On February 21, 2025, the Supreme Court unanimously held that requests for reimbursement from a privately administered fund qualified as “claims” under the False Claims Act (FCA) because the government “provide[d]” a “portion” of the fund’s money.¹ This alert summarizes the decision in Wisconsin Bell, Inc. v. United States ex rel. Heath and its potential implications for other public-private programs.

Summary of the Opinion

The case involved the Education-Rate (E-Rate) program, which was established under the Telecommunications Act of 1996 to subsidize internet and telecommunications services for schools and libraries across the United States.² Under the program, telecommunications carriers pay into a fund managed by a private not-for-profit corporation, which collects and distributes money pursuant to regulations by the Federal Communications Commission. Those regulations include the “lowest corresponding price” rule, which prohibits carriers from charging schools and libraries more than they would charge a “similarly situated” customer.³ Once a price is set, a school or library can pay the full price and seek reimbursement from the fund, or pay the discounted price, leaving the carrier to seek reimbursement from the fund.

The relator alleged that Wisconsin Bell violated the FCA by systematically charging schools higher rates than those offered to “similarly situated” customers.⁴  Wisconsin Bell moved to dismiss on the ground that E-Rate reimbursement requests do not qualify as “claims” under the FCA.  The FCA defines the term “claim” as a request for money that either (1) “is presented” to the government or its “agent” or (2) is made to another recipient of federal funds (i.e., a non-governmental entity) ‌whenever the government itself “provides any portion of the money requested."⁵ Wisconsin Bell argued that (1) all of the money involved was provided by the carriers, not the government, and (2) the reimbursement requests were never presented to the government but only to the fund’s private third-party administrator.⁶

The district court denied Wisconsin Bell’s motion to dismiss.⁷ On appeal, the Seventh Circuit held that the E-Rate reimbursement requests satisfy the “government money” prong of the FCA’s definition of “claim” for two reasons: First, the government provided at least a “portion” of the money for the E-Rate program by directly depositing $100 million into the fund. Second, the government provided all the money by exercising regulatory control over the E-Rate program, including by requiring carriers to contribute to the fund. In any event, the Seventh Circuit further held, the fund administrator is the government’s agent, and the carriers’ reimbursement requests therefore satisfied the “presentation” prong of the FCA’s definition of “claim,” ‌‌regardless of who provided the money for the E-Rate program.⁸

In an opinion by Justice Elena Kagan, the Supreme Court affirmed the decision only on the first—and narrowest—ground, holding that E-Rate reimbursement requests constitute “claims” under the FCA because the government provided a “portion of the money.”⁹ Specifically, the Court reasoned that during the relevant period, approximately $100 million of the program’s funding came from the U.S. Treasury, sourced from delinquent contributions, settlement awards, and restitution payments related to the E-Rate program.¹⁰ The fact that the government kept this money in the U.S. Treasury, and then “supplied, furnished, or made [it] available” to reimburse program participants, was sufficient for FCA purposes.¹¹ As the Court put it, “[i]t is a simple matter, as the saying goes, of following the money.”¹² The government’s own collection of money and transfer of that money to the fund was enough for the Court to conclude that at least part of the fund was, in fact, “provided” by the government.

Key Takeaways

The Court’s definition of what constitutes a “claim” for FCA purposes could affect other government programs that combine public and private funding, even when the government’s financial contribution is minimal. Following the Supreme Court’s decision, entities participating in such programs may face increased liability under the FCA, specifically if the government plays a role in collecting, maintaining, or distributing any amount of the funds.

The decision is also notable for the many key questions regarding the FCA it left unresolved.

• First, the Court did not reach whether a private administrator like the one that oversees the fund here is an “agent” of the government or whether the government provides all E-Rate funds by exercising regulatory control over the program. Because the Court found that the “portion” from the Treasury was sufficient to meet the “money” prong of the statutory definition, it expressly declined to determine whether the private third-party administrator qualifies as an “agent of the United States” for purposes of the “presentation” prong or whether regulatory control plays a role in assessing precisely what amount of “money” the government has “provided” under the program.
• Second, the Court left unresolved whether its holding extends to programs in which the government acts solely as a “passive throughway” for funds. While the Court rejected Wisconsin Bell’s claim that the U.S. Treasury functioned as a mere “passthrough,” Justice Clarence Thomas’s concurrence emphasized that the Court’s holding did not establish that the government “provides” funds to a program when it simply acts as a passive conduit by transferring money without generating any portion of it. Given the majority’s statement that “a simple intermediary can sometimes also ‘provide’ things to a recipient,”¹³ lower courts will need to determine when the involvement of a government intermediary is sufficient to subject money in private-public partnerships to the FCA.
• Third, the Court likewise left for the lower courts the task of determining what impact its ruling would have on potential damages. At argument, the parties pressed the Court to decide the case on one of the broader grounds at issue in part to avoid disputes on remand about whether any damages should be limited to the amount of money provided by the government. Acknowledging that “issues about damages may well emerge” if the relator prevails, the Court declined to reach those issues on the present record.¹⁴
• Finally, the Court did not address the constitutionality of the FCA’s qui tam provisions, ‌which are what allow private parties like the relator here to pursue FCA violations on the government’s behalf in exchange for a share of any monetary recovery. But Justice Brett Kavanaugh (joined by Justice Thomas) wrote separately to reiterate earlier-expressed views that those provisions pose substantial constitutional questions that the Court should take up in an appropriate case,¹⁵ and the issue is currently pending on appeal before the Eleventh Circuit in United States ex rel. Zafirov v. Florida Medical Associates, LLC.¹⁶

Our team of experienced litigators and counselors is available to provide legal counseling regarding the FCA and legal developments in this area.