The False Claims Act in healthcare

1. Start with the claim: the four statutory routes

Section 3729(a)(1) separates conduct that is routinely blended in public discussion. Each route asks a different question, and each requires its own evidence.L01

Knowledge. "Knowingly" includes actual knowledge, deliberate ignorance and reckless disregard of truth or falsity, and no specific intent to defraud is required. The three alternatives should be identified, not blended into an accusation of institutional bad faith. The obligation in (G) includes an established duty "whether or not fixed," arising from a contractual or other relationship, statute or regulation, or the retention of an overpayment; anticipated exposure to future enforcement is not itself an established obligation.L01

Funding. In Wisconsin Bell, Inc. v. United States ex rel. Heath (2025) the Supreme Court held that E-Rate reimbursement requests were "claims" because the government had provided a portion of the money through Treasury transfers, even though a private administrator ran the fund. The decision supports tracing funds through intermediaries. It does not make every county contract a federal claim because the county receives unrelated federal money; the research question remains concrete — what funds paid the challenged obligation, for which program, and which entity requested them.L02

Remedies. Liability is ordinarily three times the government's proven damages plus a civil penalty for each false claim, with penalties adjusted annually for inflation. Loss, the claim-counting unit and the applicable penalty year each require their own analysis. A request can be presented without being paid; total institutional revenue is not loss; and not every billing line, encounter, invoice and certification is automatically a separately penalizable claim.L01

2. California's statute: a separate route for state and county money

The California False Claims Act reaches claims on the state and its political subdivisions — counties included — and its definition of "claim" covers qualifying requests made to contractors and grantees. The Attorney General's False Claims Unit describes enforcement by the Attorney General and by local prosecuting authorities, as well as sealed whistleblower actions. A county-funded healthcare invoice may therefore present a California FCA question even where no federal reimbursement is involved.L03L04

That distinction matters most where hospital billing and public-contract invoicing are compared. A hospital seeks payment through federal programs; a county contractor submits monthly staffing or service invoices under a local agreement. The representation, the funding path and the loss model differ, and a Medicare billing theory cannot be imported into a county contract without identifying the contractual and financial connection. This publication's existing analysis of attorney-general and county roles is in Roadmap 093; it is not repeated or contradicted here.A08

Two California provisions deserve separate treatment. Government Code § 12651(a)(8) addresses a beneficiary of an inadvertently submitted false claim who later discovers it and fails to disclose it within a reasonable time. And § 12651(f) excludes claims, records or statements made under the Revenue and Taxation Code — as the federal statute excludes those made under the Internal Revenue Code. Tax documents can supply investigative leads about who controlled what; the exclusions prevent treating a tax discrepancy as itself an actionable false claim.L27L01

3. Pleading: Rule 9(b), Ebeid, and the corporate-practice problem

Rule 9(b) requires the circumstances of fraud to be pleaded with particularity, while allowing knowledge to be alleged generally. Ebeid ex rel. United States v. Lungwitz (9th Cir. 2010) deserves a central place in any California discussion linking the corporate practice of medicine to federal claims, because that is exactly what the relator alleged: unlawful corporate practice and unlawful referrals among healthcare businesses. The Ninth Circuit recognized implied false certification as a viable theory, and then affirmed dismissal because the complaint did not plead it with particularity.L05

Ebeid permits a complaint to plead particular details of a scheme together with reliable indicia that lead to a strong inference that claims were actually submitted; it does not invariably require the invoices themselves. But the misconduct must be identified specifically enough to permit a response, and an outsider's lack of access does not dispense with that requirement. It did not hold that an asserted corporate-practice defect turns all Medicare billing into actionable fraud.L05

Inference The practical consequence for anyone examining a management-services arrangement is that organizational research needs a billing counterpart: who selected the codes, who approved the certifications, which provider submitted the claims, and what the payer understood those claims to represent. Where the answer is unknown, that is the evidentiary gap to name. The defense's strongest initial argument in such cases is that the dispute concerns professional regulation or governance and identifies no payment deception; the persuasive answer connects a specific control mechanism to a specific false representation, rather than presuming the connection from the existence of a management company.

The Eastern District applied the same discipline in United States v. Peters in July 2024: the scheme could be pleaded collectively as to defendants who played identical roles in a "wheel," but the government had to identify when the claims sued on were submitted, because liability attaches to the claim and not to the scheme.

