instead dispute whether submitting a
claim without disclosing violations of statutory, regulatory, or
contractual requirements constitutes such an actionable
misrepresentation. Respondents and the Government invoke the
common-law rule that, while nondisclosure alone ordinarily is not
actionable, “[a] representation stating the truth so far as it goes
but which the maker knows or believes to be materially misleading
because of his failure to state additional or qualifying matter” is
actionable. Restatement (Second) of Torts §529, p. 62 (1976). They
contend that every submission of a claim for payment implicitly
represents that the claimant is legally entitled to payment, and
that failing to disclose violations of material legal requirements
renders the claim misleading. Universal Health, on the other hand,
argues that submitting a claim involves no representations, and
that a different common-law rule thus governs: nondisclosure of
legal violations is not actionable absent a special “ ‘duty
. . . to exercise reasonable care to disclose the matter
in question,’ ” which it says is lacking in Government
contracting. Brief for Petitioner 31 (quoting Restatement (Second)
of Torts §551(1), at 119).
We need not resolve whether all claims for
payment implicitly represent that the billing party is legally
entitled to payment. The claims in this case do more than merely
demand payment. They fall squarely within the rule that
half-truths—representations that state the truth only so far as it
goes, while omitting critical qualifying information—can be
actionable misrepresentations.[
3] A classic example of an actionable half-truth in
contract law is the seller who reveals that there may be two new
roads near a property he is selling, but fails to disclose that a
third potential road might bisect the property. See
Junius
Constr. Co. v.
Cohen, 257 N. Y. 393, 400, 178
N. E. 672, 674 (1931) (Cardozo, J.). “The enumeration of two
streets, described as unopened but projected, was a tacit
representation that the land to be conveyed was subject to no
others, and certainly subject to no others materially affecting the
value of the purchase.”
Ibid. Likewise, an applicant for an
adjunct position at a local college makes an actionable
misrepresentation when his resume lists prior jobs and then
retirement, but fails to disclose that his “retirement” was a
prison stint for perpetrating a $12 million bank fraud. See 3 D.
Dobbs, P. Hayden, & H. Bublick, Law of Torts §682, pp. 702–703,
and n. 14 (2d ed. 2011) (citing
Sarvis v.
Vermont State
Colleges, 172 Vt. 76, 78, 80–82, 772 A. 2d 494, 496,
497–499 (2001)).
So too here, by submitting claims for payment
using payment codes that corresponded to specific counseling
services, Universal Health represented that it had pro-vided
individual therapy, family therapy, preventive medica-tion
counseling, and other types of treatment. Moreover, Arbour staff
members allegedly made further representations in submitting
Medicaid reimbursement claims by using National Provider
Identification numbers corresponding to specific job titles. And
these representations were clearly misleading in context. Anyone
informed that a social worker at a Massachusetts mental health
clinic provided a teenage patient with individual counseling
services would probably—but wrongly—conclude that the clinic had
complied with core Massachusetts Medicaid requirements (1) that a
counselor “treating children [is] required to have specialized
training and experience in children’s services,” 130 Code Mass.
Regs. §429.422, and also (2) that, at a minimum, the social worker
possesses the prescribed qualifications for the job, §429.424(C).
By using payment and other codes that conveyed this information
without disclosing Arbour’s many violations of basic staff and
licensing requirements for mental health facilities, Universal
Health’s claims constituted misrepresentations.
Accordingly, we hold that the implied
certification theory can be a basis for liability, at least where
two conditions are satisfied: first, the claim does not merely
request payment, but also makes specific representations about the
goods or services provided; and second, the defendant’s failure to
disclose noncompliance with material statutory, regulatory, or
contractual requirements makes those representations misleading
half-truths.[
4]
III
The second question presented is whether, as
Universal Health urges, a defendant should face False Claims Act
liability only if it fails to disclose the violation of a
contractual, statutory, or regulatory provision that the Government
expressly designated a condition of payment. We conclude that the
Act does not impose this limit on liability. But we also conclude
that not every undisclosed violation of an express condition of
payment automatically triggers liability. Whether a provision is
labeled a condition of payment is relevant to but not dispositive
of the materiality inquiry.
A
Nothing in the text of the False Claims Act
sup-ports Universal Health’s proposed restriction. Section
3729(a)(1)(A) imposes liability on those who present “false or
fraudulent claims” but does not limit such claims to
misrepresentations about express conditions of payment. See
SAIC, 626 F. 3d, at 1268 (rejecting any textual basis
for an express-designation rule). Nor does the common-law meaning
of fraud tether liability to violating an express condition of
payment. A statement that misleadingly omits critical facts is a
misrepresentation irrespective of whether the other party has
expressly signaled the importance of the qualifying information.
