Pleading Healthcare Fraud and Abuse Rule 9b 12 b 6 Merritt Rose 05 13

62 • The Federal Lawyer • May 2013
The healthcare industry alone accounted for over $9.5
billion in recoveries by the U.S. Department of Justice
from Jan. 2009–Sept. 2012. Although the False Claims
Act dates to the Civil War, the explosion of these types of
cases is a more recent phenomenon—in FY 2012, the DOJ
recovered nearly $5 billion; however, very specific pleading
standards must be met, or the case is subject to dismissal
on motion of the defendant.
by Martin Merritt and Rachel V. Rose
Pleading “Healthcare Fraud
and Abuse”

May 2013 • The Federal Lawyer • 63
T
he False Claims Act (FCA)1
is the
government’s primary antifraud litiga-
tion statute.2
The healthcare indus-
try alone accounted for over $9.5 billion in
recoveries by the U.S. Department of Justice
(DOJ) from January 2009 through September
2012.3
Although the FCA dates to the Civil
War, the explosion of these types of cases
is a more recent phenomenon.4
In the early
1990s, the Office of the Inspector General
(OIG) began cracking down on Stark Law
and Anti-Kickback Statute violations with
greater frequency.5
Actions by private per-
sons, which are authorized under the FCA
to file qui tam (whistleblower) cases under
31 U.S.C. § 3730, also began to grow to the
point that whistleblower actions now account
for the lion’s share of FCA litigation.6
As a
December 2012 DOJ press release indicated,
the recoveries can be astronomical—in fiscal
year (FY) 2012, the DOJ recovered nearly $5
billion7
; however, very specific pleading stan-
dards must be met, or the case is subject to
dismissal on motion of the defendant.
The FCA is a litigation statute, which is distinct from other
fraud and abuse statutes such as the Civil Monetary Penalties
Law in two important ways: (1) FCA cases will always be pros-
ecuted in federal court, where the express language of a statute
will be strictly construed8
in accordance with the rules of civil
procedure9
; and (2) unlike the four other major Medicare fraud
and abuse statutes (Stark Law, the Anti-Kickback Statute,
Civil Monetary Penalties Law (CMPL), and the Exclusionary
Statute), Congress did not “enable” the so-called alphabet agen-
cies (e.g., the U.S. Department of Health and Human Services
(HHS), Centers for Medicare and Medicaid Services (CMS),
DOJ, and the OIG) to adopt U.S. Code of Federal Regulations
concerning the FCA.10
Although the FCA appears quite similar
to the CMPL, it is not subject to administrative modification in
the Code of Federal Regulations or the Federal Register.11
Interpretation of the elements of the FCA, if any, must come
from the courts, or amendments to the Act by Congress. For
example, the complete revision of the public “disclosure bar”
under 31 U.S.C. § 3730(e)(4)12
does not address “retroactivity.”
If Congress had enabled administrative rulemaking for the FCA,
“retroactivity” could be addressed without additional acts of
Congress. Unlike the other four major fraud and abuse statutes,
modifications to the FCA are few and far between. It took 20
years of “misguided judicial decisions”13
before Congress finally
acted in the Fraud Enforcement and Recovery Act (FERA)
of 2009 in which Congress amended multiple FCA provisions,
including:
• Imposing liability for knowingly or recklessly retaining over-
payments from the government, regardless of the present-
ment of a false statement, thereby expanding liability for
“reverse” false claims;
• Creating liability for claims presented to entities administer-
ing government funds;
• Enabling the DOJ to conduct longer investigations by allow-
ing the governments complaint to relate back to the filing of
the relator’s complaint; and
• Expanding the anti-retaliation provisions to also cover con-
tractors and agents.14
Hence, initiation of FCA enforcement action is left to qui
Under the False Claims Act
Surviving Rule 9(b) and Rule 12(b)(6)
Motions to Dismiss

tam relators and the DOJ acting under the executive branch.
Interpretation of what Congress intended, if any, is left to the
courts. Revision of the express wording of the text of the FCA is
a power granted exclusively to Congress by the U.S. Constitution.
Meeting the Pleading Threshold
The FCA is concerned with “protecting the federal fisc by
imposing severe penalties on those whose false or fraudulent claims
cause the government to pay money.” United States ex rel. Vigil
v. Nelnet, Inc.15
“Without sufficient allegations of materially false
claims, an FCA complaint fails to state a claim on which relief can be
granted.”16
The focus is thus on the alleged false claims, as the FCA
“attaches liability, not to the underlying fraudulent activity, but to
the ‘claim for payment.’”17
As a Pennsylvania U.S. district court recently observed:
Before FERA, § 3729(a)(2) stated that liability attaches when
a defendant “knowingly makes, uses, or causes to be made or
used, a false record or statement to get a false or fraudu-
lent claim paid or approved by the Government.” 31 U.S.C.