4. Falsity and materiality: Escobar and Rose

Universal Health Services v. Escobar (2016) recognized implied-certification liability where a claim makes specific representations about the goods or services provided and the defendant's failure to disclose noncompliance with a material requirement makes those representations misleading half-truths. A requirement's designation as a condition of payment is relevant but not dispositive. Materiality is "demanding": continued payment with actual knowledge that certain requirements were violated is very strong evidence that they are not material, and a theoretical power to refuse payment is not enough.L06

The Ninth Circuit's amended opinion in United States ex rel. Rose v. Stephens Institute (2018) applies Escobar's two conditions to the implied-certification theory before it and evaluates materiality on the actual circumstances, including how the government has responded to comparable violations and how substantial the violation is.L07

An effective case account therefore says first what the payer was told. Did the claim identify a particular professional, a level of service, an eligible supplier? Did an enrollment record describe ownership or managerial control? Did a cost report certify expenses that belonged elsewhere? Materiality then needs its own paragraph: an agency's receipt of an unverified complaint, its awareness of a general industry concern, and its confirmed knowledge of the precise violation are three different facts, and continued payment means something only when set against what the government knew about the same requirement and the same conduct.

5. Knowledge: SuperValu makes the contemporaneous record central

United States ex rel. Schutte v. SuperValu Inc. (2023) directs the scienter inquiry to the defendant's own knowledge and subjective beliefs when the claim was submitted. A post hoc, objectively reasonable reading of an ambiguous rule does not defeat liability if the defendant actually believed its claims were false; facial ambiguity does not by itself preclude actual knowledge, deliberate ignorance or reckless disregard. The Court corrected the standard and remanded; it did not decide the pharmacies' liability.L08

For investigation, chronology becomes evidence. A warning delivered before a billing practice began bears on a different question from a memorandum written after litigation started. An audit finding, payer instruction, valuation objection or billing correction becomes informative when placed beside the conduct it allegedly influenced. The same discipline protects against overstatement: an adverse audit does not show that a particular defendant knew a particular claim was false, and a record of management investigating uncertainty supports a different inference from one directing staff to conceal an understood defect.

6. Medical necessity: neither blanket deference nor automatic fraud

Winter v. Gardens Regional Hospital (9th Cir. 2020) rejected a categorical requirement of "objective falsity." A medical-necessity certification is an opinion that can be false if it was not honestly held or if it implies the existence of facts that do not exist. The decision allowed the allegations to proceed; it did not make every clinical disagreement fraudulent.L20

United States ex rel. Campie v. Gilead Sciences (9th Cir. 2017) supplies a related caution: regulatory approval and continued payment were not an automatic answer where the relationship among the alleged misrepresentations, the approvals and the government's knowledge required examination. The informative analysis reads the patient's documented condition, the certification, the payment requirement and the evidence of what the certifying clinician understood. A second clinician's disagreement poses a question; it does not answer what the first clinician knew.L21

7. Stark: identify the relationship, the exception and the period

The physician self-referral regulations distinguish direct from indirect ownership and compensation relationships; the chain of intermediaries, the physician's relationship to a physician organization and the "stand in the shoes" provisions can determine how an arrangement is classified, and each compensation exception — employment, personal services, rental, indirect compensation, electronic health records — has its own conditions.L09L10

A Stark violation and FCA liability are separate inquiries. A missing exception may establish that Medicare could not pay for a designated health service; FCA recovery still requires knowledge, falsity, materiality and the other statutory elements. And time matters: CMS's December 2020 rule (effective January 19, 2021) and later revisions changed parts of the indirect-compensation framework and several exceptions, so historical referrals must be measured against the rule in force when they occurred. The electronic-health-records exception is a live example in the Terpening litigation, whose allegations span 2013 to 2024.L12

Fair market value and commercial reasonableness are different tests. Current § 411.351 provides that an arrangement may be commercially reasonable even if it does not result in profit for one or more parties. A high compensation figure, a department's operating loss, or a fee expressed as a percentage cannot by itself complete the analysis; the comparison that matters tests the services actually provided, the compensation formula, documented time, valuation assumptions and any referral-sensitive variable against the exception claimed.L11

8. The Anti-Kickback Statute: intent, safe harbors and causation are three questions

The AKS reaches knowing and willful remuneration offered or paid to induce federally reimbursable business. Its 2010 amendment provides that a claim that includes items or services "resulting from" a violation is false or fraudulent for FCA purposes. Both the remuneration arrangement and its connection to the claim must be analyzed.L13

Stark and the AKS are not interchangeable: HHS-OIG explains that satisfying a Stark exception does not protect an arrangement from AKS scrutiny, and the safe harbors operate differently from the exceptions. The personal-services and management-contracts safe harbor, for instance, requires among other things a signed writing covering all services, compensation methodology set in advance, fair market value, and terms not determined by the volume or value of referrals. Failing to fit a safe harbor does not make an arrangement illegal; it requires a facts-and-intent analysis — and partial compliance confers no protection.L14L15

