United States of America, Ex Rel. Terri R. Winnon v. Ramiro G. Lozano , J R .

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 25, 2024 Decided August 12, 2025
No. 23-7139
UNITED S TATES OF A MERICA, EX REL. TERRI R. WINNON ,
AND
S TATE OF TEXAS , EX REL. TERRI R. WINNON ,
AND
TERRI R. WINNON ,
APPELLANT
v.
R AMIRO G. LOZANO , J R ., ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-02433)
Kendal C. Simpson argued the cause for appellant. With
her on the briefs were Joshua M. Russ, Brett S. Rosenthal,
Allison N. Cook, Rachel Veronica Rose, and Patricia Ryan.
Luke V. Cass argued the cause for appellees Lozano, et al.
With him on the brief were Joe D. Whitley and M. Rhett
DeHart.

-- 1 of 33 --

2
Kathleen McDermott argued the cause for appellee
RehabCare Group East, LLC. With her on the brief were Kayla
Stachniak Kaplan and Meredith S. Auten.
Before: KATSAS and C HILDS , Circuit Judges, and
EDWARDS , Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge C HILDS .
Opinion concurring in part and dissenting in part filed by
Circuit Judge KATSAS .
C HILDS , Circuit Judge: The False Claims Act is the federal
government’s sword against fraud. At the heart of the Act lies
the qui tam provision, which deputizes private individuals,
known as relators, to expose fraudulent schemes targeting
federal programs in exchange for a share of any recovery. 31
U.S.C. § 3730(d). Medicare and Texas Medicaid, which use
federal funding to provide medical services for persons with
disabilities, the elderly, and low-income individuals—
including those admitted to skilled nursing facilities—are
frequent targets of such schemes.
This qui tam action arises from allegations by Relator Terri
R. Winnon that seventeen defendants flouted the False Claims
Act and the Texas Medicaid Fraud Prevention Law by
scheming their way to improper reimbursements. In her view,
the defendants paid off doctors and hospital discharge planners
for patient referrals to skilled nursing facilities and also inflated
bills with superfluous therapy services. The district court
found these claims either barred by the Act’s public disclosure
provision or too thinly pleaded to satisfy Federal Rule of Civil
Procedure 9(b).

-- 2 of 33 --

3
On appeal, Winnon presses two points: that she qualifies
as an original source and that her allegations satisfy Rule 9(b).
Were she correct on both counts, a remand and reinstatement
of her state law claims might follow. But she fails to meet the
original source requirement. And though her allegations come
close under Rule 9(b), they fall short.1 We therefore affirm.
I.
A.
The False Claims Act (FCA or the Act), originally enacted
as the Informer’s Act in 1863,2 was a Civil War-era response
to rampant fraud against the Union Army. See United States v.
Bornstein, 423 U.S. 303, 309 (1976). Dormant for decades, the
Act was first amended by Congress in 1986, making it the
government’s primary weapon against fraud. Pub. L. No. 99-
562, 100 Stat. 3153. A subsequent amendment in 2010
extended the Act’s reach to combat health care fraud. Patient
Protection and Affordable Care Act, Pub. L. No. 111-148,
§ 10104, 124 Stat. 119, 901–02 (Mar. 23, 2010).
Winnon’s appeal involves a presentment claim brought
under the FCA. For this provision, liability attaches to anyone
who “knowingly presents, or causes to be presented, a false or
fraudulent claim [to the government] for payment or approval.”
31 U.S.C. § 3729(a)(1)(A). The term “knowingly” includes
“actual knowledge,” “deliberate ignorance,” and “reckless
1 Our colleague partially dissents. He would reverse the district
court’s dismissal of Winnon’s claim that certain defendants
induced local doctors and hospital discharge planners with
marketing gifts.
2 Act of Mar. 2, 1863, ch. 67, 12 Stat. 696 (codified as amended
at 31 U.S.C. § 3729 et seq.).

-- 3 of 33 --

4
disregard” of the information. Id. § 3729(b)(1)(A)(i-iii). A
“claim” includes any request for payment involving federal
funds or programs. Id. § 3729(b)(2)(A).
The FCA often overlaps with the Anti-Kickback Statute
(AKS) and the Self-Referral Law (Stark Law), which provide
substantive bases for liability. The AKS prohibits knowing and
willful solicitation or receipt of remuneration in return for
referrals for federally reimbursed services. 42 U.S.C. § 1320a-
7b(b)(1)(A). “Remuneration” encompasses anything of value,
including payments or services below fair market value. Id.
§ 1320a-7a(i)(6). The Stark Law, in turn, bars physicians from
referring Medicare patients to entities with which they have a
financial relationship absent specific exceptions. Id.
§ 1395nn(a)(1)(A). A financial relationship is defined broadly
to include ownership interests or compensation arrangements.
Id. § 1395nn(a)(2), (h)(1).
Winnon’s qui tam action also invoked tantamount Texas
state law claims alongside her FCA presentment claim. The
Texas Medicaid Fraud Prevention Law (“TMFPL”), Tex.
Hum. Res. Code Ann. § 36.001 et seq., criminalizes common
forms of fraud, such as “knowingly mak[ing] or caus[ing] to be
made a false statement or misrepresentation of a material fact
to permit a person to receive a benefit or payment” that is
unauthorized or greater than authorized, id. § 36.002(1).
Fraudulent conduct also runs afoul of the Texas Human
Resources Code – Medical Assistance Program (“MAP”), id. §
32.039(b), and the Texas Patient Solicitation Act (“TPSA”),
which prohibits the solicitation of patients and the submission
of claims for reimbursement by Texas Aid.3 Tex. Occ. Code
Ann. § 102.001 et seq.
3 The TMFPL, MAP, and TPSA hereinafter are collectively
referred to as “Texas Law.”