§ 3729(a)(2) (1994) (emphasis added). The post-FERA
version of the provision (now § 3729(a)(1)(B)) states that
liability exists for any person who “knowingly makes, uses, or
causes to be made or used, a false record or statement mate-
rial to a false or fraudulent claim.” 31 U.S.C. § 3729(a)(1)
(B) (emphasis added). The new version broadens the intent
required to trigger liability, because it creates the possibility
of FCA liability even where a false statement or records is not
made “for the purpose” of getting a false or fraudulent claim
paid or approved by the federal government.”18
Therefore, in order to establish a prima facie FCA claim under
§ 3729(a)(1), a plaintiff “must prove that ‘(1) defendant presented
or caused to be presented to an agent of the United States a claim
for payment’; (2) the claim was false or fraudulent; and (3) the
defendant knew the claim was false or fraudulent.”19
Claims have
been classified into the following categories: factually false/worth-
less services theory; legally false; and legally false by implied cer-
tification.20
These categories are reflective of the FCA’s legislative
history, whereby: “A false claim may take many forms, the most
common being a claim for goods or services not provided or pro-
vided in violation of contract terms, specification, statute or regu-
lation.”21
Factually false claims occur when the submission for pay-
ment is based on goods not delivered or services not performed.22
The U.S. Court of Appeals for the Third Circuit, in United States ex
rel. Wilkins v. United Health Group., Inc., acting in accordance
with other circuits, recognized and delineated between express and
implied legally false claims.23
Under the “express false certification” [legally false] theory,
an entity is liable under the FCA for falsely certifying that it is in
compliance with regulations which are prerequisites to government
payment in connection with the claim for payment of federal funds.
Additionally, there is an “implied false certification” theory which
occurs “when a claimant seeks and makes a claim for payment
from the government without disclosing that it violated regulations
that affected its eligibility for payment.” Basically indicating, “it[’s]
premised ‘on the notion that the act of submitting a claim for reim-
bursement itself implies compliance with governing federal rules
that are a precondition to payment.’”24
A fundamental example of a FCA cause of action under the
legally false/express false certification theory is a claim submitted
to the Centers for Medicare and Medicaid for payment with the
terms and conditions defined by 42 C.F.R. § 424.510(d)(3). As a
requirement of enrolling in Medicare and or Medicaid, providers are
required to sign an enrollment application (Provider Agreement).
Here, the signer, “attests that the information is accurate and that
the provider or supplier is aware of, and abides by, all applicable
statutes, regulations, and program instructions.”25
Recently, the
U.S. Court of Appeals for the First Circuit Court in United States
ex rel. Hutcheson v. Blackstone Medical, Inc.,26
and United States
ex rel. Westmoreland v. Amgen,27
provided express substantiation
for upholding “legally false” claims and disregarding the distinction
between the categories of “express” and “implied,” at least in the
context of the Provider Agreement terms.
Still, regardless of the theory the claim is submitted under, Rule
9(b) heightened requirements must be met. Motions to Dismiss
under Rule 12(b)(6) for failing to meet the heightened pleading
requirements of Rule 9(b) in the FCA cases normally attack the
pleading as deficient to state a claim under 31 U.S.C. § 3729.28
This
section lists the possible causes of action—the “seven deadly sins,”
or the seven things a provider can do to get in trouble. Only four
of these normally pertain to healthcare: (1) presenting a false or
fraudulent claim; (2) using a false statement or record; (3) conspir-
acy; and (4) the reverse false claim.29
Procedurally, the defense will
challenge the pleading of causes of action under 31 U.S.C. § 3729
by way of Rules 9(b) and 12(b)(6) motions—which do not seek to
establish the defendant “didn’t do it,” but instead, that the plaintiff
has incorrectly pled the case.
Pleadings under the FCA must conform to the heightened plead-
ing standard of Rule 9(b), and the pleading standard of Rule 12(b)
(6) as announced by the U.S. Supreme Court in Iqbal and Twombly.
Rule 9(b) requires specific allegations as to “who, what, when,
where, and how” the Act has been violated. Iqbal and Twombly
essentially supplant Rule 8’s “short, plain statement of the case”
with a more rigorous requirement that the facts pled must allege a
plausible cause of action.30
Motions to Dismiss under Rules 9(b) and
12(b)(6) are normally filed together. It is rare to see one without
the other.
