Enhanced Pleading and Scienter Standards for FCA Anti-Kickback Claims with OIG Advisory Opinions

Introduction

United States ex rel. D.O. Stephen Sisselman v. Zocdoc, Inc. is a Second Circuit summary order decided on April 14, 2025. Relator Dr. Stephen Sisselman, D.O., filed a qui tam suit under the False Claims Act (FCA) and Anti-Kickback Statute (AKS) against Zocdoc, Inc., alleging that its per-booking “success fee” structure effectively induces referrals of Medicare, Medicaid, and other federal health program beneficiaries in violation of federal law. The U.S. Department of Justice declined to intervene. Zocdoc moved to dismiss the second amended complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and for failure to satisfy the heightened Rule 9(b) fraud-pleading standard. The district court granted the motion with prejudice. On appeal, the Second Circuit affirmed, holding that the complaint (1) lacked sufficient factual matter to state a plausible claim given the reliance on contemporaneous Office of Inspector General (OIG) advisory opinions and (2) failed to demonstrate scienter or identify any misleading statements to the OIG. The court also found that leave to amend would be futile.

Summary of the Judgment

The Second Circuit applied de novo review to the district court’s dismissal under Rule 12(b)(6).
It reaffirmed that FCA claims require heightened Rule 9(b) particularity: specifying the fraudulent statements, speakers, timing, locations, and reasons they were false.
The complaint relied on conclusory labels—calling Zocdoc’s “booking fee” a kickback—without alleging any misrepresentation to or deviation from the two detailed OIG advisory opinions (AO 19-04 and AO 23-04) that analyzed and approved Zocdoc’s fee structure as low-risk under the AKS.
Relator failed to allege facts giving rise to a strong inference of intent to defraud, as required by the FCA and AKS.
The court affirmed denial of leave to amend because Dr. Sisselman had already filed three versions of his complaint and offered no specific additional facts to cure the pleading defects.

Analysis

Precedents Cited

The court’s decision rests on a robust framework of Supreme Court and Second Circuit authority:

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007): Established the “plausibility” standard for Rule 12(b)(6).
Ashcroft v. Iqbal, 556 U.S. 662 (2009): Reinforced the requirement to plead sufficient factual matter and not mere legal conclusions.
Miller v. U.S. ex rel. Miller, 110 F.4th 533 (2d Cir. 2024): Confirmed that FCA fraud allegations must satisfy Rule 9(b)’s particularity requirements.
Hart v. McKesson Corp., 96 F.4th 145 (2d Cir. 2024): Emphasized the need for a strong inference of scienter in FCA and AKS claims.
In re 305 E. 61st St. Grp. LLC, 130 F.4th 272 (2d Cir. 2025): Clarified de novo review standards on motions to dismiss.
Balintulo v. Ford Motor Co., 796 F.3d 160 (2d Cir. 2015): Directed that leave to amend generally be freely granted unless futile.
Krys v. Pigott, 749 F.3d 117 (2d Cir. 2014): Held that futile amendments may be denied when the proposed pleading could not state a valid claim.

These cases collectively shaped the court’s insistence on concrete allegations of wrongful conduct—particularly when the defendant has sought and obtained OIG advisory opinions addressing the same practices.

Legal Reasoning

1. Rule 12(b)(6) and Rule 9(b) Standards: Under Twombly/Iqbal, a complaint must contain enough factual allegations to make relief plausible. Because FCA counts are fraud claims, they must satisfy Rule 9(b): identifying the who, what, when, where, and why of the alleged fraud.

2. OIG Advisory Opinions as Incorporated Documents: The complaint itself described in detail two OIG advisory opinions (AO 19-04 and AO 23-04). Under Second Circuit precedent, such documents incorporated by reference can be considered on a motion to dismiss. Each opinion expressly noted that Zocdoc’s fee varied by factors like specialty and geography but did not tie fees to the volume or value of federal program business, concluding that the risk of kickbacks was low and that the structure did not run afoul of the AKS.

3. Failure to Allege Misleading Conduct or Scienter: Although relator labeled the booking fee a “referral fee” or “kickback,” he did not plausibly allege that Zocdoc misled the OIG or deviated from the fee structures approved in the AOs. He further failed to plead any facts giving rise to a strong inference that Zocdoc intended to defraud federal programs, relying instead on isolated marketing communications without context or detail.

4. Denial of Leave to Amend (Futility): Having already amended three times, Sisselman offered no concrete proposals for additional factual allegations. Under Balintulo and Krys, the district court properly denied further amendment because the relator did not show how new allegations could cure the defects.

Impact

This decision underscores several important developments in FCA jurisprudence:

Advisory opinions from the OIG can serve as powerful defensive tools—if a defendant accurately discloses its practices and follows the OIG’s guidance, a relator’s challenge is unlikely to survive scrutiny under Rule 12(b)(6).
Plaintiffs pursuing qui tam actions under the FCA and AKS must provide detailed allegations of both wrongdoing and intent to defraud, especially when contemporaneous regulatory approvals exist.
District courts may incorporate and rely on advisory opinions in dismissing complaints at the pleadings stage, accelerating resolution of complex regulatory disputes.
Routine denial of leave to amend on futility grounds signals that relators should thoroughly develop factual records before filing or risk dismissal with prejudice.

Complex Concepts Simplified

False Claims Act (FCA): Federal law that imposes liability on anyone who knowingly submits false or fraudulent claims for payment to the government.
Anti-Kickback Statute (AKS): Prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of federal health care program business.
Qui Tam Action: A lawsuit brought by a private individual (relator) on behalf of the government to recover damages for fraud against federal programs.
Rule 12(b)(6) Motion: A request to dismiss a complaint for failure to state a claim upon which relief can be granted.
Rule 9(b) Heightened Pleading: Requires that allegations of fraud be pleaded with specificity—detailing the who, what, when, where, and why.
OIG Advisory Opinions: Non-binding guidance from the Office of Inspector General clarifying how the AKS and other statutes apply to a particular set of facts.
Futility Doctrine: Grounds for denying leave to amend when proposed amendments could not survive a motion to dismiss.

Conclusion

U.S. ex rel. Sisselman v. Zocdoc reinforces that FCA-AKS relators must plead more than labels and conjecture when a defendant has obtained regulatory sign-off. Where OIG advisory opinions outline and approve a disputed arrangement as low-risk, a complaint that merely rebrackets those same practices as “kickbacks” will fail the plausibility and particularity requirements of Twombly/Iqbal and Rule 9(b). Furthermore, relators must proffer specific facts showing scienter and any misleading conduct—simply alleging that a fee is calculated on “estimated annual revenue” rather than on fair market value will not suffice. The decision thus raises the bar for future qui tam complaints involving advisory opinions, encouraging early resolution of complex compliance disputes and signaling that courts will not tolerate fishing expeditions in the face of clear regulatory guidance.