United States v. Krizek

Brief Fact Summary. The Government (Plaintiff) brought suit against the Krizeks (Defendants), a psychiatrist and his wife, for violating the False Claims Act by overbilling.

Synopsis of Rule of Law. A violation of the False Claims Act for “knowingly” filing false claims may be established without reference to the subjective intent of the defendant.

Facts. The Krizeks (Defendants) requested reimbursement for patient treatment under the Medicare/Medicaid program.  The Government (Plaintiff) sued Defendants under common law and the False Claims Act.  The Defendants were found liable by the district court for knowingly submitting false claims and judgment was entered against them for $168,105.  A cross-appeal was filed by Defendants, claiming that the district court had assessed civil penalties based on erroneous standards as to whether the defendants filed one claim or many.  The court turned to an inquiry on the specific conduct of the defendants to determine whether multiple false claims had been filed.

Issue. May a violation of the False Claims Act for “knowingly” filing false claims be established without reference to the subjective intent of the defendant?

Held. (Sentelle, J.)  Yes.  A violation of the False Claims Act for “knowingly” filing false claims may be established without reference to the subjective intent of the defendant.  A person acts knowingly if he 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.  Dr. Krizek (Defendant) delegated the authority to his wife to submit claims on his behalf.  In completely failing to review the false submissions, he acted with reckless disregard.  The district court erred in its calculation of the civil penalty.  Reversed and remanded.

Discussion. The court in this case found that the district court’s determination that the Krizeks (Defendants) had acted with reckless disregard was sufficiently supported by the evidence.  The doctor was equally as liable as his wife.  Their actions rose to the level of reckless disregard because there was little or no factual basis to multiple submissions.