Rule 9(b) Motions
It is well established that the heightened pleading require-
ments of Rule 9(b) applies to claims brought under the FCA.31
This
requires pleading what is familiar to journalism 101 students as
“who, what, when, where, why, and how.”32
Although Rule 9(b) may
be satisfied where “some questions remain unanswered [but] the
complaint as a whole is sufficiently particular to pass muster under
the FCA.”33
As the U.S. Court of Appeals for the Fifth Circuit stated,
Rule 9(b) requires “that a plaintiff set forth the ‘who, what, when,
where, and how’ of the alleged fraud.” United States ex rel. Steury
v. Cardinal Health, Inc.34
“Because the linchpin of an FCA claim
is a false claim, the ‘time, place and contents of the false represen-
tations, as well as the identity of the person making the misrepre-
sentation and what that person obtained thereby’ must be stated
in a complaint alleging violation of the FCA in order to satisfy Rule
9(b).” United States ex rel. Rafizadeh v. Continental Common,
Inc.,35
(internal quotations and citation omitted). While fraud must

be pled with particularity, it “may be pleaded without long or highly
detailed particularity.”36
Given the “essentially punitive” nature of the damages available
in FCA cases, “[t]he Supreme Court has cautioned that the False
Claims Act was not designed to punish every type of fraud com-
mitted upon the government.”37
The Act “imposes liability not for
defrauding the government generally; it instead only prohibits a nar-
row species of fraudulent activity: ‘present[ing], or caus[ing] to be
presented … a false or fraudulent claim for payment or approval.’”38
“Therefore, a central question in False Claims Act cases is whether
the defendant ever presented a ‘false or fraudulent claim’ to the gov-
ernment.”39
In the oft-quoted parlance of the U.S. Court of Appeals
for the Eleventh Circuit, “[t]he submission of a [false] claim is … the
sine qua non of a False Claims Act violation.”40
Strict application of Rule 9(b) often poses a significant obstacle
to healthcare qui tam whistleblowers who possess knowledge of an
allegedly unlawful scheme, but cannot name a particular patient
or health claim involved in the scheme.41
Rule 9(b) requires the
complaint to provide, among other fraud specifics, “details con-
cerning the dates of the claims, the content of the forms or bills
submitted, their identification numbers, [and] the amount of money
charged to the government.”42
The rationale was explained by the
U.S. Court of Appeals for the Eighth Circuit in this way: “The [FCA]
is intended to encourage individuals who are either close observers
or involved in the fraudulent activity to come forward, and is not
intended to create windfalls for people with secondhand knowledge
of the wrongdoing.”43
It is generally insufficient to plead a descrip-
tion of a kickback scheme, and then conclude, “fraud must be
occurring.” In United States ex rel. Clausen v. Laboratory Corp.
of America, Inc.,44
the Eleventh Circuit concluded that allegations
regarding a detailed scheme to defraud, absent specific allegations
regarding the actual presentment45
of false claims, fail to satisfy
Rule 9(b)’s particularity requirement.
Nevertheless, the Fifth Circuit has also stated that the “time,
place, contents, and identity standard is not a straitjacket for Rule
9(b),” concluding that Rule 9(b) is context-specific and flexible.46
The Fifth Circuit recently noted that the standard for stating a claim
for relief with particularity is lower in the FCA context than it is in
the securities or common-law fraud contexts.47
As it now stands, a relator must plead as many facts as he or she
is able, including details of the scheme, and either details of actual
claims submitted, or facts providing sufficient indicia of reliability
which reveal how, during the period the relator was employed, the
relator came to know of facts, and which tend to establish the rela-
tor has personal knowledge of the submission of claims.
Rule 12(b)(6) Iqbal/Twombly Motions
Given the applicability of the already heightened pleading
requirement under Rule 9(b) to FCA cases, Iqbal/Twombly’s new
emphasis on pleading facts seems to present little additional burden
in pleading FCA cases. This notwithstanding, motions to dismiss in
FCA cases almost always include both a Rule 9(b) and Rule 12(b)
(6) motion. In order to satisfy Rule 12(b)(6), “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct.
1937, 1 949 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570 (2007). Under Rule 12(b)(6), a defendant bears the burden of
demonstrating that the plaintiff has not stated a claim upon which
relief can be granted. Fed. R. Civ. P. 12(b)(6).
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the
Supreme Court recognized that “a plaintiff’s obligation to provide
the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels
and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Id. at 555. Following these basic dic-
tates, the Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662 (2009),
subsequently defined a two-pronged approach to a court’s review of
a motion to dismiss:
“First, the tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suf-
fice.” Id. at 678. Thus, although “Rule 8 marks a notable and
generous departure from the hyper-technical, code-pleading
regime of a prior era … it does not unlock the doors of discov-
ery for a plaintiff armed with nothing more than conclusions.”
Id. at 678-79.
Second, the Supreme Court emphasized, “only a complaint
that states a plausible claim for relief survives a motion
to dismiss.” Id. at 679. “Determining whether a complaint
states a plausible claim for relief will, as the Court of Appeals
observed, be a context-specific task that requires the review-
ing court to draw on its judicial experience and common
sense.” Id. A complaint does not show an entitlement to relief
when the well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct. Id.
If the Rule 9(b) and/or Rile 12(b)(6) motion(s) are denied, then
the court has effectively handed the “keys to discovery” over to the
parties.48
Rule 15 Motions to Amend
When a motion to dismiss is granted the trial court may, (and
usually will) state whether the dismissal is with, or without preju-
dice to refilling, and if leave to amend is granted, how long the pain-
tiff has to file an amended pleading under Fed. R. Civ. P. Rule 15.
