United States Court of Appeals 

For the First Circuit 

No. 15-1991 

UNITED STATES EX REL. 

MYRON WINKELMAN AND STEPHANI MARTINSEN, 

Plaintiffs, Appellants, 

v. 

CVS CAREMARK CORPORATION ET AL., 

Defendants, Appellees. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MASSACHUSETTS 

[Hon. Denise J. Casper, U.S. District Judge] 

Before 

Howard, Chief Judge, 

Selya and Lynch, 

Circuit Judges. 

 Brian Wojtalewicz, with whom Wojtalewicz Law Firm, Ltd., 

Timothy G. Lynch, Swartz & Lynch LLP, Neil P. Thompson, Robert P. 

Christensen, Robert P. Christensen, P.A., James G. Vander Linden, 

and Levander & Vander Linden, P.A., were on brief, for appellants. 

 Ken Paxton, Attorney General of Texas, Jeffrey C. Mateer, 

First Assistant Attorney General, James E. Davis, Deputy Attorney 

General for Civil Litigation, Raymond C. Winter, Chief, Civil 

Medicaid Fraud Division, Cynthia O'Keeffe, Deputy Chief, Civil 

Medicaid Fraud Division, and Richard E. Salisbury, Assistant 

Attorney General, Civil Medicaid Fraud Division, on brief for 

State of Texas, amicus curiae. 

 Grant A. Geyerman, with whom Enu Mainigi, Craig D. Singer, 

Roy S. Awabdeh, and Williams & Connolly LLP were on brief, for 

appellees. 
June 30, 2016 
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SELYA, Circuit Judge. The False Claims Act (FCA), 31 

U.S.C. §§ 3729-3733, authorizes private parties to bring qui tam 

actions on the government's behalf alleging fraud on government 

programs. Although such actions can be powerful weapons for 

rooting out chicanery shrouded in darkness, the FCA forbids private 

suits once the sun has shone on the essential features of the 

alleged misconduct. Thus, courts generally must refuse to 

entertain FCA suits "if substantially the same allegations or 

transactions as alleged in the action . . . were [already] publicly 

disclosed" through certain enumerated sources. Id. 

§ 3730(e)(4)(A). 

Applying this provision, known as the public disclosure 

bar, the court below determined that the complaint in this action 

rested on allegations that were already in the light of day. See 

United States ex rel. Winkelman v. CVS Caremark Corp., 118 F. Supp. 

3d 412, 425 (D. Mass. 2015). Consequently, it dismissed the 

relators' suit. See id. After careful consideration, we affirm. 

I. BACKGROUND

We draw the essential facts from the relators' second 

amended complaint and other documents, described infra, that may 

be considered at the motion-to-dismiss stage. 

The relators, Myron Winkelman and Stephani Martinsen, 

brought this qui tam action under the FCA and (in its current form) 

the analogous statutes of eleven states. In it, they challenged 
- 4 - 

particular billing practices of CVS Caremark Corp. and certain 

affiliated companies (collectively, CVS). The main target of their 

complaint was CVS's conduct with respect to a program that the 

company had instituted in 2008. That program was known as the 

Health Savings Pass (HSP). A consumer could join the HSP program 

by paying a nominal enrollment fee (originally $10 and later 

increased to $15). HSP membership entitled a consumer, among other 

things, to purchase a range of generic prescription drugs from CVS 

at discounted prices (either $9.99 or $11.99 for a 90-day supply). 

The relators assert that the HSP framework was a 

carefully constructed artifice that allowed CVS to fraudulently 

overbill Medicare Part D and Medicaid. Both of these federal 

healthcare programs contain conditions designed to control the 

cost to the government of prescription drugs. One such condition 

is of particular pertinence here: that condition bases payments 

for prescription drugs by Medicaid and Medicare on the lowest of 

several potential metrics, one of which is the usual and customary 

(U&C) price charged by a pharmacy for a given drug. See 42 C.F.R. 

§ 403.806(d)(7) (Medicare Part D); id. § 447.512(b)(2) (Medicaid). 

For Medicare Part D, the federal government has promulgated a 

single definition of the U&C price: "the price that an out-ofnetwork pharmacy . . . charges a customer who does not have any 

form of prescription drug coverage for a covered Part D drug." 

