Introduction

In a precedential decision, the U.S. Court of Appeals for the Third Circuit reversed the dismissal of a health care fraud indictment and squarely held that implicit misrepresentations embedded in prescription-based claims can sustain criminal liability under 18 U.S.C. § 1347. The case arises from an alleged compounding-pharmacy scheme in which defendant Carmine A. Mattia, Jr.—a telecommunications employee and union representative who also marketed compounded medications—allegedly arranged for a physician to sign prescriptions for a beneficiary (Individual-1) absent any examination, medical necessity determination, or doctor–patient relationship. The submitted claims were paid by a pharmacy benefits manager (PBM) for the beneficiary’s employer-sponsored health plan.

The district court dismissed the superseding indictment, reasoning that the government had not identified any actionable misrepresentation or omission in the claims and faulting the indictment’s reliance on terms such as “medically unnecessary.” On appeal, the government argued that the claims inherently carried false implications because they incorporated fraudulent prescriptions. The Third Circuit agreed and reinstated the health care fraud charges, clarifying the standard for pleading fraud under § 1347 and aligning the Circuit with others that recognize implicit misrepresentation theories in criminal health care fraud.

The decision has immediate consequences for how prosecutors draft indictments involving prescription claims and for how marketers, pharmacies, and prescribers assess risk in compounding and similar prescribing contexts.

Summary of the Opinion

The Third Circuit held that:

• Implicit misrepresentations are cognizable under 18 U.S.C. § 1347. The court expressly “join[ed] the Fifth and Eleventh Circuits” in recognizing that a claim may be false because it implicitly represents facts that are untrue (for example, that prescriptions were issued after a bona fide medical assessment and were medically necessary).
• A “common-sense” reading of the superseding indictment sufficiently alleged that the claims to the PBM incorporated prescriptions which themselves implied a legitimate doctor–patient relationship, an examination, and medical necessity—implications the indictment alleged were false.
• The indictment’s use of terms such as “medically unnecessary,” “doctor/patient relationship,” and “valid claims” did not render it insufficient or incapable of apprising the defendant of what he must meet at trial. The court read the charging document holistically and found it cleared Rule 7(c)(1)’s low bar.
• Specifics such as the precise circumstances of the physician’s signature or the identity of the claim submitter were not required at the indictment stage; tracking the statutory language and alleging essential facts sufficed.
• Conspiracy liability does not require the defendant personally to make the misrepresentation or submit the claim; causing the submission or supporting the scheme is enough.

The court reversed the district court’s dismissal and remanded for further proceedings. Although it rejected the indictment-based “vagueness” concerns, it left any freestanding constitutional vagueness challenge to be addressed by the district court in the first instance on remand.

Analysis

1) Precedents Cited and Their Role

• United States v. Yusuf, 536 F.3d 178 (3d Cir. 2008), and United States v. Conley, 37 F.3d 970 (3d Cir. 1994): These establish plenary review of indictment sufficiency, framing the appellate court’s de novo look at whether the indictment alleges the offense’s elements.
• United States v. Bergrin, 650 F.3d 257 (3d Cir. 2011): Confirms that the sufficiency inquiry asks whether the facts alleged, if true, state the elements and could support a guilty verdict.
• Federal Rule of Criminal Procedure 7(c)(1); United States v. Rankin, 870 F.2d 109 (3d Cir. 1989); Russell v. United States, 369 U.S. 749 (1962): Together articulate what an indictment must contain—elements of the offense, fair notice of the charge, and protection against double jeopardy.
• 18 U.S.C. § 1347: The health care fraud statute, prohibiting schemes to defraud health care benefit programs or to obtain their money through false or fraudulent pretenses or representations.
• United States v. Hodge, 211 F.3d 74 (3d Cir. 2000): Instructs courts to apply a “common sense” construction to indictments—central to the Third Circuit’s reading of the allegations here.
• United States v. Ferriero, 866 F.3d 107 (3d Cir. 2017): Confirms that fraud need not involve an express lie; implicit misrepresentations are actionable in criminal fraud generally—paving the way to accept that approach under § 1347.
• United States v. Anderson, 980 F.3d 423 (5th Cir. 2020); United States v. Gonzalez, 834 F.3d 1206 (11th Cir. 2016); United States v. Medina, 485 F.3d 1291 (11th Cir. 2007): Sister-circuit authority expressly recognizing implicit misrepresentation theories in health care fraud. The Third Circuit “joins” them, aligning inter-circuit law.
• United States v. Smith, 573 F.3d 639 (8th Cir. 2009); United States v. Nazir, 211 F. Supp. 2d 1372 (S.D. Fla. 2002): Support the common-sense understanding that a “prescription” is a bona fide medical order issued for a real patient after examination or consultation—core to the Third Circuit’s inference that a prescription carries implied representations about medical necessity and legitimate doctor involvement.
• United States v. Lee, 359 F.3d 194 (3d Cir. 2004): Reinforces reading indictments “as a whole” and in a common-sense manner.
• United States v. Resendiz-Ponce, 549 U.S. 102 (2007): Confirms Rule 7(c)(1)’s modest pleading standard; detailed common-law pleading is not required.
• United States v. Stevenson, 832 F.3d 412 (3d Cir. 2016): Holds that tracking the statutory language typically suffices for an indictment.
• Salinas v. United States, 522 U.S. 52 (1997): Establishes that conspirators who provide support are as guilty as those who perpetrate; a defendant need not personally make the false statement to be culpable in a conspiracy.