If leave to amend is provided, additional motions to dismiss under
Rules 9(b) and 12(b)(6) will likely follow.49
Leave to amend is not
automatic. Specifically, Rule 15(a) provides that leave to amend
shall be freely given “when justice so requires.” A district court has
the discretion to consider numerous factors in evaluating whether
Given the “essentially punitive” nature of
the damages available in FCA cases, “[t]
he Supreme Court has cautioned that
the False Claims Act was not designed to
punish every type of fraud committed upon
the government.”

to allow amendment, including the futility of amending, the party’s
repeated failure to cure deficiencies by previous amendments,
undue delay, or bad faith.50
Because motions to dismiss are normally granted without a hear-
ing, it is often difficult to know exactly why, or as to which element,
the court found the complaint to be defective. Fighting blindly, rela-
tor’s counsel may mistakenly redouble efforts to state facts already
sufficiently pled. At least one court has held it is possible to say too
much, too incomprehensibly. In United States ex rel. Ellis v. City
of Minneapolis, No. 11-CV-0416 (D. Minn. 2012),51
the trial court
refused an amended complaint in an FCA for lack of compliance
with Rule 8’s “short, plain statement” requirement. “[A] complaint
must include ‘a short and plain statement’ of the claim showing that
the pleader is entitled to relief …. The words ‘short and plain’ are
themselves short and plain, and they mean what they say: A com-
plaint must be concise, and it must be clear.”52
Conclusion
It is well established that Fed. R. Civ. P. 8(a)(2), which requires
a short, plain statement of jurisdiction, the claim, and demand for
relief sought, is an insufficient threshold for an FCA cause of action.
In addition to these basic Iqbal/Twombly requirements, as the courts
have demonstrated, it is imperative that the relator, whether an
individual or the government, meet the heightened pleading require-
ments under Rule 9(b). In short, a pleading as to “whom, what, when,
where, why, and how,” must include plausible factual allegations
as to each link of the 31 U.S.C.§ 3729 chain. This usually requires
pleading “presentment” and/or “materiality” of specific statements
or records involved, or pleading sufficient indicia of reliability that
the pleader has knowledge that certain claims were presented. The
exact pleading requirement often depends upon which version of the
FCA applied when the violation occurred. Only then will a plaintiff’s
allegations survive a defendant’s motion to dismiss under Rule 12(b).
Providing specific information to clear the Rule
9(b) hurdle, as courts have found, meets the
burden of stating a claim upon which relief
can be granted in accordance with the FCA. 
Martin Merritt is a health lawyer based
in Dallas, Texas, whose practice focuses
on representing clients in Stark Law,
the False Claims Act, and governmental
regulation of healthcare. Rachel V. Rose,
JD, MBA, is an attorney based in Houston,
Texas, whose practice focuses on health-
care law and policy, the False Claims Act,
and securities law.
Endnotes
1
31 U.S.C. § 3729-2733.
2
Avco Corp. v. U.S. Dep’t of Justice, 884
F.2d 621, 622 (D.C. Cir. 1989); United States ex rel. Marcy v.
Rowan Cos., 520 F.3d 384, 388 (5th Cir. 2008).
3
Office of Public Affairs, U.S. DOJ, Justice Department Recovers
Nearly $5 Billion in False Claims Act Cases in Fiscal Year 2012 (Dec.
4, 2012), available at www.justice.gov [hereinafter Justice Depart-
ment Recovers Nearly $5 Billion in False Claims Act Cases in Fiscal
Year 2012].
4
The FCA was of little import to the healthcare industry until the
passage in 1965 of Titles XVII and XIX of the Social Security Act,
when the government became an insurer, and private healthcare
providers became government contractors in the care of the elderly
and disabled poor. Until the 1986 Amendments, the FCA contained
impediments which were difficult to overcome. The 1986 Amend-
ments revitalized the Act by significantly expanding the ability of
whistleblowers to receive monetary rewards for prosecuting qui
tam actions against persons who had defrauded the federal govern-
ment. In 2009, Congress passed the Fraud Enforcement and Recov-
ery Act (FERA), the first significant amendment of the FCA since
1986. Not surprisingly, after a generation of litigation under the 1986
Amendments, Congress determined that revisions were necessary
to improve the operation of the FCA. Congress displayed particu-
lar concern about misguided court decisions which, in the opinion
of the Senate Judiciary Committee, were contrary to the intent of
Congress when it passed the 1986 Amendments. FERA primarily
addressed causes of action under 31 U.S.C. § 3729. In 2010 with
the Patient Protection and Affordable Care Act (PPACA), Congress
addressed jurisdictional requirements under § 3730. See Michael
Tabb, The Impact of 2010 Healthcare Legislation on False Claims
Act Litigation (2011), available at www.greenellp.com/wp-content/
uploads/2011/04/Michael-Tabb-PPACA-Amendments.pdf.