Id. § 423.100. Medicaid is a program that is jointly administered 
- 5 - 

by the federal government and the several states, so each state 

provides its own definition of the U&C price.1

The relators allege that CVS designed the HSP program to 

circumvent the applicable U&C requirements; that the HSP prices 

reflect the actual U&C prices charged by CVS under all the relevant 

federal and state statutes and regulations; and that CVS defrauds 

the government by not reporting the HSP prices as its U&C prices. 

They offer examples of drugs for which the U&C price reported by 

CVS was higher than the price charged to participants in the HSP 

program, allegedly leading to overpayments by Medicaid and 

Medicare Part D. 

But the filing of the relators' action did not mark the 

first occasion that CVS's HSP pricing came under scrutiny. In 

February of 2010, a coalition of labor unions under the banner 

"Change to Win" issued a report comparing the HSP drug prices 

charged by CVS with prices charged by CVS for the same drugs to 

 

 1 California, for example, defines the U&C price as the lower 

of "[t]he lowest price reimbursed . . . by other third-party payers 

in California" (with some exclusions) or "[t]he lowest price 

routinely offered to any segment of the general public." Cal. 

Welf. & Inst. Code § 14105.455(b). Massachusetts employs a 

slightly different definition, defining the U&C price as "the 

lowest price that a pharmacy charges or accepts from any payer for 

the same quantity of a drug on the same date of service, in 

Massachusetts, including but not limited to the shelf price, sale 

price, or advertised price of an over-the-counter drug." 130 Mass. 

Code Regs. 406.402. Other states offer variations on these themes. 

For purposes of this case, the exact parameters of these varying 

definitions are unimportant. 
- 6 - 

federal employees enrolled in the Federal Employee Health Benefits 

Program (FEHBP). The report concluded that in its role as the 

FEHBP's pharmacy benefits manager, CVS overcharged by "hundreds of 

millions of dollars." This conclusion rested primarily on the 

report's finding that the prices charged by CVS to the FEHBP were 

higher than the counterpart HSP prices for 85% of generic drugs 

available in both programs. News outlets pounced upon the Change 

to Win report and reported its findings extensively. 

The allegations attracted attention in Washington as 

well: a Change to Win representative testified before Congress in 

late February of 2010 and advocated revising the FEHBP prescription 

drug program. In November of 2010, a Congressional Research 

Service (CRS) report rehearsed some of Change to Win's allegations. 

Meanwhile — after the issuance of the Change to Win 

report but before the issuance of the CRS report — Connecticut 

altered its statutes to explicitly require CVS to take its HSP 

prices into account in its dealings with the state's Medicaid 

program. CVS responded by threatening to end the HSP program in 

Connecticut. Battling back, the Attorney General of Connecticut 

announced that he had subpoenaed CVS to obtain details related to 

the administration of the HSP program. In a press release, issued 

in June of 2010, the Attorney General vouchsafed that: 

CVS Caremark's actions are at odds with other pharmacies 

that have extended their discount program drug pricing 
- 7 - 

to the state Medicaid program and may be inconsistent 

with CVS Caremark's actions in other states. 

Under the Health Savings Pass program, consumers pay $10 

a year to fill a 90-day prescription of one of 400 

generic drugs for $9.99 and receive other benefits. 

State law requires pharmacies to charge Medicaid the 

lowest drug price they offer consumers, which the state 

says obligates CVS to provide the Health Savings Pass 

discount, potentially saving taxpayers millions of 

dollars. 

CVS disagreed, prompting the General Assembly to approve 

a law in the last session clarifying the requirement. 

CVS responded by threatening to end its Health Savings 

Pass program in Connecticut. 

The press release highlighted the fact that CVS was continuing to 

offer the HSP program to consumers in other states. It declared 

that CVS "has an obligation to charge the state of Connecticut the 

same discounted price for drugs for Connecticut Medicaid 

recipients that CVS Caremark charges to customers enrolled in the 

[HSP] pharmacy discount program." The ensuing subpoena sought 

information about how HSP prices "compared to those billed 

Connecticut's Medicaid program," CVS's costs for those 

medications, the details of HSP enrollment in Connecticut, and 

information about states in which the program operated. 