Supra, at 9–11.
The False Claims Act’s materiality requirement
also does not support Universal Health. Under the Act, the
misrepresentation must be material to the other party’s course of
action. But, as discussed below, see
infra, at 15–17,
statutory, regulatory, and contractual requirements are not
automatically material, even if they are labeled conditions of
payment. Cf.
Matrixx Initiatives, Inc. v.
Siracusano,
563 U. S. 27, 39 (2011) (materiality cannot rest on “a single
fact or occurrence as always determinative” (internal quotation
marks omitted)).
Nor does the Act’s scienter requirement,
§3729(b)(1)(A), support Universal Health’s position. A defendant
can have “actual knowledge” that a condition is material without
the Government expressly calling it a condition of payment. If the
Government failed to specify that guns it orders must actually
shoot, but the defendant knows that the Government routinely
rescinds contracts if the guns do not shoot, the defendant has
“actual knowledge.” Likewise, because a reasonable person would
realize the imperative of a functioning firearm, a defendant’s
failure to appreciate the materiality of that condition would
amount to “deliberate ignorance” or “reckless disregard” of the
“truth or falsity of the information” even if the Government did
not spell this out.
Universal Health nonetheless contends that False
Claims Act liability should be limited to undisclosed violations of
expressly designated conditions of payment to provide defendants
with fair notice and to cabin liability. But policy arguments
cannot supersede the clear statutory text.
Kloeckner v.
Solis, 568 U. S. ___, ___–___, n. 4 (2012) (slip op.,
at 13–14, n. 4). In any event, Universal Health’s approach
risks undercutting these policy goals. The Government might respond
by designating every legal requirement an express condition of
payment. But billing parties are often subject to thousands of
complex statutory and regulatory provisions. Facing False Claims
Act liability for violating any of them would hardly help would-be
defendants anticipate and prioritize compliance obligations. And
forcing the Government to expressly designate a provision as a
condition of
payment would create further arbitrariness.
Under Universal Health’s view, misrepresenting compliance with a
requirement that the Government expressly identified as a condition
of payment could expose a defendant to liability. Yet, under this
theory, misrepresenting compliance with a condition of eligibility
to even participate in a federal program when submitting a claim
would not.
Moreover, other parts of the False Claims Act
allay Universal Health’s concerns. “[I]nstead of adopting a
circumscribed view of what it means for a claim to be false or
fraudulent,” concerns about fair notice and open-ended liability
“can be effectively addressed through strict enforcement of the
Act’s materiality and scienter requirements.”
SAIC,
supra, at 1270. Those requirements are rigorous.
B
As noted, a misrepresentation about compliance
with a statutory, regulatory, or contractual requirement must be
material to the Government’s payment decision in order to be
actionable under the False Claims Act. We now clarify how that
materiality requirement should be enforced.
Section 3729(b)(4) defines materiality using
language that we have employed to define materiality in other
federal fraud statutes: “[T]he term ‘material’ means having a
natural tendency to influence, or be capable of influencing, the
payment or receipt of money or property.” See
Neder, 527
U. S.
, at 16 (using this definition to interpret the
mail, bank, and wire fraud statutes);
Kungys v.
United
States, 485 U. S. 759, 770 (1988) (same for fraudulent
statements to immigration officials). This materiality requirement
descends from “common-law antecedents.”
Id., at 769. Indeed,
“the common law could not have conceived of ‘fraud’ without proof
of materiality.”
Neder,
supra, at 22; see also Brief
for United States as
Amicus Curiae 30 (describing common-law
principles and arguing that materiality under the False Claims Act
should involve a “similar approach”).
We need not decide whether §3729(a)(1)(A)’s
materiality requirement is governed by §3729(b)(4) or derived
directly from the common law. Under any understanding of the
concept, materiality “look[s] to the effect on the likely or actual
behavior of the recipient of the alleged misrepresentation.” 26 R.
Lord, Williston on Contracts §69:12, p. 549 (4th ed. 2003)
(Williston). In tort law, for instance, a “matter is material” in
only two circumstances: (1) “[if ] a reasonable man would
attach importance to [it] in determining his choice of action in
the transaction”; or (2) if the defendant knew or had reason to
know that the recipient of the representation attaches importance
to the specific matter “in determining his choice of action,” even
though a reasonable person would not. Restatement (Second) of Torts
§538, at 80. Materiality in contract law is substantially similar.