-- 4 of 33 --

5
B.
Medicare, created under Title XVIII of the Social Security
Act (SSA), provides health insurance primarily to individuals
aged sixty-five and older, as well as certain individuals with
disabilities. See 42 U.S.C. § 1395c. Similarly, Title XIX of
the SSA establishes the Texas Medicaid Program, which offers
medical assistance through a partnership jointly funded and
administered by Texas and the federal government. See 42
U.S.C. §§ 1396 et seq.
Medicare governs reimbursement for services provided in
skilled nursing facilities (SNF) through two distinct Parts. Part
A covers short-term inpatient care, id. § 1395y(a)(1)(A), while
Part B covers ancillary services such as therapy, id. §§ 1395j–
1395w-6. To safeguard program integrity, reimbursement
under both Parts, and Texas Medicaid, is strictly limited to
services deemed “reasonable and necessary.” Id.
§ 1395y(a)(1)(A); see id. §§ 1320c-5(a)(1), 1395j–1395w-6,
1396 et seq.
Medicare contractors, known as fiscal intermediaries, bear
the responsibility for processing claims, auditing payments,
and ensuring compliance with federal regulations established
by the Centers for Medicare & Medicaid Services (CMS). See
42 U.S.C. § 1395h; 42 C.F.R. § 421.5. Providers, for their part,
must certify compliance when submitting claims, enrollment
forms, and cost reports. See 42 C.F.R. § 413.24(f)(4)(iv). That
includes furnishing sufficient information to determine the
amount due and ensure claims comply with Medicare
regulations. See id. § 424.5(a)(5). Fraudulent claims,
including those tainted by violations of the AKS or the Stark
Law, can trigger liability under the FCA.

-- 5 of 33 --

6
C.
Ramiro Lozano Jr. and his business partner, Jay Balentine,
jointly own, operate, and control eight SNFs across Texas.4
Terri R. Winnon is a former math teacher with no prior
experience in health care accounting who began working as an
assistant to Lozano in January 2009. Over time, Lozano
promoted her to Executive Assistant and Controller, granting
her access to the financial operations of the SNFs under his
control. While familiarizing herself with the facilities’
practices, Winnon noticed irregularities that raised questions
about the integrity of Medicare and Medicaid reimbursements.
After raising these concerns directly with Lozano, Winnon
was terminated in February 2016. She subsequently filed this
qui tam action under seal in November 2017 and amended her
complaint twice, eventually naming seventeen defendants,
including Lozano, Balentine, eight SNFs (together, the SNF
Defendants), RehabCare Group East, LLC (RehabCare), and
six physicians (Physicians). Winnon says the defendants
collectively orchestrated a scheme to maximize profits by
exploiting Medicare and Texas Medicaid in violation of the
FCA and Texas Law.
4 The SNFs include: RJ Meridian Care Alta Vista, LLC (RJ
Alta Vista), RJ Meridian Care of Galveston, LLC (RJ
Galveston), RJ Meridian Care of Alice, Ltd. (RJ Alice), RJ
Meridian Care of Hebbronville, Ltd. (RJ Hebbronville), and RJ
Meridian Care of San Antonio, Ltd. (RJ San Antonio). In
addition, Lozano serves as the registered agent for three
facilities owned by other entities: Meridian Care of San
Antonio III, LLC (San Antonio III), Spanish Meadows of Katy,
Ltd. (Katy Facility), and Empire Spanish Meadows, Ltd.
(Empire Spanish Meadows).

-- 6 of 33 --

7
1.
Winnon’s first set of allegations concern a “kickback”
scheme—money exchanged for patient referrals. She claims
that SNF Defendants paid unlawful remuneration through three
channels: employee bonuses to increase Medicare patient
numbers, “sham” medical directorships, and “marketing gifts”
to hospital discharge planners. First, she says SNF Defendants
offered bonuses to employees who hit Medicare census targets.
As support, she references that employee “A.M.” became
eligible for “census” pay on January 1, 2015, and, per a
February 1, 2016, email from Lozano, received a $1,000 bonus
in April 2016 for meeting the goal.
Next, Winnon highlights Lozano’s relationships with
doctors at SNFs under his watch. She recalls him discussing
dinners with physicians, including one in Brownsville, Texas,
after which he returned to the corporate office in Spring, Texas,
and expressed hope that he had “secured” another doctor. She
then points to invoices from January 2013 to May 2015
reflecting static monthly payments—$1,200, $1,500, $2,500,
or $3,000—to four medical directors at Empire Spanish
Meadows. In her view, these payments were made without
written compensation agreements specifying the medical
directors’ pay or duties, and the invoices themselves were quite
literally blank, listing no descriptions of services rendered.
According to Winnon, those four medical directors
pocketed $160,000 over two and a half years, and a fifth was
added by late 2015—an oddity, given that Empire Spanish
Meadows had fewer beds than the Katy Facility but somehow
needed more medical directors. She asks the court to infer that
the additional medical directors were being paid for something
other than legitimate services. And, as a final accusation, she
notes that the Katy Facility was simultaneously paying one

-- 7 of 33 --

8
medical director $2,000 per month while also shelling out
$3,000 per month to the same person as a “nursing consultant.”
Finally, Winnon claims that from 2013 through May 2015,
Empire Spanish Meadows funneled thousands of dollars to
hospital discharge planners under the guise of “marketing
gifts”—including, among other things, alcohol, food, and
advertisements—to ensure a steady stream of patient referrals.
And, in the end, Winnon alleges that these improper payments
violated both the AKS, the Stark Law, and Texas Law.
2.
Winnon’s second set of allegations target the manipulation
of therapy services by RehabCare, a contracted therapy
provider for the SNFs. Once Lozano’s facilities admitted
referred hospital patients, RehabCare allegedly billed for
therapy services, and the SNFs, in turn, sought Medicare
reimbursements using the Resource Utilization Group (RUG)
classification system.5 Winnon contends that RehabCare
systematically gamed this system by artificially inflating
patient therapy hours and intensity to push patients into higher
5 The RUG-IV classification system includes 66 payment
coding levels for SNF patients, divided into eight categories—
two for therapy services and six for “little or no therapy.”
Patients are assigned a three-character code based on their care
requirements. The first character represents therapy services;
the second character indicates the level of therapy required
each week (e.g., physical, occupational, or speech therapy);
and the third character reflects the patient’s minimum activity
of daily living (ADL) score. Daily payment rates generally
increase for therapy RUGs compared to non-therapy RUGs, for
higher amounts of weekly therapy, and for higher ADL scores
or more extensive services.