The Attorney General's activities attracted appreciable 

media attention, and all of the significant information contained 

in the press release was replicated in the ensuing media coverage. 

The media also reported CVS's response, including the company's 
- 8 - 

assertion that Connecticut's Medicaid regulations did not require 

CVS to pass on HSP prices to the state Medicaid program. 

It was not until August of 2011 — over a year after the 

outpouring of publicity regarding CVS's refusal to give 

Connecticut the benefit of its HSP pricing — that the relators 

brought this suit. The relators filed an amended complaint in 

March of 2013, and a second amended complaint in June of 2014. 

These various iterations of the complaint were kept under seal 

while the federal government and the designated states considered 

whether to intervene. See 31 U.S.C. § 3730(b)(2). 

Once the United States and all the states named in the 

second amended complaint had declined to intervene, the district 

court unsealed the action on August 11, 2014. See id. CVS then 

moved to dismiss. See Fed. R. Civ. P. 12(b)(1), (6). Its flagship 

claim was that the publicity surrounding the Change to Win 

initiative and the actions of the Connecticut Attorney General 

triggered the FCA's public disclosure bar. The relators opposed 

the motion. After briefing and argument, the district court found 

the public disclosure bar dispositive and dismissed the action. 

See Winkelman, 118 F. Supp. 3d at 425. This timely appeal 

followed. 

II. ANALYSIS

On appeal, the relators insist that the disclosures 

surrounding the Change to Win report and the Connecticut 
- 9 - 

controversy do not suffice to trigger the public disclosure bar. 

We divide our treatment of their asseverational array into three 

segments. First, we clear some procedural underbrush affecting 

the scope of the relevant record. Second, we determine whether a 

public disclosure occurred and, if so, whether that disclosure 

limned a fraud substantially similar to the one alleged in the 

complaint. Finally — having concluded that the public disclosure 

bar is in place — we analyze whether the relators qualify for an 

exception to that bar as original sources. 

A. The Scope of the Record.

Our standard of review is clear: we engage in a de novo 

canvass, accepting as true the well-pleaded facts and drawing all 

reasonable inferences in the non-movant's favor. See McCloskey v. 

Mueller, 446 F.3d 262, 266 (1st Cir. 2006). What is less clear, 

however, is the scope of the relevant record. We briefly explain 

this quandary and craft a solution. 

The FCA contains qui tam provisions that allow private 

persons, called relators, to bring civil suits on behalf of the 

United States against those alleged to have knowingly submitted 

false claims to the federal government. See 31 U.S.C. 

§ 3730(b)(1). If such a suit succeeds, the relator earns a share 

of the proceeds. See id. § 3730(d). Though this statutory 

paradigm has the salutary purpose of encouraging the disclosure of 

fraudulent schemes, it also creates perverse incentives for 
- 10 - 

opportunists to seek compensation based on fraud already apparent 

from information in the public domain. Although not every 

application of the public disclosure bar involves this sort of 

opportunistic behavior, the bar is an especially apt means of 

"foreclos[ing] qui tam actions in which a relator, instead of 

plowing new ground, attempts to free-ride by merely repastinating 

previously disclosed badges of fraud." United States ex rel. Ondis 

v. City of Woonsocket, 587 F.3d 49, 53 (1st Cir. 2009). 

The contours of the public disclosure bar underwent some 

alterations during the period covered by this action. Prior to 

2010, the pertinent provision stated that "[n]o court shall have 

jurisdiction over an action under this section based upon the 

public disclosure of allegations or transactions" from any one of 

several enumerated sources. 31 U.S.C. § 3730(e)(4)(A) (2009). 

This explicit jurisdiction-stripping language spoke directly to 

the subject matter jurisdiction of the court. See Rockwell Int'l 

Corp. v. United States, 549 U.S. 457, 467-68 (2007). Consequently, 

motions to dismiss premised on the public disclosure bar were 

adjudicated under Rule 12(b)(1). See United States ex rel. Poteet 

v. Bahler Med., Inc., 619 F.3d 104, 109 (1st Cir. 2010); Ondis, 

587 F.3d at 53, 54. 

This approach was made questionable by the Patient 

Protection and Affordable Care Act (PPACA), Pub. L. No. 111-148, 

§ 10104(j)(2), 124 Stat. 119 (2010), which reshaped the contours 
- 11 - 

of the public disclosure bar to provide in pertinent part that 

"[t]he court shall dismiss an action or claim under this section, 

unless opposed by the Government, if substantially the same 

allegations or transactions as alleged in the action or claim were 

publicly disclosed."2 31 U.S.C. § 3730(e)(4)(A). 

