The Ninth Circuit Court of Appeals[1] recently joined the Sixth, First, Second, and District of Columbia in ruling that the so-called “first-to-file bar” under the False Claims Act (“FCA”) was a non-jurisdictional defense. The first-to-file bar, codified at 31 U.S.C. § 3730(b)(5), blocks “parasitic” FCA claims alleging fraud already alleged in another, pending matter – even if that pending matter is under seal and unavailable to public view. In essence, a defendant that can demonstrate another whistleblower previously alleged a theory of fraud similar to the one filed against them, that defendant can use the first-to-file bar to have their case thrown out with prejudice (meaning it cannot be refiled).
While the issue and ruling are technical in nature, the decision’s ramifications – for those within the Ninth Circuit – are significant. Non-jurisdictional defenses can – and often are – waived if not raised at the earliest possible point in an FCA action. Therefore, if you are or may be facing FCA liability, it is critical that this defense be raised at the first possible instance – failing to do so will likely result in a Court finding that you’ve waived your right to use it later in the case. And the first-to-file bar – to the extent applicable – is one of the most robust FCA defenses available.
Notably, in issuing this ruling, the Ninth Circuit paved the way for a number of previously-dismissed Complaint and claims in the ongoing risk adjustment fraud case against Kaiser Permanente to be potentially revived – a matter the firm has previously written about extensively[2].
HOW FRIER LEVITT CAN HELP
Frier Levitt has an expanding False Claims Act defense practice, with attorneys practiced in raising cutting edge defensive theories to protect providers all over the country. If you are a provider and currently a defendant in an FCA action or the subject of an FCA investigation, contacting competent healthcare counsel as soon as possible is critical to maximizing your chances of mounting a successful defense. Contact Frier Levitt for a consultation.
[1] Marcia Stein et al. ex rel. U.S. v. Kaiser Foundation Health Plan, Inc. et al. (filed 9/24/24) (9th Circuit) (copy available at 13-cv-03891-EMC, ECF No. 367).
[2] See https://www.frierlevitt.com/articles/refreshing-a-risk-adjustment-coding-practice-to-be-avoided-by-providers-in-medicare-advantage-contracts/; https://www.frierlevitt.com/articles/doj-intervenes-in-six-false-claims-act-actions-concerning-alleged-medicare-advantage-diagnosis-code-chasing-by-kaiser-permanente/; https://www.frierlevitt.com/articles/affordable-care-act-exchanges-the-governments-latest-hunting-ground-for-risk-adjustment-fraud/.