5
Participating Medicare and Medicaid providers are government
contractors, subject to strict rules for reimbursement. Providers are
required to sign an agreement, as a condition of participation, that
they have read and understood the rules. See 42 C.F.R. § 424.510(d)
(3). A failure to follow the rules disqualifies a claim for reimburse-
ment, even if the patient actually needed the care provided, and
the charge was completely reasonable. Two such rules are Stark
Law, 42 U.S.C. § 1395nn and the Anti-Kickback Statute, 42 U.S.C.
§ 1320a-7b, which deal with prohibited referrals of patients. See oig.
hhs.gov/compliance/provider-compliance-training/files/Provider-
Compliance-Training-Presentationv2.pdf.
6
Under 31 U.S.C. § 3730, only (1) the U.S. attorney, or (2) a “pri-
vate person” acting as a government whistleblower may file an FCA
case. Other agencies such as HHS or the OIG are not authorized to
directly file an FCA action.
7
See Justice Department Recovers Nearly $5 Billion in False
Claims Act Cases in Fiscal Year 2012, supra note 3.
8
CMPL enforcement actions are handled administratively, and
often interpreted by agency rule. In 1994, for example, the HHS
made clear the government may bring an administrative action
simultaneously with an FCA case, as CMPL penalties are “in addi-
tion and other penalty prescribed by law.” See 42 C.F.R. § 1003.108,
59 Fed. Reg. 32,126 (June 22, 1994). In FCA cases by contrast, even
where the government wishes to argue against a whistleblower,
on the grounds that following the express language would yield
“absurd” results, HHS is powerless to adopt rules which alter the
FCA. Thus, courts will strictly construe the statute as written. See
Little ex rel United States v. Shell Exploration, No. 11-20320, ___
F.3d___ (5th Cir. 2012) (holding a government employee whose job
involves detecting fraud, meets the definition of “private person” for
purposes of the whistleblower provisions of the FCA, even though
it might be a felony for a government agent to profit from doing his
job, and the government argued in favor of dismissal).
9
A perfectly valid FCA claim may often suffer dismissal in court
on the basis of a pleading defect, where the same claim might eas-

ily prevail if presented administratively. As the Fifth Circuit stated:
“We apply Rule 9(b) to fraud complaints with ‘bite’ and ‘without
apology.’” United States ex rel. Grubbs v. Kanneganti, 565 F.3d
180, 186 (5th Cir. 2009). Given this added procedural difficulty,
one might question why the government would ever file an FCA
action at all? Why not simply use the CMPL? The simple answer
seems to be, although the government could pursue a CMPL action
instead of an FCA action, the government cannot pursue a claim
it doesn’t know exists. Violations of many healthcare regulations
require inside knowledge. This is the advantage of an FCA action.
Frequently, the government first learns of the facts amounting to
a violation when it is served a sealed FCA complaint by a qui tam
whistleblower.
10
If a particular statue enables agency rulemaking, the HHS and
other agencies are authorized by the Administrative Procedure
Act (APA) to adopt the Code of Federal Regulations (Stark Law,
the CMPL, the Anti-Kickback Statute, and the Exclusionary Statute
all enable these regulations. The FCA does not). Regulations have
the same force as a statute and may be cited as primary author-
ity by the courts. See 5 U.S.C. § 500 et seq. Pub. L. No. 79-404,
60 Stat. 237 (1946). See Chevron USA Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984) (setting forth the legal
test for determining whether to grant deference to a government
agency’s interpretation of a statute which it administers). Problems
arise, however when agencies such as the OIG issue “clarifications”
which only seem more official because when have been published in
the Federal Register. The Federal Register contains final regula-
tions, but is often where the government simply “thinks out loud.”
In the latter instance, the OIG may explain what the HHS actually
was trying to say in a particular regulation (which was supposed
to clarify its enabling statute). Separating primary authority (e.g.,
“final” rule published in the Federal Register, from a secondary
authority, a simple “pronouncement” can be difficult; especially
where a court has repeated (without adopting) an informal pro-
nouncement as if it were primary authority. An example of this can
be seen in United States ex rel. Westmoreland v. Amgen, No.
06-10972-WGY (D. Mass. 2011) where the court cites confusing OIG
Federal Register “clarifications,” contradicting the very meaning
and effect of the published Anti-Kickback Statute Safe Harbor at
issue in the case: “If the requisite intent to willfully or knowingly
solicit or offer a kickback is present, formal compliance with a safe
harbor is not sufficient to avoid liability under the Anti-Kickback
Statute.” Medicare and State Health Care Programs: Fraud and
Abuse; Clarification of the Initial OIG Safe Harbor Provisions
and Establishment of Additional Safe Harbor Provisions Under
the Anti-Kickback Statute, 64 Fed. Reg. 63,518, 63,530 (Nov. 19,
1999). In other words, according to the OIG’s informal pronounce-
ment “compliance,” vel non, depends upon subjective state of mind.