Here, the parties dispute whether the reconfigured 

public disclosure bar is jurisdictional. The district court, 

citing decisions from several of our sister circuits, concluded 

that it is not. See Winkelman, 118 F. Supp. 3d at 420 (citing, 

inter alia, United States ex rel. Osheroff v. Humana, Inc., 776 

F.3d 805, 810-11 (11th Cir. 2015); United States ex rel. May v. 

Purdue Pharma L.P., 737 F.3d 908, 916 (4th Cir. 2013), cert. 

denied, 135 S. Ct. 2376 (2015)). The court noted that the Supreme 

Court has cautioned against reading statutes as jurisdictional in 

the absence of a clear legislative statement to that effect, see 

Sebelius v. Auburn Reg'l Med. Ctr., 133 S. Ct. 817, 824 (2013); 

that Congress deliberately removed jurisdiction-stripping language 

from the reconfigured public disclosure bar; and that the amended 

provision permits the government, for the first time, to block a 

dismissal despite earlier public disclosures (a circumstance that 

 

 2 The PPACA amendments likewise altered the list of enumerated 

sources for disclosure. Those alterations make no difference here: 

under both versions of the statute, reports in the "news media," 

as well as disclosures in congressional hearings and federal 

reports, are within the statutory sweep. Compare 31 U.S.C. 

§ 3730(e)(4)(A)(ii), (iii), with id. § 3730(e)(4)(A) (2009). 
- 12 - 

— if the public disclosure bar remained jurisdictional — would 

contravene the cardinal principle that "parties cannot confer 

subject-matter jurisdiction on a district court by 

. . . acquiescence," Trenkler v. United States, 536 F.3d 85, 96 

(1st Cir. 2008)). 

Although we find the district court's analysis 

impressive, we recognize that appellate courts should not rush to 

resolve questions of statutory interpretation when it is not 

necessary to do so. That maxim is especially appropriate where, 

as here, the statutory change straddles the relevant events and, 

thus, presents potential retroactivity concerns. See May, 737 

F.3d at 915-16. At any rate, we need not resolve this 

jurisdictional question. The parties note only two aspects of the 

case that might turn on whether or not the public disclosure bar 

is jurisdictional. 

The first aspect hawked by the relators is a red herring. 

They suggest that if the public disclosure bar is no longer 

jurisdictional, then it must be viewed as an affirmative defense. 

Building on this foundation, they argue that an affirmative defense 

cannot be resolved at the motion-to-dismiss stage. But even 

accepting the premise of the relators' suggestion, their 

conclusion is wrong: an affirmative defense may serve as a basis 

for dismissal under Rule 12(b)(6). See Banco Santander de P.R. v. 
- 13 - 

Lopez-Stubbe (In re Colonial Mortg. Bankers Corp.), 324 F.3d 12, 

16 (1st Cir. 2003). 

Second, CVS contends that a determination as to whether 

the public disclosure bar is jurisdictional may affect the scope 

of the relevant record. This concern affects two declarations 

submitted by the relators as part of their opposition to the motion 

to dismiss, which could be considered in evaluating the existence 

of jurisdiction under Rule 12(b)(1). See Aguilar v. ICE, 510 F.3d 

1, 8 (1st Cir. 2007). However, the relators' decision to attach 

these declarations to their opposition to a motion to dismiss 

leaves them outside the scope of the pleadings — and, thus, outside 

the compass of the record under Rule 12(b)(6). See Rodi v. S. New 

England Sch. of Law, 389 F.3d 5, 12 (1st Cir. 2004). But there is 

no need to let the tail wag the dog: rather than deciding the 

jurisdictional question in order to determine whether these two 

documents are part of the relevant record, we assume (favorably to 

the relators) that these declarations are properly before us. 