2) The Court’s Legal Reasoning

a) Implicit misrepresentations under § 1347. The lynchpin is the court’s express adoption of an implicit misrepresentation theory for criminal health care fraud. The panel reasoned that nothing in § 1347’s text limits “false or fraudulent pretenses, representations, or promises” to statements that are overtly and expressly false. This tracks the Third Circuit’s general fraud jurisprudence (Ferriero) and is consistent with Fifth and Eleventh Circuit authority in the health care space (Anderson, Gonzalez, Medina).

b) Why the indictment here sufficed. Applying a “common-sense” lens (Hodge; Lee), the court read the superseding indictment as alleging that:

• Prescription claims to the PBM necessarily incorporate the prescriptions themselves because the drugs at issue were “compounded prescription medications,” which by definition require a prescription to be dispensed and reimbursed.
• The prescriptions, signed by the physician, carried implicit assertions: there was a doctor–patient relationship, some form of examination or consult occurred, and the medications were medically necessary for this specific patient. This understanding reflects the ordinary meaning of “prescription” (Smith; Nazir).
• The indictment alleged those implied assertions were false: the physician had no doctor–patient relationship with Individual-1, performed no examination, and made no medical necessity determination.

Given those allegations, the court held that the prescriptions contained implicit misrepresentations, and those misrepresentations were baked into the claims submitted to the PBM. It was therefore error to dismiss for lack of an alleged “misrepresentation.”

c) No need for more detail at the pleading stage. The court emphasized Rule 7(c)(1)’s “low bar.” The indictment did not need to catalog exactly who at the pharmacy pressed “submit” or when the doctor signed each form. Nor did it need to include an express statement printed on the claim or prescription saying “medically necessary.” It was enough to allege that Mattia caused the submission of claims that incorporated prescriptions carrying false implications and that he knowingly participated in the scheme (with allegations of inducement payments and efforts to mislead investigators).

d) Conspiracy and causation. Relying on Salinas, the court rejected the argument that Mattia’s absence from the literal submission chain insulated him. One who causes claims to be submitted, or supports a plan in which others will submit them, may be liable for conspiracy and substantive fraud.

e) Vagueness concerns at the indictment stage. While the district court was troubled by the terms “medically unnecessary,” “doctor/patient relationship,” and “valid claims,” the Third Circuit concluded that, read holistically and in context, those phrases did not prevent the indictment from apprising Mattia of the charges. The panel expressly left for the district court, in the first instance, any freestanding constitutional vagueness challenge (as opposed to the indictment’s sufficiency).

3) Impact and Practical Implications

This decision is significant for criminal health care fraud prosecutions in the Third Circuit (Delaware, New Jersey, Pennsylvania, and the Virgin Islands) and beyond.