Causation. In United States v. Regeneron Pharmaceuticals (1st Cir. 2025) the First Circuit held that the 2010 amendment's "resulting from" language requires but-for causation, aligning with the Sixth and Eighth Circuits and disagreeing with the Third Circuit's approach; it also distinguished that statutory route from false-certification theories. The Sixth Circuit's Martin v. Hathaway (2023) illustrates the separate need to establish remuneration rather than infer it from a disputed business decision. These are out-of-circuit decisions. This review located no published Ninth Circuit decision resolving the causation split; California reporting should say so rather than present any side as controlling.L16L17

Inference The evidentiary task is the same under any standard: connect the remuneration to referral decisions, to services and to claims, and examine the argument that the same clinically appropriate service would have been ordered anyway. Temporal association and aggregate correlation inform that inquiry; they do not settle it. The adopted preclusion sanctions in Peters show what happens in litigation when the records that would test an investment or management-services explanation are not produced.

9. Two 2026 Ninth Circuit decisions, with their status visible

Adventist Health System of West v. AbbVie — published, March 17, 2026

Proved A 340B covered entity alleged that drug manufacturers charged prices above the statutory ceiling, inflating amounts Medicare and Medicaid then reimbursed. Astra USA v. Santa Clara County (2011) holds that covered entities have no private right of action to enforce Section 340B. The panel held that this was immaterial to an FCA action seeking the government's losses: the relator was not "in essence" suing to enforce 340B, and barring the claims would undermine the FCA. It also held falsity plausibly pleaded, reversed and remanded.L19

It is a pleading-stage holding, not a finding that the manufacturers committed fraud, and it concerns conventional presentment and false-record theories — it should not be described as a reverse-false-claims decision because the subject is pricing. Its wider value is the distinction it draws between a regulatory enforcement scheme and a separate claim that satisfies the FCA's own elements; the converse holds too, since identifying a regulatory problem never dispenses with those elements.

Moore v. Regeneron — unpublished and nonprecedential, August 19, 2026

Proved Read in full: the panel reversed the dismissal of the relators' claims against Regeneron under the public-disclosure bar, because the publicly disclosed physician-payment data showed only "a piece of the puzzle" while the relators' allegations about internal operations filled in the alleged scheme; rejected Regeneron's alternative argument that the AKS-based claims failed to state a claim; affirmed dismissal of the conspiracy claim, because co-promotion agreements and parallel conduct are not a particularized agreement to defraud; and affirmed dismissal of the claims against Sanofi, because beyond the public payment data the relators — former Regeneron employees — offered no genuinely new information about Sanofi's role. Judge Lee dissented in part on the sufficiency of the AKS allegations ("what appears unseemly is not always unlawful"). The memorandum is not precedent except as provided by Ninth Circuit Rule 36-3.L18

Inference The methodological point for any entity map is direct: information about one participant does not supply particularized allegations against its business partner. Each arrow on a chart should name a distinct relationship — ownership, contractual authority, compensation, referral or claim submission — and the evidence for it. Moore did not resolve the national causation split or make co-promotion arrangements unlawful as a category.

10. Qui tam procedure can decide a case independently of the alleged fraud

A relator's complaint is filed under seal for at least sixty days while the government investigates and decides whether to intervene; a related action cannot be brought by another person while the first is pending; and the public-disclosure bar requires dismissal of an action based on substantially the same allegations publicly disclosed through specified channels unless the relator is an original source. These are distinct statutory questions, not interchangeable descriptions of standing.L22

United States ex rel. Polansky v. Executive Health Resources (2023) holds that the government may move to dismiss a qui tam action it initially declined, once it has intervened, under Rule 41(a) with substantial deference to its judgment; initial declination is not a permanent surrender of control. The Terpening election order illustrates the three positions the government can take at once — intervention for settlement, declination, and "not intervening at this time."L25

On the constitutional challenge to the qui tam device, the Eleventh Circuit's Zafirov decision of September 1, 2026 vacated an Appointments Clause dismissal, holding that relators do not hold a continuing governmental position for that analysis, and remanded the remaining Take Care and Vesting Clause arguments. It is out-of-circuit and does not resolve every constitutional objection.L26

11. Retaliation: protection does not depend on a filed qui tam case

Section 3730(h) protects employees, contractors and agents against discharge, demotion, suspension, threats, harassment or other discrimination because of lawful acts done in furtherance of an FCA action or other efforts to stop one or more FCA violations. An action must be brought within three years of the retaliation. A summary limited to activity in furtherance of a qui tam lawsuit understates the statute.L22