This seems to render the Safe Harbor absolutely meaningless (and
summary judgment would be improper) because the trier of fact
could always infer “intent,” regardless of strict Safe Harbor compli-
ance. Although what the OIG and the Westmorland court wrote,
in context, actually makes sense to an experienced health lawyer;
these informal “pronouncements” can be very confusing out of con-
text, or to the casual reader.
11
David Freeman Engstrom, Corralling Capture, 36 Harv. J.
Pub. L. & Pol’y 31(2012) (explaining that “regulatory capture is an
idea at the center of virtually any discussion of the appropriate bal-
ance between Congress and administrative agencies.” Utilizing the
DOJ’s involvement in FCA suits to demonstrate a lack of opaque-
ness, “[t]he DOJ makes frequent and critically important micro-level
decisions about whether to join particular qui tam cases that are
largely hidden from public view”) (citing David Freeman Engstrom,
Public Regulation of Private Enforcement: Empirical Analysis
of DOJ Oversight of Qui Tam Litigation Under the False Claims
Act, 107 Nw. U. L. Rev. (forthcoming 2013).
12
On Mar. 23, 2010, 31 U.S.C. § 3730(e)(4) was amended. As of
Mar. 23, 2010, the public disclosure bar is no longer jurisdictional,
but instead, and affirmative defense which can be waived by the
DOJ. Legislation is silent as to retroactivity. See § 10104(j)(2) of the
PPACA, Pub. L. No. 111-148, 124 Stat. 119.
13
See S. Rep. No. 111-10, at 10-12 (Mar. 23, 2009) (specifically
identifying Allison Engine v. United States ex rel. Sanders, 553
U.S. 662 (2008) and United States ex rel. Totten v. Bombardier
Corp., 380 F.3d 488 (D.C. Cir. 2004), among others, as cases which
erroneously interpreted the 1986 Amendments to the FCA). To be
fair, the three branches of government look to one another for guid-
ance. To the extent the Supreme Court misinterpreted Congress’
meaning, the Court may have actually misunderstood OIG’s position
as stated in the 1999 pronouncement on “intent,” which was echoed
by the Court in Allison Engine in 2008, as discussed this article. See
infra note 9, and accompanying text.
14
FERA, Pub. L. No. 111-21, 123 Stat. 1617; 31 U.S.C. §§ 3729(a)
(1)(G), 3729(b)(2)(A)(ii), 3730(h), 3731(c).
15
639 F.3d 791, 796 (8th Cir. 2011).
16
Id.
17
Costner v. URS Consultants, Inc., 153 F.3d 667, 677 (8th Cir.
1998) (quoting United States ex rel. Hopper v. Anton, 91 F.3d
1261, 1266 (9th Cir. 1996), cert. denied, 519 U.S. 1115 (1997)).
18
United States ex rel. Spay v. CVS Caremark Corp., No.
09-4672, at *70, n.30 (E.D. Pa. Dec. 20, 2012).
19
United States ex rel. Wilkins v. United Health Grp., Inc,
659 F.3d 295, 305 (3d Cir. 2011) (quoting United States ex rel.
Schmidt v. Zimmer, Inc., 386 F.3d 235, 242 (3d Cir. 2004);
Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 182 (3d
Cir. 2001)).
20
See In re Genesis Health Ventures, Inc., 112 F. App’x 140,
143 (3d Cir. 2004) (recognizing various types of false claims) and
Wilkins, 659 F.3d at 305 (relaying legally false and factually false
claims theories).
21
S. Rep. No. 99-345 at 9, reprinted in 1986 U.S.C.C.A.N. 5266,
5274 (emphasis added).
22
Mikes v. Straus, 274 F.3d 687, 696-97, 699-700 (2d Cir. 2001).
23
Wilkins, 659 F.3d at 305.
24
Id. (quoting Mikes, 274 F.3d at 699).
25
42 C.F.R. § 424.510(d)(3).
26
No. 10-1505, 2011 WL 2150191 (1st Cir. June 1, 2011).
27
No. 10-1629 (1st Cir. July 22, 2011).
28
United States ex rel. Willard v. Humana Health Plan, 336
F.3d 375, 384 (5th Cir. 2003) and United States ex rel. Russell v.
Epic Healthcare Mgmt. Group, 193 F.3d 304, 308 (5th Cir. 1999)
(“To plead fraud with particularity a plaintiff must include the
‘time, place, and contents of the false representations, as well as
the identity of the person making the misrepresentation and what
[that person] obtained thereby’”) (citations omitted); United States
ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d

899, 903 (5th Cir. 1997) (“At a minimum, Rule 9(b) requires that
a plaintiff set forth the ‘who, what, when, where, and how’ of the
alleged fraud.”) (citation omitted).
29
Sections (D)—(F) are seldom alleged in healthcare FCA cases,
and seem more appropriate in military supplies contracts, such con-
tracting for the delivery of goods, for example, where a truck arrives
at a military loading dock and the clerk signs a receipt, but the truck
leaves with the goods still on the truck, to be sold later.