• Binding recognition of implicit misrepresentation in § 1347 cases. Prosecutors can rely on the inherent implications of a “prescription” and of claim submission to a PBM or insurer—especially where the indictment alleges sham doctor involvement or lack of medical necessity. Express misstatements on claim forms are not required.
• Lower drafting burden for indictments. A “common-sense” narrative that the defendant caused the submission of prescription-based claims, coupled with factual allegations negating bona fide medical processes (no relationship, no examination, kickback-like inducements), will generally clear Rule 7(c).
• Expanded exposure for marketers and intermediaries. Individuals who “cause” the submission of claims (e.g., sales reps, marketers, facilitators) may face substantive and conspiracy liability even if they never filled out a claim or spoke to the PBM.
• Prescriber and pharmacy compliance. The court’s ordinary-language approach to what a “prescription” signifies underscores the criminal risk of:
  • Obtaining signatures without any examination or legitimate doctor–patient relationship.
  • Issuing prescriptions untethered to individualized medical necessity.
  • Using inducements to drive ordering of high-reimbursement compounded products.
• PBM plan terms and “valid claims.” Although the court did not rely on extrinsic plan definitions, its reasoning aligns with how PBMs treat “valid claims”—those supported by legitimate prescriptions. Expect increased focus on how prescriptions were obtained in criminal investigations.
• Potential spillover to civil contexts. While this is a criminal case, the logic resonates with civil false-claims theories premised on implied representations (e.g., implied certification), though the opinion does not rely on that doctrine. Litigants should, however, be careful to distinguish statutory elements and standards of proof across regimes.
• Open questions on “medical necessity.” The court declined to decide any constitutional vagueness challenge at this stage. Future litigation may test how “medical necessity” is defined for criminal liability, how plan language interacts with criminal standards, and what quantum of clinical assessment suffices in telemedicine or expedited prescribing contexts.

Complex Concepts Simplified

• Implicit misrepresentation: You can commit fraud without saying an explicit false sentence. If you present something that, by its nature, communicates a falsehood, that can be a misrepresentation. Here, submitting a prescription implies a legitimate doctor–patient relationship, an examination or consultation, and a medical necessity determination. If those did not occur, the prescription carries a false implication.
• Prescription as a “bona fide order”: In ordinary usage, a prescription is a doctor’s directive for a specific patient after some clinical assessment. That ordinary meaning is enough to support the inference that a prescription implies medical necessity and legitimate physician involvement.
• PBM claim submission: PBMs process drug claims for health plans. To get paid, pharmacies submit claims that are typically premised on valid prescriptions. Thus, a false prescription can infect the claim, making the claim itself false or fraudulent.
• “Causing” a claim to be submitted: You can be liable if your actions set in motion or are part of a scheme in which others submit claims, even if you do not press the submit button. Conspiracy law treats planners and supporters as culpable alongside direct perpetrators.
• Rule 7(c)(1) indictment standard: An indictment need not include every detail. It must give a plain, concise statement of essential facts that notify the defendant of the charge and allow preparation of a defense and protection against double jeopardy.
• “Medically unnecessary”: While this term can vary by context, in fraud cases it generally means the service or item was not reasonably required for the diagnosis or treatment of a specific patient under accepted standards, or was not individualized to the patient’s condition.

Conclusion

United States v. Mattia establishes an important principle in the Third Circuit: health care fraud under 18 U.S.C. § 1347 can rest on implicit misrepresentations embedded in prescription-driven claims. Reading the indictment with common sense, the court held that a prescription inherently represents that a physician has engaged in a legitimate doctor–patient interaction and found individualized medical necessity—representations the government alleged were false here. The opinion also reinforces the modest pleading burden under Rule 7(c), rejects the notion that defendants must personally submit claims to face liability, and invites the district court to address any constitutional vagueness challenge in the first instance.

The decision will influence how prosecutors frame health care fraud indictments and how health care actors—especially in compounding and high-reimbursement spaces—structure compliance to avoid schemes that could be viewed as exploiting sham prescriptions. By aligning with the Fifth and Eleventh Circuits, the Third Circuit’s ruling materially advances a coherent, nationwide understanding that implied falsity in medical claims can ground criminal health care fraud.