Last week, a Special Master, tasked with making a report and recommendation on summary judgment in the Government’s FCA case against United HealthGroup, Inc. (“United”) in the Central District of California, confirmed that the “avoids” prong of the FCA’s reverse false claims provision has a materiality requirement.  U.S. ex rel. Poehling v. UnitedHealth Group, Inc., No. CV 16-08697-FMO-PVCx (C.D. Cal. Mar. 3, 2025).  That prong imposes liability on a person who knowingly and improperly avoids an obligation to pay the Government.  31 U.S.C. § 3729(a)(1)(G).  Although the “avoids” prong does not explicitly refer to materiality, the Special Master held that it incorporates the elements of common law fraud—including materiality.  The holding is consistent with broader guidance in recent years from the Supreme Court that the FCA should be interpreted consistent with common law principles—which can result in courts imposing constraints on novel theories of liability.

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