Affirming the Representative-Claim Requirement: Heightened Pleading Under Rule 9(b) for FCA Qui Tam Actions

Introduction

In U.S. ex rel. v. LHC Group, Inc., 25a0202n.06 (6th Cir. Apr. 14, 2025), the Sixth Circuit addressed the sufficiency of pleading in a False Claims Act (FCA) qui tam action brought by private relators. The relators alleged that LHC Group, a large home health-care provider, manipulated patient data on Medicare Outcome and Assessment Information Set (OASIS) forms to inflate reimbursement rates. The district court dismissed their complaint—citing the FCA’s first-to-file bar—but on appeal the Sixth Circuit affirmed on an alternate ground: the relators failed to plead their allegations with the particularity required by Federal Rule of Civil Procedure 9(b). This decision clarifies and reinforces the “representative claim” requirement in FCA litigation and confirms that even a “relaxed” standard demands specific details connecting alleged fraud to actual claims submitted for payment.

Summary of the Judgment

The relators—VIB Partners and Leann Marshall—filed a qui tam lawsuit against LHC Group in the Eastern District of Tennessee after the government declined to intervene. They alleged that LHC Group systematically altered OASIS patient assessments to exaggerate medical needs and thereby secure higher Medicare payments. LHC Group moved to dismiss, arguing (1) the first-to-file bar precluded relators from proceeding because a similar case was already pending, and (2) the complaint failed to meet the pleading standards of Rules 8 and 9(b). The district court dismissed under the first-to-file bar without reaching the pleading issues. On appeal, the Sixth Circuit bypassed the first-to-file question, holding that under Rule 9(b)’s “who, what, when, where, and how” test the relators did not identify any specific false claim submitted to the government or provide facts giving rise to a strong inference of submission. The court affirmed the dismissal and declined to remand for amendment, finding the relators’ single-sentence footnote request procedurally inadequate.

Analysis

Precedents Cited

Bledsoe I (342 F.3d 634 (6th Cir. 2003)): Established that FCA complaints must plead underlying facts with particularity under Rule 9(b).
Bledsoe II (501 F.3d 493 (6th Cir. 2007)): Clarified that relators must identify the “who, where, and when” of fraudulent conduct and recognized limited flexibility when key evidence is in the defendant’s control.
Chesbrough v. VPA, P.C. (655 F.3d 461 (6th Cir. 2011)): Confirmed that Medicare claims fall within FCA coverage.
Owsley v. Fazzi Associates, Inc. (16 F.4th 192 (6th Cir. 2021)): Held that systemic allegations alone do not satisfy Rule 9(b); relators must identify specific false claims or present facts from personal knowledge to infer claim submission.
Ibanez v. Bristol-Myers Squibb Co. (874 F.3d 905 (6th Cir. 2017)): Emphasized the “representative claim” requirement for FCA cases.
Prather v. Brookdale Senior Living Cmtys., Inc. (838 F.3d 750 (6th Cir. 2016)): Permitted inference of claim submission from personal knowledge of billing practices.
Harper v. Muskingum Watershed Conservancy Dist. (842 F.3d 430 (6th Cir. 2016)): Affirmed that appellate courts may affirm on any ground supported by the record.
PR Diamonds, Inc. v. Chandler (364 F.3d 671 (6th Cir. 2004)): Held that a bare footnote is not a proper Rule 15(a) motion for leave to amend.
Salazar v. Paramount Global, -- F.4th --, 2025 WL 1000139 (6th Cir. Apr. 4, 2025): Reiterated that leave to amend must be properly noticed and substantively supported.

Legal Reasoning

The court undertook a de novo review of the Rule 9(b) challenge. Rule 9(b) demands heightened specificity in alleging fraud, ensuring fair notice and deterring groundless suits. Under Sixth Circuit law, a relator must do one of two things:

Identify one or more specific false claims that the defendant submitted to the government, including when they were submitted and in what amount.
Provide facts based on personal knowledge of the defendant’s billing practices sufficient to give rise to a strong inference that false claims were actually presented.

The relators in this case described a broad, systemic “pressure to inflate” OASIS scores and offered a dozen illustrative examples of allegedly falsified patient assessments. Yet only two examples even mentioned that Medicare was billed, and neither included critical details—dates of assessments, claim submissions, billing amounts, or identities of the responsible agents. Without these linking facts, the relators failed to meet the Rule 9(b) standard as articulated in Fazzi and Ibanez. The court emphasized that alleging “claims requesting illegal payments must have been submitted” is too conclusory; Rule 9(b) mandates a direct nexus between the alleged misrepresentation and a concrete claim for payment.

The relators urged a “relaxed” approach because billing records lay solely in LHC Group’s control. While the Sixth Circuit has acknowledged flexibility when critical evidence is inaccessible to the relator (Bledsoe II), this does not eliminate the need for any detail. Even under a relaxed standard, relators must provide enough factual content to make a plausible allegation. Here, the examples fell short of tying the alleged fraud to Medicare reimbursements.

Finally, the relators’ request for leave to amend consisted of a single sentence in a footnote. Citing PR Diamonds and Salazar, the court held that such a cursory invocation fails to satisfy Rule 15(a), which requires a properly noticed motion setting out the grounds and proposed amendments. Because the relators did not meaningfully move for leave to amend, the court refused to remand.

Impact

This decision has several important implications for FCA litigation, especially in the healthcare context:

Reaffirmation of the “representative claim” requirement will prompt relators to conduct more thorough pre-filing investigations, ensuring they can pinpoint at least one specific false claim or establish personal knowledge of billing practices.
Defendants facing FCA suits may feel bolstered to challenge complaints at the pleading stage, especially where allegations are largely systemic or anecdotal.
Counsel will be encouraged to draft more detailed complaints and, when seeking to amend, will provide clear motions under Rule 15(a) rather than relying on footnotes.
District courts in the Sixth Circuit will have clear authority to dismiss FCA complaints that do not meet Rule 9(b)’s particularity requirements, streamlining cases that lack a direct nexus to claim submission.

Complex Concepts Simplified

Qui Tam Action: A lawsuit filed by a private individual (relator) on behalf of the U.S. government under the False Claims Act, sharing in any recovery.
First-to-File Bar: Under 31 U.S.C. § 3730(b)(5), a later-filed FCA suit is barred if another suit alleging the same fraud was already pending.
Rule 9(b): The Federal Rule of Civil Procedure requiring allegations of fraud to specify the “who, what, when, where, and how” of the wrongdoing.
Representative Claim: A specific example of a false claim already submitted to the government that typifies the defendant’s fraudulent conduct.
OASIS: Outcome and Assessment Information Set, a standardized patient assessment instrument used by home health agencies to document status and service needs for Medicare billing.
Relaxed Pleading Standard: In rare situations where key evidence is exclusively under the defendant’s control, courts have allowed some flexibility in particularity requirements—but not a wholesale departure from Rule 9(b).

Conclusion

U.S. ex rel. v. LHC Group, Inc. stands as a clear reaffirmation that FCA complaints must bridge the gap between alleged misrepresentations and actual false claims submitted for payment. The Sixth Circuit’s insistence on the representative-claim requirement and its refusal to permit a bare-bones amendment request underscore the importance of robust, specific pleading in qui tam actions. Going forward, relators and their counsel must meticulously identify at least one concrete false claim or marshal personal‐knowledge evidence of billing irregularities to advance beyond the pleading stage. This decision not only strengthens defendants’ ability to litigate FCA suits early on but also promotes greater precision and accountability in whistleblower litigation.