-- 8 of 33 --

9
RUG categories, maximizing reimbursement. For example, the
Katy Facility allegedly billed 81.8% of its patients at the Ultra-
High therapy level in 2014, a figure that landed it in the top 1%
of SNFs nationwide. In her eyes, these padded invoices from
RehabCare did not stop there—they were passed up the chain
to the government through the SNFs’ reimbursement claims.
However, Winnon faces the challenge of distinguishing her
allegations from those aired in the Halpin action, a prior health
care fraud suit. See United States ex rel. Halpin & Fahey v.
Kindred Healthcare, Inc., No. 11-12139-RGS (D. Mass.).
After the United States and Texas declined to intervene in
Winnon’s qui tam suit, the district court unsealed portions of
the Halpin complaint. That complaint revealed RehabCare’s
marching orders to its program directors: assign Ultra-High
RUG levels to all new patients—without regard to clinical
need—because higher reimbursements meant higher profits.
Winnon, for her part, claims the scheme did not stop there, but
spread to several SNFs, including RJ Alice, RJ Hebbronville,
and RJ Galveston, where RehabCare systematically steered
patients into inflated RUG levels.
Each group of defendants moved to dismiss, arguing that
Winnon’s claims failed under the FCA’s public disclosure bar,
31 U.S.C. § 3730(e)(4), or did not meet the heightened pleading
requirements of Rule 9(b). J.A. 1105–43. The district court
dismissed Winnon’s allegations against RehabCare, finding
they were previously disclosed to the public in the Halpin
action. See United States v. Lozano, No. 17-2433, 2023 WL
6065161, at *1 (D.D.C. Sep. 18, 2023). The district court also
dismissed Winnon’s allegations against the SNF Defendants
for failing to meet Rule 9(b)’s particularity requirements. See
United States v. Lozano, No. 17-2433, 2023 WL 6065162, at
*1 (D.D.C. Sep. 18, 2023). Winnon timely appealed all rulings
except those against the Physicians. J.A. 1144–46.

-- 9 of 33 --

10
II.
We have jurisdiction to review. 28 U.S.C. § 1291. We
review the district court’s dismissal of a complaint for failure
to state a claim de novo. See United States ex rel. Shea v.
Cellco P’ship, 863 F.3d 923, 932 (D.C. Cir. 2017). We view
the facts in the light most favorable to Relator Terri R. Winnon
as required at this stage. United States ex rel. Heath v. AT&T,
Inc., 791 F.3d 112, 117 (D.C. Cir. 2015) (citing Navab–Safavi
v. Glassman, 637 F.3d 311, 318 (D.C. Cir. 2011)).
To survive a motion to dismiss, 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, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). A claim is “plausible on its face” when the
pleaded facts allow the court to “draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Id.
While this standard does not amount to a “probability
requirement” it does require “more than a sheer possibility that
a defendant has acted unlawfully.” Id. The court “assumes the
truth of all well-pleaded factual allegations in the complaint
and construes reasonable inferences from those allegations in
the plaintiff’s favor.” Sissel v. U.S. Dep’t of Health & Hum.
Servs., 760 F.3d 1, 4 (D.C. Cir. 2014).
A.
We turn first to the district court’s dismissal of Winnon’s
claims against RehabCare.6 The public disclosure bar is a two-
part test that is simple in form yet often intricate in application.
6 We decline to address supplemental jurisdiction over any
remaining state law claims because Winnon’s FCA claims
against RehabCare are federal. See 28 U.S.C. § 1367(c)(3).

-- 10 of 33 --

11
First, we ask whether the allegations or transactions are
“substantially similar” to publicly disclosed information. See
Shea, 863 F.3d at 933. If so, the inquiry shifts to whether the
relator qualifies as an “original source.” See United States ex
rel. Davis v. D.C., 679 F.3d 832, 835–36 (D.C. Cir. 2012);
United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14
F.3d 645, 651 (D.C. Cir. 1994).
Before 2010, the public disclosure bar was jurisdictional,
depriving courts of authority to hear claims based on
previously disclosed fraud. 31 U.S.C. § 3730(e)(4)(A) (1986).
However, we clarified in United States ex rel. O’Connor v.
USCC Wireless Inv., Inc., 128 F.4th 276, 284–85 (D.C. Cir.
2025), that the 2010 amendments removed this jurisdictional
restriction, making the bar an affirmative defense that must be
asserted by the defendant and may be opposed by the
government. Accord Csepel v. Republic of Hungary, 714 F.3d
591, 608 (D.C. Cir. 2013).
1.
We conclude that RehabCare sufficiently raised an
affirmative defense because Winnon’s RUG upcoding
allegations were publicly disclosed in the Halpin action. The
parties do not dispute that the public disclosure bar mandates
dismissal when “substantially the same allegations or
transactions” have already been disclosed in a federal “civil . .
. hearing . . . report . . . or news media” publication where the
government [or] its agent is a party. See 31 U.S.C.
§ 3730(e)(4)(A)(i–iii). This provision shuts the courthouse
door on “parasitic” lawsuits that add nothing to what is already
public knowledge. See Shea, 863 F.3d at 926. Our inquiry asks
whether the government has enough information to investigate,
or whether the disclosure may have put law enforcement on the

-- 11 of 33 --

12
trail of fraud? See O’Connor, 128 F.4th at 285 (citation
omitted). If the answer to either question is yes: case closed.
The framework comes from Springfield Terminal: a
“transaction” consists of multiple elements that, when
combined, give rise to an inference of fraud. See United States
ex rel. Oliver v. Philip Morris USA Inc. (Oliver I), 763 F.3d 36,
40 (D.C. Cir. 2014) (citing Springfield Terminal, 14 F.3d at
654). Allegations of fraud require disclosure of all elements to
invoke the public disclosure bar. Id. And if all elements are
not disclosed publicly, a qui tam plaintiff may fill the gap by
alleging the missing elements or directly asserting fraud.
Springfield Terminal, 14 F.3d at 654–55.
FCA fraud follows a basic formula: the elements are “who,
what, when, and where” detailing the circumstances of the
fraud scheme. Heath, 791 F.3d at 124. The “who” is the
fraudster; the “what” is the scheme itself; and, the “when” and
“where” are the scheme’s temporal and geographic
coordinates. When these pieces come together, they form a
complete picture—one sufficient to warrant an inference of
fraud and, if disclosed early enough, avoid the public
disclosure bar. Springfield Terminal, 14 F.3d at 654.
Here, every single element Winnon alleges was previously
disclosed in the Halpin action. Her complaint alleges that
RehabCare (who) “frequently claimed, without justification, to
provide the highest and most expensive levels of care” (what)
between 2009 and 2016 (when) at specific Texas SNFs
(where), leading to the inference of systematic upcoding of
Medicare claims submitted for reimbursement (FCA fraud).
Meanwhile, the Halpin complaint alleged that RehabCare
(who) submitted false Medicare claims (FCA fraud) for
services that were unreasonable, unnecessary, or never
provided (what) during the relevant period (when) at SNFs

