Healthcare Schemers Cannot Hide Behind the First-to-File Doctrine 
Healthcare Schemers Cannot Hide Behind the First-to-File Doctrine 

With a greater demand to access for healthcare services also comes the need for reliable and honest physicians and healthcare facilities. Unfortunately, throughout the country healthcare kickback schemes are becoming more prominent in the healthcare system.

Kickbacks are incentives, usually bribes or anything of value, paid to a physician or healthcare facility to induce the referral of items or services reimbursable by Medicare, Medi-Cal or private insurers. Now more than ever, whistleblowers are encouraged to exercise their duty and right to disclose fraudulent or wrongful conduct.

As a result, Defendants are using the First-to-File Doctrine to discourage whistleblowers from coming forward on fraudulent kickback schemes. The First-to-File Doctrine “bars later-filed actions alleging the same material elements of fraud described in an earlier suit, regardless of whether the allegations incorporate somewhat different details.” United States ex rel. Lujan v. Hughes Aircraft Co. (9th Cir. 2001) 243 F.3d 1181, 1188-89. Defendants argue that prior investigations and lawsuits involving similar situations bar kickback actions, under three provisions of the Federal and California False Claims Acts.

However, the rule does not bar suits alleging “related but distinct fraud claims.” U.S. ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1131 (9th Cir. 2015). Similarity is assessed by comparing the complaints side-by-side and asking whether the later complaint “alleges a fraudulent scheme the government already would be equipped to investigate based on [the first] [c]omplaint.” United States ex rel. Batiste v. SLM Corp., 659 F.3d 1204, 1209 (D.C. Cir.2011). Many times, Defendants fail to meet the “same material elements” test.

Every claim made for services tainted by these illegal kickbacks is a violation of Federal and California False Claims Acts. The False Claims Act allows a whistleblower to work with government agencies to help investigate the fraud and hold the schemers accountable. By filing a False Claims Act case with Cotchett, Pitre & McCarthy, LLP, you can help the government fight this fraud, and if successful, share a percentage of the amount rewarded.

If you have information regarding fraud or would like more information, please contact CPM attorney Carlos Urzua.

  • Carlos  Urzua
    Senior Associate

    Carlos Urzua is a senior associate at Cotchett, Pitre & McCarthy, LLP's Santa Monica office. His areas of practice include products liability, mass torts, professional negligence, wrongful death, and environmental tort, all on ...


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