Campie treats protected activity, the employer's knowledge of it, and discrimination because of it as distinct elements, and holds that Rule 9(b)'s heightened standard does not govern the retaliation claim. California Government Code § 12653 likewise protects efforts to stop violations, provides a three-year limitations period, and authorizes remedies including two times back pay and, where appropriate, punitive damages. These claims belong to the worker and are analyzed separately from any recovery owed to the government. An ordinary workplace dispute, without a supported connection to potential false claims, is not protected FCA activity.L21L28

The fuller workplace discussion is in Whistleblowing and retaliation, which has been corrected to reflect this statutory scope.

12. Limitations: there is no universal ten-year deadline

Section 3731(b) allows an action within six years of the violation, or within three years after the material facts are known or reasonably should have been known by the responsible official of the United States, but in no event more than ten years after the violation — whichever is later. Cochise Consultancy v. United States ex rel. Hunt (2019) holds that the three-year provision is available in a relator's action the government declined, and that the relator is not the "official of the United States." California § 12654 has its own six-, three- and ten-year structure. Each claim, repayment obligation and retaliatory act belongs on its own timeline.L24L23L29

13. Statutory mitigation is not a settlement multiplier

Section 3729(a)(2) allows a court to reduce damages to not less than double where it finds that the violator furnished all known information to the responsible officials within thirty days of first obtaining it, fully cooperated, and did so before any criminal prosecution, civil action or administrative action had begun and without actual knowledge of an investigation. That is a judicial finding with three conditions, distinct from negotiated settlement terms and from agency self-disclosure programs; the investigation's coverage of the October 2026 civil self-disclosure developments is in Healthcare enforcement. A settlement's own allocations — principal, restitution within it, interest, relator's share out of it, separate fees — are contractual, and should not be repurposed as adjudicated damages against anyone who did not settle.L01

14. Identifiers and corporate-practice evidence keep their precise meaning

CMS states that issuance of a National Provider Identifier does not validate licensure or credentialing; a registry record identifies the reported provider, taxonomy and address, nothing more. The Medical Board of California's corporate-practice guidance identifies clinical and business decisions that must remain under physician control, including certain hiring, payer-contract, coding and record decisions — which makes actual decision-making authority important, but does not answer the separate federal question whether a particular claim was knowingly false.L30L31

The defensible conclusion states each fact and its limit. A contract may establish a reserved power; evidence of implementation may establish that the power was exercised; a billing record may establish that a resulting representation reached a payer. Kept separate, those propositions make an investigation harder to discredit through a single unsupported inference.

15. Match the proof to the question

The final editorial test asks whether an account survives the defendant's most concrete explanation. Where a payment allegedly bought legitimate services, compare the contract, work records and valuation. Where continued government payment is invoked, examine the knowledge chronology. Where an affiliate denies participation, identify that affiliate's documented act rather than extending allegations through a common brand. If a material link is missing from the public record, say which record would supply it.

16. The Fresno record as the worked example

The Fresno case library applies this framework to live and settled matters. Terpening shows a partial settlement that resolved defined covered conduct for two defendants while litigation continues against five others, a pending pleading challenge, and an October 29, 2026 order that directs Rule 37(e) discovery without deciding sanctions. Peters shows collective pleading accepted, claims required to be dated, laches struck, a bankruptcy stay refused under § 362(b)(4), and Rule 37(b) preclusion of MSO defenses. The Mukker and Goswami agreements show two settlements from one alleged arrangement with different legal terms — accepted facts in one, denial in the other. The regional collection isolates necessity, coding, inducement, program-eligibility and contractual-certification theories, and keeps criminal matters apart.

Documenting what happened, explaining why it may matter under the governing law, and identifying what remains for adjudication are three different kinds of public value. An account gains authority when readers can see exactly where the public record ends and the legal analysis begins.

Sources

Official issuers and original instruments are preferred; reproductions of primary legal text are identified. A source that opens is not proof of every neighbouring claim. Checked 1 November 2026 unless stated.