-- 12 of 33 --

13
nationwide (where). J.A. 401. In this case, the central actor is
the same. The scheme is the same. The allegations are
materially identical.
Winnon attempts to dodge the bar by nitpicking the
“when” and “where.” She says that identifying eight specific
Texas facilities makes her case distinct because her facilities
were excluded from the broader category of the roughly 498
SNFs detected in Halpin. Not so. We have long held that
identifying additional examples of an already-exposed scheme
does not breathe life into an otherwise barred claim. See Davis,
679 F.3d at 838. Because the Halpin complaint alleged that
RehabCare’s fraud spanned SNFs “across the United States”—
which, in our view, includes Texas—Winnon’s claim that
Halpin did not name her facilities is without merit.
The same is true for Winnon’s timeframe argument. The
Halpin action addressed fraudulent conduct by RehabCare
from January 1, 2009, to July 6, 2015. J.A. 275–82. Winnon’s
allegations, spanning January 2009 to February 2016, extend
that window by a mere seven months. That is not a material
distinction because time differences do not erase a disclosure
of fraud. See United States ex rel. Oliver v. Philip Morris USA
Inc. (Oliver II), 826 F.3d 466, 473 (D.C. Cir. 2016) (explaining
that time differences do not negate the disclosure of a general
fraudulent practice); see also United States ex rel. Schweizer v.
Canon, Inc., 9 F.4th 269, 276 (5th Cir. 2021) (collecting cases)
(affirming dismissal where allegations merely extended the
timeframe and contributed “more of the same” without
materially altering the fraudulent scheme (cleaned up));
Bellevue v. Universal Health Servs. of Hartgrove, Inc., 867
F.3d 712, 720 (7th Cir. 2017) (finding allegations substantially
similar where the fraud continued into subsequent years as part
of a “continuing practice” and did not involve genuinely new
or materially different information). When a fraud is disclosed

-- 13 of 33 --

14
publicly, it is exposed—whether it lasted a day longer or a year
longer does not change that fact.
Winnon’s problems do not stop there. She concedes that
a corporate integrity agreement (Agreement) existed between
RehabCare and the U.S. Department of Health and Human
Services Office of Inspector General (HHS/OIG), which was
publicly available from January 22, 2016, to June 27, 2021.
J.A. 611–53. That Agreement—qualifying as both an “audit”
and “federal report” under the FCA—addressed the same
misconduct and mandated RehabCare’s compliance measures.
See, e.g., United States ex rel. Maur v. Hage-Korban, 981 F.3d
516, 522–24 (6th Cir. 2020); 31 U.S.C. § 3730(e)(4)(A)(ii). In
short, the Agreement required RehabCare to audit SNF claims
for “medical necessity”—the very same fraud Winnon alleges.
Compare J.A. 648 with J.A. 55–56.
And if that weren’t enough, Winnon herself acknowledges
a government press release announcing the Halpin action
settlement. J.A. 50. A press release from the government
announcing the fraud is about as public as public can get.
Together, these publicly available sources negate any claim
that Winnon’s allegations are not substantially similar.
Bottom line: The who, what, when, and where of
Winnon’s allegations are a retread of Halpin, minor differences
notwithstanding. Because each of these elements were already
disclosed in Halpin, Winnon’s allegations neither lead to a new
inference of fraud nor a novel assertion of the FCA fraud itself
that was not already apparent to the government. That is
enough to satisfy the Springfield Terminal test, triggering the
public disclosure bar. One question remains—whether
Winnon qualifies as an original source. We turn to that next.

-- 14 of 33 --

15
2.
Once public disclosure is established, the burden shifts—
by necessity and by law—to the relator to prove she qualifies
as an original source. See Smith v. United States, 568 U.S. 106,
112 (2013) (“Where the facts with regard to an issue lie
peculiarly in the knowledge of a party, that party is best situated
to bear the burden of proof.” (cleaned up)); see also O’Connor,
128 F.4th at 287. The statute provides two clear pathways to
original source status: either the relator, before public
disclosure, “voluntarily disclose[s] to the [g]overnment the
information on which allegations or transactions . . . are based,”
or the relator “has knowledge that is independent of and
materially adds to the publicly disclosed allegations or
transactions, and . . . has voluntarily provided th[is]
information to the [g]overnment before filing an action.” 31
U.S.C. § 3730(e)(4)(B). The statute is explicit. The
requirement is not flexible. And failure to meet either of these
conditions is fatal. See Davis, 679 F.3d at 839 & n.4. Winnon
meets neither.
Both pathways are closed because Winnon does not allege,
with any specificity, that she voluntarily provided the relevant
information to the government before the Halpin action or
filing her qui tam suit. Instead, she recites the statutory
elements as if saying them makes them so: she claims that a
“written disclosure statement setting forth all material evidence
and information Relator possesses has previously been
submitted as required by 31 U.S.C. § 3730(b)(2)” and that she
“complied with all conditions precedent to bringing this
action.” J.A. 13. In place of pleading facts, Winnon instead
calls for legal conclusions. See Twombly, 550 U.S. at 555;
Iqbal, 556 U.S. at 678. Even if we are charitable and assume
she refers to the summary provider report on ultra-high therapy
codes, J.A. 51, she still fails to allege when she disclosed it or

-- 15 of 33 --

16
to whom. Those are not trivial omissions; they are the very
facts that determine whether she clears the statutory bar. She
does not.
Winnon also fails to allege that her knowledge was
independent. She relies on publicly accessible data—such as
provider summary reports and monthly facility data—which
undermines any assertion of independent knowledge. See
Springfield Terminal, 14 F.3d at 656 (“‘Independent
knowledge’ is knowledge that is not itself dependent on public
disclosure.”). And Winnon’s admission that this data is
available nationwide eviscerates any assertion that she
obtained this information independently. J.A. 52. At most, her
complaint repackages publicly disclosed information, placing
her squarely within the public disclosure bar. And mere
repackaging is not enough. As we have held, “a relator cannot
overcome the public disclosure bar by contributing
‘speculation, background information or collateral research’”
to existing public information. Shea, 863 F.3d at 934 (quoting
Oliver II, 826 F.3d at 479). Winnon offers nothing to show her
knowledge is truly independent—distinct from and materially
additive to the public record—as required under the FCA. See
Oliver II, 826 F.3d at 476.
Even assuming, arguendo, that she gathered the
information independently, Winnon’s allegations fail to
materially add anything to the information disclosed in the
Halpin action. In line with our sister circuits, we recently held
that a “material addition” is information that is “sufficiently
significant or essential” to influence the government’s decision
to prosecute. O’Connor, 128 F.4th at 288–89 (citing United
States ex rel. Winkelman v. CVS Caremark Corp., 827 F.3d
201, 211 (1st Cir. 2016)). That means a relator who “merely
adds detail or color” to preexisting claims fails to meet this
threshold. Id. at 18. At best, Winnon’s references to new