30
There is probably little distinction between pleading facts suf-
ficient under the Rule 9(b) “heightened” pleading standard and
those, which would be sufficient under the Iqbal/Twombly stan-
dard. In other words, Iqbal/Twombly basically seems to require
(without expressly applying Rule 9(b)) that every case be tested
under a “heightened” standard of pleading facts “who, what, when,
where, and how” in order to state a cause of action. The Supreme
Court holding in Iqbal/Twombly does impose the additional require-
ment that conclusions are to be disregarded.
The FCA, 31 U.S.C. 3729, establishes liability when any person
or entity improperly receives from or avoids payment (reverse false
claims) to the federal government (tax fraud is excepted). The act
provides liability where a person:
(A) knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false
record or statement material to a false or fraudulent claim;
(C) conspires to commit a violation of subparagraph (A), (B), (D),
(E), (F), or (G);
(D) has possession, custody, or control of property or money
used, or to be used, by the Government and knowingly deliv-
ers, or causes to be delivered, less than all of that money or
property;
(E) is authorized to make or deliver a document certifying receipt
of property used, or to be used, by the Government and, intend-
ing to defraud the Government, makes or delivers the receipt
without completely knowing that the information on the receipt
is true;
(F) knowingly buys, or receives as a pledge of an obligation or
debt, public property from an officer or employee of the
Government, or a member of the Armed Forces, who lawfully
may not sell or pledge property; or
(G) knowingly makes, uses, or causes to be made or used, a
false record or statement material to an obligation to pay or
transmit money or property to the Government, or knowingly
conceals or knowingly and improperly avoids or decreases
an obligation to pay or transmit money or property to the
Government, is liable to the United States Government for a
civil penalty of not less than $5,000 and not more than $10,000,
as adjusted by the Federal Civil Penalties Inflation.
31
A false claim allegation is an averment of fraud. Harrison v.
Westinghouse Savannah River Co., 176 F.3d 776, 783-84 (4th
Cir. 1999) (Harrison I). Therefore, a complaint alleging false claims
must comply with the heightened standard of Federal Rule of Civil
Procedure 9(b), which requires a pleader to “state with particular-
ity circumstances constituting fraud or mistake.” Fed. R. Civ. P.
9(b). The U.S. Court of Appeals for the Fourth Circuit has held that
“time, place, and contents of the false representations, as well as
the identity of the person making the misrepresentation and what
he obtained thereby” are the circumstances that must be pled with
particularity. United States ex rel. Wilson v. Kellogg Brown &
Root, Inc., 525 F.3d 370, 379 (4th Cir. 2008) (quoting Harrison
I, 176 F.3d at 784). This set of information is often referred to as
the “who, what, when, where, and how” of the alleged fraud. Id. at
379 (internal quotation marks omitted). For example, a complaint
is insufficient if it fails to allege specific claims submitted to the
government and the dates on which those claims were submitted.
United States ex rel. Clausen v. Laboratory Corp. of Am., Inc.,
290 F.3d 1301, 1311 (11th Cir. 2002); United States ex rel. Brooks
v. Lockheed Martin Corp., 423 F. Supp. 2d 522, 526-27 (D. Md.
2006). Moreover, as to the “what” requirement, “a plaintiff must
show a link between allegedly wrongful conduct and a claim for
payment actually submitted to the government.” United States ex
rel. Dugan v. ADT Security Servs., Inc., No. DKC-03-3485, 2009
WL 3232080, at *14 (D. Md. Sept. 29, 2009) (citing Clausen, 290
F.3d at 1311).
32
Five Ws and One H: The Secret to Complete News Stories,
blog.journalistics.com/2010/five-ws-one-h.
33
See United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720,
732 (1st Cir. 2007).
34
625 F.3d 262, 266 (5th Cir. 2010).
35
553 F.3d 869, 873 (5th Cir. 2008).
36
Guidry v. United States Tobacco Co., 188 F.3d 619, 632 (5th
Cir. 1999).
37
United States v. McNinch, 356 U.S. 595, 599 (1958).
38
United States ex rel. Bledsoe v. Community Health Sys.,
Inc., 501 F.3d 493, 504 (6th Cir. 2007) (citation omitted); see also
Harrison I, 176 F.3d 776, 785(4th Cir.1999) (“The statute attaches
liability, not to the underlying fraudulent activity or to the govern-
ment’s wrongful payment, but to the ‘claim for payment.’”) (citation
omitted, emphasis added).
39
Harrison I, 176 F.3d at 785.
40
United States ex rel. Clausen v. Laboratory Corp. of Am.,
Inc., 290 F.3d 1301, 1311 (11th Cir. 2002) (citation omitted).
41
In fact, a common repleading error can be seen after a case has
The U.S. Court of Appeals for the Fourth
Circuit has held that “time, place, and
contents of the false representations, as
well as the identity of the person making
the misrepresentation and what he
obtained thereby” are the circumstances
that must be pled with particularity. ... This
set of information is often referred to as
the “who, what, when, where, and how” of
the alleged fraud.

