The Fifth Circuit recently affirmed the dismissal of a False Claims Act suit against Planned Parenthood based on the first-to-file bar. Johnson v. Planned Parenthood, No. 13-20206 (5th Cir. June 4, 2014). Relator Abbey Kristen Johnson, a former Planned Parenthood employee, brought a qui tam suit accusing Planned Parenthood of falsely billing Medicaid and an associated initiative, the Texas Women’s Health Program (TWHP), for various services and procedures. Specifically, Johnson alleged that Planned Parenthood falsely billed the TWHP for non-reimbursable procedures and services performed during a client visit when the primary purpose of the visit was not for contraceptive management as required by the TWHP; falsely billed the TWHP for unperformed laboratory tests and supported the false billings with false notations in client charts; falsely billed non-contraceptive management-related procedures and services by making false notations in client charts and not referring those clients to another physician or clinic for treatment; filed more than 87,000 false claims with the TWHP; and acknowledged to Johnson and other employees that it would conceal from the TWHP that it had received improper reimbursements from it and would retain such reimbursements. Johnson alleged that this conduct resulted in Planned Parenthood taking more than $5.7 million in improper reimbursements.
The FCA’s “first-to-file” bar precludes claims brought by a relator under the FCA if a previously filed suit contains the same ‘material elements’ or ‘essential facts’ as the later-filed suit. Because Planned Parenthood settled a “related action” concerning a Texas clinic in August 2013, the district court found that Johnson’s claim was barred by the “first-to-file” bar. Johnson appealed and argued that her allegations of fraud were different. First, Johnson alleged that she specifically identified the TWHP and that the services were performed but improperly coded, while the earlier suit failed to mention any particular Medicaid program and the conduct involved billing for medical services that were not performed. The Fifth Circuit concluded that “both complaints essentially allege that fraud was committed by altering patient records and billing Medicaid programs for services other than those rendered, and the additional, specific facts added by Johnson are not sufficient to make the alleged fraudulent activity sufficiently distinct to avoid the first-to-file bar.” Johnson also argued that her counsel had participated in the settlement discussions in the earlier case, in which the parties agreed to state that the settlement did not apply to Johnson’s complaint, but that the settlement failed to include such language. However, the Fifth Circuit concluded that “a settlement is irrelevant to the first-to-file analysis” because the first-to-file analysis is conducted by comparing the two original complaints.
In short, the Fifth Circuit’s decision reminds relators that even where a later complaint includes some differences and distinct specific allegations, the court will dismiss a claim alleging fraudulent activity if it finds that an investigation of the fraud in the earlier action will uncover the related fraud.