-- 16 of 33 --

17
timeframes and specific SNF locations amount to little more
than additional examples of a scheme already disclosed in the
Halpin action. These minor variations fail to materially alter
the fraudulent scheme’s core as revealed in Halpin.
The public disclosure bar prevents relators from
repackaging publicly available information. Because
Winnon’s allegations do not materially alter what was already
disclosed, and she neither alleges with specificity that she
voluntarily provided the relevant information to the
government before Halpin nor pleads when or to whom she
disclosed it, she does not qualify as an original source. We
therefore affirm the district court’s dismissal of claims against
RehabCare.
B.
We turn now to the district court’s dismissal of Winnon’s
claims against SNF Defendants. This Court has long held that
a qui tam plaintiff must properly allege fraud under Rule 9(b)
to state a claim under the FCA. See United States ex rel.
Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1256
(D.C. Cir. 2004) (citing United States ex rel. Totten v.
Bombardier Corp., 286 F.3d 542, 551–52 (D.C. Cir. 2002)).
Rule 9(b) requires a relator to “state with particularity the
circumstances constituting fraud.” Fed. R. Civ. P. 9(b).
Particularity requires more than vague allegations and
sweeping assertions. A complaint must provide enough detail
to “guarantee all defendants sufficient information to allow for
preparation of a response” by alleging the “time, place, and
manner” of the fraud. Heath, 791 F.3d at 123 (citing Martin-
Baker Aircraft Co., 389 F.3d at 1256).
This does not mean, however, that a relator must list every
fraudulent invoice. We have recognized that “precise details

-- 17 of 33 --

18
of individual claims are not, as a categorical rule, an
indispensable requirement of a viable [FCA] complaint.”
Heath, 791 F.3d at 126. But the rule is not an empty formality.
A relator must still provide “particular details of a scheme to
submit false claims paired with reliable indicia that lead to a
strong inference that claims were actually submitted.” Id.
(citation omitted). That is the bar, and it must be met to prevent
litigation by ambush and to protect defendants from meritless
accusations of fraud. See id.
Winnon’s FCA claims fall into two categories: (1)
allegations of unlawful remuneration under the AKS and the
Stark Law, and (2) the RUG upcoding scheme.
1.
Winnon argues that SNF Defendants violated the AKS by
providing remuneration to employees and hospital staff to
induce patient referrals reimbursable by Medicare and
Medicaid, and the Stark Law by paying medical directors. J.A.
26–37. At the outset, Winnon’s claims fail on one fundamental
point: the AKS and the Stark Law, do not in themselves, create
private causes of action. Quite the reverse, these statutes are
enforced exclusively by the government; no private
individual—whether a qui tam relator or anyone else—may
bring an action for their violation standing alone.
To be sure, the Justice Department may prosecute offenses
under the AKS, subjecting offenders to criminal penalties,
including up to ten years of imprisonment and fines as high as
$100,000 per violation. See 42 U.S.C. § 1320a-7b(b). Liability
attaches to any claim resulting from Section 1320a-7b(b),
which “constitutes a false or fraudulent claim” Id. § 1320a-
7b(g). Similarly, the OIG and CMS wield civil enforcement
authority, capable of imposing treble damages, fines, and

-- 18 of 33 --

19
exclusions from federal health care programs. Id. § 1320a-7a.
The Stark Law, a strict liability statute, likewise provides for
civil penalties and demands repayment for improperly
reimbursed Medicare claims. Id. § 1395nn(g). But because
these statutes do not authorize private suits, a relator has no
standing to bring an action based purely on violations of the
AKS or Stark Law.
That said, a qui tam relator may invoke the FCA as a
vehicle for pursuing claims arising from AKS or Stark Law
violations, but only when those violations result in the
submission of false claims to the federal government. 31
U.S.C. § 3729(a)(1)(A). The Affordable Care Act solidified
the connection between the AKS and the FCA, providing that
“a claim that includes items or services resulting from a
violation of [the AKS] constitutes a false or fraudulent claim”
under the FCA. See 42 U.S.C. § 1320a-7b(g). Likewise, a
Stark Law violation can trigger FCA liability under the
“implied false certification theory” when a party falsely
certifies compliance with Medicare’s requirements, rendering
the claim for reimbursement false.7 See Universal Health
Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 186,
190 (2016). But we must not veer off course: although the FCA
permits qui tam actions, a relator cannot pursue a standalone
action under the AKS or Stark Law—the FCA’s power arises
only when these violations result in false claims submitted to
the government.
7 “[L]iability can attach when the defendant submits a claim for
payment that makes specific representations about the goods or
services provided, but knowingly fails to disclose the
defendant’s noncompliance with a statutory, regulatory, or
contractual requirement. In these circumstances, liability may
attach if the omission renders those representations
misleading.” 579 U.S. at 181.

-- 19 of 33 --

20
First, Winnon claims that SNF Defendants incentivized
employees to increase Medicare patient referrals, citing one
employee who qualified for “census” pay in 2015 and received
a $1,000 bonus in 2016. But at most, these allegations, when
accepted as true, establish only that an employee was
incentivized to obtain referrals and was paid for doing so. The
problem is that we cannot infer that referrals were obtained by
SNF Defendants absent identification of the Medicare patient.
That aside, nothing alleged suggests that services were actually
provided to referred patients resulting in claims submitted for
reimbursement. Cf. United States ex rel. Barrett v.
Columbia/HCA Healthcare Corp., 251 F. Supp. 2d 28, 35
(D.D.C. 2003) (finding Rule 9(b) unmet absent identification
of the Medicare patient in the scheme).
Second, Winnon presumes that SNF Defendants increased
their Medicare patient population by offering medical
directorship arrangements to referring physicians. J.A. 27. By
challenging the consistent monthly stipends paid to medical
directors, she argues that these payments were improper
because the invoices lacked details about the services rendered
or the time spent. And her theory is based on overhearing
Lozano discuss attending dinners with doctors coupled with,
on one occasion, observing him return from dinner and express
hope that he had secured an additional physician. Id. Then, in
a separate conversation, Winnon alleges that Lozano told her
he needed to “keep the doctors happy.” Id. As support,
Winnon points to two additional facts: (1) physicians hired as
medical directors received a fixed monthly salary, which she
found suspicious because consistent pay implied identical
services each month; and (2) the Empire Spanish Meadows
Facility, despite having fewer beds than the Katy Facility,
employed five times as many medical directors. She contends
that these factors suggest improper remuneration for referrals.