1. L0131 U.S.C. § 3729 — liability for false claims; definitions; tax exclusionFederal statute, official compilation
2. L2231 U.S.C. § 3730 — civil actions; qui tam procedure; retaliation (§ 3730(h))Federal statute, official compilation
3. L2431 U.S.C. § 3731 — procedure; limitations; burden of proofFederal statute, official compilation
4. L02Wisconsin Bell, Inc. v. United States ex rel. Heath, 604 U.S. 141 (2025)Official Supreme Court opinion
5. L03California Government Code § 12650 — definitions (reproduced)Statute, reproduced · official LegInfo host returned errors during research
6. L27California Government Code § 12651 — liability; § 12651(a)(8) and (f) (reproduced)Statute, reproduced · labeled current January 1, 2026
7. L28California Government Code § 12653 — retaliation (reproduced)Statute, reproduced
8. L29California Government Code § 12654 — limitations (reproduced)Statute, reproduced
9. L04California Department of Justice — False Claims UnitOfficial agency page
10. L32California Franchise Tax Board — SB 799 analysis, as amended January 5, 2026Official agency analysis · states the FCA/tax expansion was removed
11. L33Senator Ben Allen — statement on South Bay housing-trust legislation (Oct. 15, 2026)Official legislator statement
12. L05Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993 (9th Cir. 2010)Published opinion
13. L06Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016)Supreme Court opinion, reproduced
14. L07United States ex rel. Rose v. Stephens Institute, 909 F.3d 1012 (9th Cir. 2018) (amended)Published amended opinion
15. L08United States ex rel. Schutte v. SuperValu Inc., 598 U.S. 739 (2023)Official Supreme Court opinion
16. L20Winter v. Gardens Regional Hospital & Medical Center, Inc., 953 F.3d 1108 (9th Cir. 2020)Published opinion
17. L21United States ex rel. Campie v. Gilead Sciences, Inc., 862 F.3d 890 (9th Cir. 2017)Published opinion
18. L0942 C.F.R. § 411.354 — financial relationships (eCFR)Current regulation
19. L1042 C.F.R. § 411.357 — compensation exceptions (eCFR)Current regulation
20. L1142 C.F.R. § 411.351 — definitions, including commercially reasonable (eCFR)Current regulation
21. L12HHS/CMS — Physician self-referral, including regulatory historyOfficial guidance index
22. L1342 U.S.C. § 1320a-7b — Anti-Kickback Statute, including subsection (g)Federal statute, official compilation
23. L1442 C.F.R. § 1001.952 — AKS safe harbors (eCFR)Current regulation
24. L15HHS-OIG — General questions regarding certain fraud and abuse authoritiesOfficial agency FAQ
25. L16United States v. Regeneron Pharmaceuticals, Inc., 128 F.4th 324 (1st Cir. 2025)Published opinion · out of circuit
26. L17United States ex rel. Martin v. Hathaway, 63 F.4th 1043 (6th Cir. 2023)Published opinion · out of circuit
27. L18United States ex rel. Moore v. Regeneron Pharmaceuticals, No. 24-5569 (9th Cir. Aug. 19, 2026) — memorandumUnpublished, nonprecedential (Ninth Cir. R. 36-3) · read in full for this edition
28. L19United States ex rel. Adventist Health System of West v. AbbVie Inc., No. 24-2180 (9th Cir. Mar. 17, 2026)Published opinion · read for this edition
29. L25United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023)Official Supreme Court opinion
30. L26Zafirov v. Florida Medical Associates, No. 24-13581 (11th Cir. Sept. 1, 2026)Published opinion · out of circuit · research-package reading
31. L23Cochise Consultancy, Inc. v. United States ex rel. Hunt, 587 U.S. 262 (2019)Official Supreme Court opinion
32. L30CMS — National Plan and Provider Enumeration SystemOfficial federal system
33. L31Medical Board of California — Information pertaining to the practice of medicine (corporate practice)Official regulator guidance
34. A08KPSGILL — CFMG–Wellpath Roadmap 093: attorney-general roles and California FCA forumsThis publication · county versus federal funds

Reviewed and approved for publication by Kanwar Partap Singh Gill, MD. Public-interest legal analysis of court records, executed agreements, statutes and official announcements. Not legal advice. A settlement is not a finding of liability unless the agreement says otherwise; a pleading or discovery ruling is not proof of the allegations; named parties are discussed only within what the cited public records establish.

Fresno and Eastern District False Claims Act library

1. Fresno division · 1:19-cv-01699TerpeningDiscovery · sanctions undecided
2. Sacramento division · 2:24-cv-00287PetersDiscovery · Rule 37(b) preclusion adopted
3. Fresno practice · 2024 agreementMukkerSettled with specified facts accepted
4. Fresno practice · 2024 agreementGoswami / California Pain ConsultantsSettled; contentions denied
5. Eastern District of CaliforniaRegional and criminal comparatorsDated historical records
6. Governing lawThe False Claims Act in healthcareStatute, pleading, materiality, scienter, Stark, AKS

Case library index · The Fresno Files · Healthcare enforcement investigation · Source ledger