See Restatement (Second) of Contracts §162(2), and Comment
c, pp. 439, 441 (1979) (“[A] misrepresentation is material”
only if it would “likely . . . induce a reasonable person
to manifest his assent,” or the defendant “knows that for some
special reason [the representation] is likely to induce the
particular recipient to manifest his assent” to the
transaction).[
5]
The materiality standard is demanding. The False
Claims Act is not “an all-purpose antifraud statute,”
Allison
Engine, 553 U. S., at 672, or a vehicle for punishing
garden-variety breaches of contract or regulatory violations. A
misrepresentation cannot be deemed material merely because the
Government designates compliance with a particular statutory,
regulatory, or contractual requirement as a condition of payment.
Nor is it sufficient for a finding of materiality that the
Government would have the option to decline to pay if it knew of
the defendant’s noncompliance. Materiality, in addition, cannot be
found where noncompliance is minor or insubstantial. See
United
States ex rel. Marcus v.
Hess, 317
U. S. 537, 543 (1943) (contractors’ misrepresentation that
they satisfied a non-collusive bidding requirement for federal
program contracts violated the False Claims Act because “[t]he
government’s money would never have been placed in the joint fund
for payment to respondents had its agents known the bids were
collusive”); see also
Junius Constr., 257 N. Y., at
400, 178 N. E., at 674 (an undisclosed fact was material
because “[n]o one can say with reason that the plaintiff would have
signed this contract if informed of the likelihood” of the
undisclosed fact).
In sum, when evaluating materiality under the
False Claims Act, the Government’s decision to expressly iden-tify
a provision as a condition of payment is relevant, but not
automatically dispositive. Likewise, proof of materiality can
include, but is not necessarily limited to, evidence that the
defendant knows that the Government consis-tently refuses to pay
claims in the mine run of cases based on noncompliance with the
particular statutory, regulatory, or contractual requirement.
Conversely, if the Government pays a particular claim in full
despite its actual knowledge that certain requirements were
violated, that is very strong evidence that those requirements are
not material. Or, if the Government regularly pays a particular
type of claim in full despite actual knowledge that certain
requirements were violated, and has signaled no change in position,
that is strong evidence that the requirements are not
material.[
6]
These rules lead us to disagree with the
Government’s and First Circuit’s view of materiality: that any
statutory, regulatory, or contractual violation is material so long
as the defendant knows that the Government would be entitled to
refuse payment were it aware of the violation. See Brief for United
States as
Amicus Curiae 30; Tr. of Oral Arg. 43
(Government’s “test” for materiality “is whether the person knew
that the government could lawfully withhold payment”); 780
F. 3d, at 514; see also Tr. of Oral Arg. 26, 29 (statements by
respondents’ counsel endorsing this view). At oral argument, the
United States explained the implications of its position: If the
Government contracts for health services and adds a requirement
that contractors buy American-made staplers, anyone who submits a
claim for those services but fails to disclose its use of foreign
staplers violates the False Claims Act. To the Government,
liability would attach if the defendant’s use of foreign staplers
would entitle the Government not to pay the claim in whole or
part—irrespective of whether the Government routinely pays claims
despite knowing that foreign staplers were used.
Id., at
39–45. Likewise, if the Government required contractors to aver
their compliance with the entire U. S. Code and Code of
Federal Regulations, then under this view, failing to mention
noncompliance with any of those requirements would always be
material. The False Claims Act does not adopt such an
extraordinarily expansive view of liability.
* * *
Because both opinions below assessed
respondents’ complaint based on interpretations of §3729(a)(1)(A)
that differ from ours, we vacate the First Circuit’s judgment and
remand the case for reconsideration of whether respondents have
sufficiently pleaded a False Claims Act violation. See
Omnicare,
Inc. v.
Laborers Dist. Council Constr. Industry Pension
Fund, 575 U. S. ___, ___ (2015) (slip op., at 19). We
emphasize, however, that the False Claims Act is not a means of
imposing treble damages and other penalties for insignificant
regulatory or contractual violations. This case centers on
allegations of fraud, not medical malpractice. Respondents have
alleged that Universal Health misrepresented its compliance with
mental health facility requirements that are so central to the
provision of mental health counseling that the Medicaid program
would not have paid these claims had it known of these violations.
Respondents may well have adequately pleaded a violation of
§3729(a)(1)(A). But we leave it to the courts below to resolve this
in the first instance.
The judgment of the Court of Appeals is vacated,
and the case is remanded for further proceedings consistent with
this opinion.
It is so ordered.