-- 20 of 33 --

21
However, her complaint lacks the critical details necessary
to state a plausible claim. We agree with the district court’s
survey of Kaczmarcyk, where that court found that the
complaint provided sufficient detail under Rule 9(b) of the
alleged scheme because the government alleged how the
medical directorships agreements were a sham. See United
States ex rel. Kaczmarcyk v. SCCI Health Servs. Corp., Civ.
No. H-99-1031, 2004 WL 7089810, at *4–7 (S.D. Tex. Mar.
11, 2004). The court explained that three of the physicians
hired as medical directors admitted approximately fifty percent
of the patients during a specified period; the medical directors
were compensated at a rate exceeding fair market value for the
services they were expected to perform; and past referrals were
used to set contract rates. Id. at *4–5.
Here, Winnon’s complaint fails to identify any specific
agreements conditioning payment to medical directors on
referrals. Instead, she only points to an email exchange
showing that the agreements could not be found. Beyond that,
she does not allege when or where such agreements were made
or explain how these payments resulted in claims submitted to
Medicare or Medicaid. Cf. United States ex rel. Grubbs v.
Kanneganti, 565 F.3d 180, 191–92 (5th Cir. 2009) (explaining
that the relator alleged specific details of “the date, place, and
participants [of a] dinner meeting at which two doctors . . .
attempted to bring him into the fold” of the scheme); Riedel,
332 F. Supp. 3d at 71 (referencing the relator’s presence at a
Board of Directors meeting where paying fees to physicians
and never billing patients was discussed). While she speculates
that these arrangements were made over dinner, nothing
Lozano said elevates that assumption beyond conjecture.
And although the court notes the static nature of the
payments, Winnon offers only the assertion that such

-- 21 of 33 --

22
consistency was “unlikely”—a far cry from establishing a
nexus between the payments and services rendered. It is
troubling that the invoices were blank, but suspicion alone does
not suffice. These allegations, even taken together, do not
transform conjecture into the “reliable indicia” required to
show that remuneration influenced referrals and led to false
claims. Heath, 791 F.3d at 126. Without these essential
details, her claims rest on speculation rather than fact.
The same is true of Winnon’s assertions that Empire
Spanish Meadows had fewer beds than the Katy Facility but
more medical directors, and that the Katy Facility
simultaneously paid one medical director $2,000 per month
and an additional $3,000 per month to the same individual as a
“nursing consultant.” Although Winnon’s allegations hint at
irregularities in the payment structure at these facilities,
nothing alleged here connects these payments to false claims
submitted for reimbursement to Medicare or Medicaid.
Third, Winnon’s allegations regarding the “marketing
gifts” come close but ultimately fall short. She provides a table
listing purported gifts and inducements, alleging they were
given to hospital doctors and discharge planners who were in
the position to influence referrals to SNF Defendants’ facilities.
She further claims SNF Defendants had a financial incentive to
induce referrals, as they “made millions each year off
Medicare,” with Lozano and Balentine personally profiting.
From this, she asks the court to infer two things: (1) that the
remuneration “would not have continued over the course of
several years had [it] not resulted in referrals,” and (2) that the
persistence of these payments suggests that patient referrals led
to false claims. J.A. 36–37. Not quite.
Her argument has some intuitive appeal. Businesses do not
typically spend money on something that yields no return. And

-- 22 of 33 --

23
she does offer some particular details: she identifies specific
gifts, dates, and the individuals receiving them. But Rule 9(b)
demands more than details; it requires a bridge between those
details and the submission of false claims. Heath, 791 F.3d at
126.
By comparison, in Thomas, the relators alleged that:
defendants paid the medical directors varying rates based on
the value and volume of each referral; fake time entries and
compensation sheets were created that were different from the
actual time physicians worked; medical director pay was
reduced when referrals decreased; and specific patients
referred by specific medical directors in exchange for
remuneration with dates patients were admitted. See United
States ex rel. Thomas v. St. Joseph Hospice, LLC, No. 2:16-cv-
143, 2019 WL 1271019, at *10 (S.D. Miss. Mar. 19, 2019).
That bridge is missing here. Although Winnon offers
partial, particularized facts and some indicia of inducement,
she furnishes little basis for the strong inference she asks the
court to draw. She assumes that because payments persisted,
they must have resulted in referrals, and that those referrals
must have led to false claims. But nothing ties those payments
to actual claims submitted for Medicare reimbursement.
Winnon needed to provide particular details about the
Medicare patients and the dates they were admitted. We can
only infer that the marketing gifts were payment for the missing
patient referrals. We agree with the district court that
Winnon’s claims are closer to those in Emanuele, where the
court found that the general number of referrals could not be
connected to the particular medical directors, deeming the
information provided insufficient to meet the Rule 9(b)
standard. See Emanuele v. Medicor Assocs., No. 10-cv-245,
2013 WL 3893323, at *8 (W.D. Pa. July 26, 2013).

-- 23 of 33 --

24
Curious minds may ask, what else were these gifts for, if
not referrals? A fair question, but one that distracts from the
main point. Rule 9(b) is not about rhetorical flourishes—it
demands specificity or at least enough for the court to make a
strong inference. Suppose, for instance, a hospital discharge
planner directed referrals to one of Lozano’s facilities after
receiving a gift. That patient may or may not have been
admitted. More importantly, no facts show whether claims
were actually submitted for that referral. Grubbs, 565 F.3d at
190 (“A hand in the cookie jar does not itself amount to fraud
separate from the fib that the treat has been earned when in fact
the chores remain undone.”). So, even if Winnon sufficiently
alleged an intent to induce referrals, intent alone does not
establish a FCA violation.
In sum, perhaps the answer rests with the missing reliable
indicia—facts that allege communications discussing a quid
pro quo, records tracking referrals post-gift, or examples of
distinct positive trends of patients whose admission and billing
can be traced to the alleged inducements. Winnon provides
none of that. From her allegations we glean inferences—
faintly, with squinted eyes. Unfortunately, without concrete
allegations connecting the remuneration to actual false claims,
her theory remains just that—a theory.8 Thus, the district
court’s dismissal of Winnon’s remuneration claims is valid.
2.
Next up are the inflated therapy billing claims. Winnon
alleges that SNF Defendants conspired with RehabCare to
8 Without sufficient allegations that false claims were
submitted, Winnon has no viable FCA violation. We therefore
decline to address her arguments on scienter and vicarious
liability, as they bear no impact on the outcome.