been dismissed under Rule 9(b), but the relator misunderstood the
reason. Typically, the relator adds more facts about the scheme,
while adding nothing detailing presentment or materiality of the
claims involved. Typically, the case is then dismissed with preju-
dice. See section on amended pleading under Rule 15, in this article,
infra.
42
See United States ex rel. Gagne v. City of Worcester, 565 F.3d
40, 42 (1st Cir. 2009).
43
United States ex rel. Kinney v. Stoltz, 327 F.3d 671, 674 (8th
Cir. 2003).
44
290 F.3d 1301 (11th Cir. 2002).
45
Congress amended the FCA in 2009 with FERA. Pub. L. No.
111-21, 123 Stat. 1617 (2009). Congress’ decision to amend the FCA
with FERA was in direct response to the Supreme Court’s decision
in Allison Engine Co. v. United States ex rel. Sanders, 553 U.S.
662 (2008) by which the Supreme Court sought to resolve a conflict
between the U.S. Court of Appeals for the Sixth Circuit and the U.S.
Court of Appeals for the District of Columbia (D.C.) Circuit regard-
ing the proper interpretation of subsections (a)(2) and (a)(3) of the
FCA. In Allison Engine, the district court had held that all three
sections of former § 3729(a) required a showing that the false claim
at issue had actually been presented to the government for liability
to attach. Allison Engine, 471 F.3d 610, 613 (6th Cir. 2006). The
Supreme Court stated that this opinion conflicted with the D.C. Cir-
cuit’s holding in United States ex rel. Totten v. Bombardier Corp.,
380 F.3d 488 (D.C. Cir. 2004). Allison Engine, 553 U.S. at 668. In
Totten, the district court dismissed the complaint alleging that the
defendants violated subsection (a)(1) by submitting false invoices
to Amtrak. Totten, 380 F.3d at 490. The D.C. Circuit affirmed, find-
ing that “Amtrak is not the Government,” and that under the plain
language of § 3729(a)(1), “claims must be presented to an officer
or employee of the Government before liability can attach.” Id. at
490. With Allison Engine, the Supreme Court undertook to resolve
this conflict. 553 U.S. at 668. It concluded that “it is insufficient for
a plaintiff asserting a § 3729(a)(2) claim to show merely that ‘[t]he
false statement’s use ... result[ed] in obtaining or getting payment or
approval of the claim,’ or that ‘government money was used to pay
the false or fraudulent claim’” as the Sixth Circuit had held. Id. at
665 (citations omitted). Instead, the Supreme Court held that the
focus should be on the defendant’s intent. Thus, for a claim under
subsection (a)(1), the plaintiff need not present evidence that the
defendant himself presented the false claim to the government, but
there must be evidence that the defendant submitted a false claim
and that the claim was ultimately submitted to the government for
payment or approval. Although Congress effectively overruled Alli-
son Engine with FERA, many OIG interpretations published in the
Federal Register, now stand as well-meaning, but incorrect attempt
to apply Allison Engine. See infra note 9, and accompanying text.
46
See United States ex rel. Wall v. Vista Care, No. 3:07-CV-
604-M (N.D. Tex. 2011) (citing Kanneganti, 565 F.3d at 185).
47
See United States ex rel. Grubbs v. Kanneganti, 565 F.3d
180, 185 (5th Cir. 2009) (noting that in FCA cases, liability could
be established where the pleading contains an indicia of reliability,
though the precise amount of bills submitted may be missing).
48
See T.S. Ellis & N. Shah, Iqbal, Twombly, and What Comes
Next: A Suggested Empirical Approach, 114 Penn. St. L. Rev.
Penn Statim 64 (2010), available at www.pennstatelawreview.
org/114/114%20Penn%20Statim%2064.pdf.
49
The second order of dismissal is normally “with prejudice,”
thereby foreclosing the possibility of a third motion to dismiss. If a
motion to amend is necessary, always include the amended pleading
with the motion. Otherwise, the court of appeals will have nothing to
consider in reviewing the trial courts abuse of discretion.
50
Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d
222 (1962).
51
The third motion to amend filed by Blodgett’s attorney was
accompanied by a copy of the proposed amended complaint. But
that supposedly “streamline[d]” amended complaint [ECF No. 67 at
2] weighed in at a remarkable 182 pages and 351 paragraphs—well
over 100 pages longer than the original complaint, and over 20
pages longer than the pro se amended complaint that Judge Cynthia
Leung rejected as failing to comply with Rule 8. Needless to say,
the proposed amended complaint does not come close to complying
with Rule 8, and thus Blodgett’s motion to amend is denied.
52
Gurman v. Metropolitan Hous. & Redev. Auth., 842 F. Supp.
2d 1151, 1152 (D. Minn. 2011) (quoting Fed. R. Civ. P. 8(a)(2)).

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