In order to state a cognizable claim under the False Claims Act (“FCA”) on a false certification theory, a plaintiff must allege that a defendant failed to comply with a federal statute or regulation that was a “condition of payment” from the federal government. The Third Circuit Court of Appeals has held that violations of “conditions of payment” can result in liability under the FCA. In contrast, “conditions of participation” result in administrative sanctions rather than liability under the FCA. See United States ex rel. Wilkins v. United Health Care Grp., Inc., 659 F.3d 295 (3d Cir. 2011).

Using this rationale, a federal judge in New Jersey recently ruled that submission of an accurate hospice eligible patient certification is a “condition of payment” under the FCA, as the regulations provide that the hospice certifications “must conform” to certain requirements or the hospice care provider may not be paid. Druding v. Care Alternatives, Inc., No. CV 08-2126 (JBS/AMD), 2016 WL 727116 (D.N.J. Feb. 22, 2016). The defendant argued that the regulation regarding eligible patient certification was a “condition of participation” because it was labeled as such. The Court disagreed holding that, notwithstanding the label, a provider would be denied payment without the certification.