-- 24 of 33 --

25
systematically inflate RUG classifications to maximize
Medicare reimbursements. She cites, for instance, the Katy
Facility’s billing of 81.8% of its patients at the Ultra-High
therapy level in 2014—placing it in the top 1% of SNFs
nationally—and an average of 42.9 days of Ultra-High therapy
per patient, nearly double the national average. Similar
allegations target the RJ Alice Facility, where Winnon
contends that RehabCare manipulated therapy classifications
for financial gain.
We conclude that Winnon’s reliance on statistical
anomalies falls short of satisfying Rule 9(b)’s heightened
pleading standard. While statistics may be alleged as a
“reliable indicia” of fraud, they alone do not meet Rule 9(b)
unless accompanied by specific details of the fraudulent
scheme. See Heath, 791 F.3d at 126 (quoting Grubbs, 565 F.3d
at 190); Carrel v. AIDS Healthcare Found., 898 F.3d 1267,
1277 (11th Cir. 2018) (explaining that relators cannot “rely on
mathematical probability to conclude that the [defendant]
surely must have submitted a false claim at some point”). Such
details must, at the very least, provide concrete examples of
false claims submitted to the government and may include
specificity regarding dates, claim amounts, and the patients
involved. By contrast, we agree that complaints that pair
statistical anomalies with concrete evidence—say, pre-printed
billing codes linked to specific patient cases—sufficiently meet
this standard. See, e.g., United States ex rel. Harris v. Bernad,
275 F. Supp. 2d 1, 4 (D.D.C. 2003).
In short, while Winnon’s statistical references may raise a
red flag, they do not establish that the inflated RUG
classifications resulted in false claims. Winnon fails either to
provide specific examples of improperly classified patients or
explain how the fraudulent scheme was executed. Because she
relies on comparisons to national averages without identifying

-- 25 of 33 --

26
particular claims for reimbursement, she falls short of the
“reliable indicia” required under Rule 9(b). Moreover,
although she identifies three patients from the RJ Alice Facility
as examples of overbilling, she does not show why the services
provided were medically unnecessary or unreasonable under
Medicare guidelines. Without such particulars—patient
diagnoses, dates of service, or exact claim amounts—her
allegations remain conclusory.
Thus, while the statistical anomalies suggest potential
issues, they fall far short of the detailed factual connection
necessary to show that fraud was committed. The district
court’s dismissal of these inflated therapy billing claims is,
therefore, proper. 9
III.
For the foregoing reasons, we affirm the district court’s
judgments dismissing Winnon’s claims.
So ordered.
9 Because we affirm the district court’s dismissal of all
Winnon’s federal claims, we decline to exercise supplemental
jurisdiction over any remaining state law claims. See 28 U.S.C.
§ 1367(c)(3).

-- 26 of 33 --

KATSAS, Circuit Judge, concurring in part and dissenting
in part: This False Claims Act case involves services provided
at skilled nursing facilities (SNFs). The defendants include
eight affiliated SNFs, two of their owners, and a contractor that
provided therapy at the facilities. Relator Terri Winnon alleges
that the facilities and the contractor jointly submitted false
claims to the government for therapy services provided by the
contractor. Winnon further alleges that the facilities paid
physicians and others unlawful kickbacks, through marketing
gifts and sham medical directorships, in exchange for patient
referrals. The district court dismissed the claims against the
contractor based on the FCA’s public-disclosure bar, and it
dismissed the claims against the SNF defendants for failure to
satisfy heightened pleading standards. My colleagues affirm
the dismissals in full. I would affirm as to all claims except
those based on the marketing gifts.
I
The district court properly dismissed the claims against the
contractor, RehabCare Group East, LLC, based on the public-
disclosure bar. In pertinent part, the bar requires dismissal of
FCA claims if “substantially the same allegations or
transactions as alleged in the action or claim were publicly
disclosed,” unless the relator was an “original source” of the
disclosed information. 31 U.S.C. § 3730(e)(4)(A). As my
colleagues explain, this case rests on “substantially the same
allegations or transactions” already disclosed in prior litigation
against RehabCare. Likewise, the complaint alleges no facts
supporting a plausible inference that Winnon qualifies as an
“original source.” Subject to two small caveats, I agree with
my colleagues’ reasoning on these points.
First, my colleagues analyze the claims against RehabCare
under current law. These claims arise from services allegedly

-- 27 of 33 --

2
provided and billed from January 2009 through February 2016.
Congress substantially amended the public-disclosure bar on
January 23, 2010, see Pub. L. No. 111-148, § 10104, 124 Stat.
119, 901–02, and did not make the amendments retroactive.
The earlier version of the bar thus applies to claims that
RehabCare submitted before January 23, 2010. The
amendments clarified the prior governing standard, see United
States ex rel. O’Connor v. USCC Wireless Inv., Inc., 128 F.4th
276, 284–85 (D.C. Cir. 2025), so the change in law does not
materially affect the case for dismissal here. But for claims
governed by the pre-amendment bar, the dismissal should be
for lack of jurisdiction. See 31 U.S.C. § 3730(e)(4)(A) (1986);
O’Connor, 128 F.4th at 284.
Second, in making the public-disclosure bar an affirmative
defense, the 2010 amendments introduced some procedural
complications. The complaint here did not need to anticipate
and rebut the public-disclosure bar as a possible affirmative
defense. See de Csepel v. Republic of Hungary, 714 F.3d 591,
608 (D.C. Cir. 2013). And the defendants filed a motion to
dismiss for failure to state a claim, before even raising the
defense in an answer. Nonetheless, dismissal is proper where
“the facts that give rise to the defense are clear from the face
of the complaint.” O’Connor, 128 F.4th at 285. Here, the
complaint affirmatively invoked the prior litigation against
RehabCare, and thus alleged the facts giving rise to the
defense. As for the original-source question, the relator must
plead and prove that point, which is an exception to the defense
and turns on facts most likely known by the relator. See id. at
287. Given this scheme, I do not think the complaint needed
to anticipate the defense and plead facts to establish the
original-source exception. But once the defendants established
the public-disclosure bar based on allegations in the complaint,

-- 28 of 33 --

3
it became the relator’s burden to establish the exception, either
based on the complaint or by seeking leave to amend it.
Winnon claims to be an “original source” under the second
prong of the governing definition, which extends to individuals
who have “independent” information that “materially adds” to
the publicly disclosed allegations and who “voluntarily
provided” the information to the government before filing the
complaint. 31 U.S.C. § 3730(e)(4)(B). The complaint here
does claim that Winnon is an original source. J.A. 13. But as
my colleagues explain, its allegations on that point are
conclusory. And although Winnon seeks a remand to file an
amended complaint, she does not explain how any amendment
would expand the original-source allegations in her current,
twice-amended complaint. Nor did she provide any such
explanation to the district court. Under these circumstances,
the district court did not abuse its discretion in dismissing
without leave to amend. See, e.g., Firestone v. Firestone, 76
F.3d 1205, 1208 (D.C. Cir. 1996); Rollins v. Wackenhut Servs.,
Inc., 703 F.3d 122, 130–31 (D.C. Cir. 2012).
II
Two sets of claims against the SNF defendants were
properly dismissed, but a third was not.
First, the district court properly dismissed claims that the
SNF defendants submitted false claims for services provided
by RehabCare. In my view, the public-disclosure bar
forecloses these claims, because the prior litigation had alleged
that RehabCare caused skilled nursing facilities “to submit
false claims to Medicare for therapy services” that RehabCare
provided at those facilities. J.A. 401. And the only evidence
that Winnon claims to have provided the government as an

-- 29 of 33 --

4
original source indicates that one of the SNF defendants “billed
an incredibly high rate of ultra-high therapy codes during
2014.” Id. at 51. Without more, that information neither
materially adds to previously disclosed allegations nor alleges
a plausible and particularized case of fraud.
Second, the district court properly dismissed claims that
the SNF defendants used sham medical directorships to pay
doctors in exchange for patient referrals. On this point,
Winnon’s case for fraud rests on violations of statutes barring
Medicare providers from paying third parties to induce patient
referrals. However, these statutes expressly permit
compensation arising from “bona fide employment
relationship[s].” 42 U.S.C. § 1320a-7b(b)(3)(B); id.
§ 1395nn(e)(2). And the complaint does not allege facts
supporting a plausible inference that the directorships were
anything other than bona fide employment, for reasons my
colleagues explain.
Finally, the district court erred in dismissing claims against
the SNF defendants based on what they themselves describe as
marketing gifts paid to local doctors and hospital discharge
planners. These claims lie at the intersection of the FCA and
the Anti-Kickback Statute (AKS). The FCA imposes civil
liability on anyone who knowingly presents “a false or
fraudulent claim for payment” to the government. 31 U.S.C.
§ 3729(a)(1)(A). The AKS makes it unlawful to knowingly
offer “any remuneration (including any kickback, bribe, or
rebate)” in order to induce referrals for furnishing services that
may be paid by the government. 42 U.S.C. § 1320a-
7b(b)(2)(A). Moreover, a claim for services “resulting from a
violation” of the AKS “constitutes a false or fraudulent claim”
for FCA purposes. Id. § 1320a-7b(g).

-- 30 of 33 --

5
The complaint in this case alleges a striking pattern of
AKS violations. According to the complaint, the records of one
defendant nursing facility indicate a raft of gifts made to local
physicians and discharge personnel at local hospitals. These
records show that between February 2013 and May 2015, this
facility made 45 such gifts, totaling over $23,000 in value. For
each of the gifts, the records indicate the date, gift, cost, and
recipient. The gifts cluster around six named physicians as
well as discharge personnel at four named hospitals.
Sometimes, the physician or the hospital is identified by name;
sometimes, the gift is identified as being “for doctors and
discharge planners” or “for case managers.” J.A. 33–35.
Twenty-two of the gifts are identified as “marketing” meals,
items or gifts. Id. Most of the gifts involve food or liquor,
though one involves $200 “for ballet school for daughter” of a
named physician. Id. at 33. Not surprisingly, the complaint
alleges that these gifts were intended to induce referrals, that
they did induce referrals, and that the facility submitted claims
to Medicare “for services rendered to illegally referred
patients.” Id. at 5. In my view, this account easily suffices to
allege FCA violations with the particularity required by Federal
Rule of Civil Procedure 9(b), and the plausibility required by
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and
Ashcroft v. Iqbal, 556 U.S. 662 (2009).
The SNF defendants mostly ignore these allegations,
though Winnon led with them in her opening brief. The
defendants briefly assert that these gifts showed “nothing more
than Defendant Facilities’ efforts to market themselves, which
is not unlawful.” SNF Defendants’ Br. 30–31. Far from
exonerating, that characterization is a virtual admission of AKS
violations. By its terms, the AKS prohibits providers to make
any cash or in-kind “remuneration” in order “to induce” a third
party to refer Medicare beneficiaries. 42 U.S.C. § 1320a-
7b(b)(2)(A). Almost by definition, gifts in connection with the

-- 31 of 33 --

6
“marketing” of a skilled nursing facility involve that facility
seeking the referral of more patients. Moreover, the carveout
for payments pursuant to bona fide employment obviously
does not apply to marketing gifts of food, liquor, and ballet
school. And the AKS civil-liability provision confirms that
prohibited “remuneration” includes giving away items “for
free or less than fair market value” if done “as part of any
advertisement or solicitation.” Id. § 1320a-7a(i)(6)(H)(i).
My colleagues conclude that Winnon has not adequately
alleged that the improper gifts caused additional referrals or, in
turn, the submission of false claims. However, we have
previously held that identifying specific tainted referrals is not
“an indispensable requirement of a viable False Claims Act
complaint” so long as the relator alleges facts supporting “a
strong inference that [false] claims were actually submitted.”
United States ex rel. Heath v. AT&T, Inc., 791 F.3d 112, 126
(D.C. Cir. 2015) (citation omitted). This case illustrates the
wisdom of that rule. My colleagues begin by asking a very
good question—“what else were these gifts for, if not
referrals?”—but they then dismiss it as mere “rhetorical
flourish[].” Ante at 24. In my view, the SNF defendants have
all but admitted that their “marketing” gifts were intended to
induce patient referrals. And the possibility that the gifts had
their intended effect—causing some additional referrals—
seems to me a very strong inference from the number,
frequency, duration, value, nature, and recipients of the gifts
themselves. Moreover, it seems to me a virtual certainty that
some of the referred individuals would include elderly persons
who are Medicare beneficiaries, thus connecting the tainted
referrals to the submission of false claims. My colleagues are
correct that the complaint would have been stronger had
Winnon been able to allege things like an express quid pro quo
or the existence of records tracking specific referrals due to
gifts. Id. But the plaintiff need not have a proverbial smoking

-- 32 of 33 --

7
gun in order to survive a motion to dismiss, even in cases
governed by Rule 9(b). To me, the necessary inferences of
causation here appear not “faintly, with squinted eyes,” id., but
rather in plain view.
For these reasons, I would reverse the dismissal of the
claim based on the alleged improper marketing gifts, and I
would otherwise affirm.

-- 33 of 33 --