Indulging this assumption permits us to bypass the jurisdictional 

question3 — and the assumption is practicable because, in the end, 

 

 3 Even though we do not pass upon the question of whether 

Congress has stripped the public disclosure bar of its 

jurisdictional character, the arguments for that proposition are 

strong. Forewarned is forearmed, and future litigants would be 

well-advised to ensure that facts upon which they rely in 

connection with the adjudication of a motion to dismiss that 

implicates the public disclosure bar come within the scope of the 

record cognizable under Rule 12(b)(6). 
- 14 - 

the declarations make no difference to the result that we must 

reach. 

We add a coda. The press release, news articles, CRS 

report, and record of congressional testimony are properly before 

us regardless of whether the public disclosure bar is 

jurisdictional. After all, even within the Rule 12(b)(6) 

framework, a court may consider matters of public record and facts 

susceptible to judicial notice. See In re Colonial Mortg. Bankers, 

324 F.3d at 15-16. Here, the district court, at CVS's request and 

without objection, took judicial notice of the proffered press 

release, news articles, CRS report, and record of congressional 

testimony. See Winkelman, 118 F. Supp. 3d at 417 n.2, 421 n.6, 

422. This praxis is fully consistent with the approach of our 

sister circuits, which routinely have considered undisputed 

documents provided by the parties in connection with Rule 12(b)(6) 

motions based on the public disclosure bar. See United States ex 

rel. Moore & Co. v. Majestic Blue Fisheries, LLC, 812 F.3d 294, 

301 & n.7 (3d Cir. 2016); Osheroff, 776 F.3d at 811-12, 811 n.4; 

United States ex rel. Kraxberger v. Kan. City Power & Light Co., 

756 F.3d 1075, 1083 (8th Cir. 2014).

B. The Public Disclosure Bar.

As we already have noted, the public disclosure bar 

forecloses a qui tam action "if substantially the same allegations 

or transactions as alleged in the action . . . were publicly 
- 15 - 

disclosed" in a list of enumerated sources. 31 U.S.C. 

§ 3730(e)(4)(A). In applying this provision, we examine whether 

the allegations or transactions identified in the relators' 

complaint have already been publicly disclosed. See Ondis, 587 

F.3d at 53. If so, we then examine whether that disclosure 

occurred through one of the statutorily prescribed methods. See 

id. And if these two queries yield affirmative answers, we proceed 

to examine whether the allegations or transactions on which the 

relators' suit rests are substantially the same as the publicly 

disclosed allegations or transactions.4 See id. 

The relators do not contest that the materials cited by 

CVS appeared in statutorily enumerated sources. They argue, 

however, that there was no public disclosure of the relevant 

allegations or transactions and that the disclosures upon which 

CVS relies did not reveal allegations or transactions that were 

substantially the same as those that anchored their complaint. 

Their fallback position is that, in all events, their action evades 

 

 4 This formulation mirrors the revised language contained in 

the post-PPACA version of the FCA. But this changed formulation 

has no substantive effect in this case. After all, we had 

interpreted the earlier version of the provision (which referred 

to allegations "based upon" earlier public disclosures) to require 

public disclosures that were "substantially similar" to the 

allegations or transactions contained in the complaint. See 

Poteet, 619 F.3d at 114; Ondis, 587 F.3d at 58. The revised 

statutory language — "substantially the same" — merely confirms 

our earlier understanding. 
- 16 - 

the public disclosure bar because they meet the statutory 

definition of "original source." 31 U.S.C. § 3730(e)(4)(B). 

As a general matter, a "public disclosure occurs when 

the essential elements exposing the particular transaction as 

fraudulent find their way into the public domain." Ondis, 587 

F.3d at 54. This type of disclosure can occur in one of two ways: 

either through "a direct allegation of fraud" or through the 

revelation of "both a misrepresented state of facts and a true 

state of facts so that the listener or reader may infer fraud." 

Poteet, 619 F.3d at 110. These sets of facts may originate in 

different sources, as long as they "lead to a plausible inference 

of fraud" when combined. Ondis, 587 F.3d at 54. The ultimate 

inquiry, of course, is whether the government has received fair 

notice, prior to the suit, about the potential existence of the 

fraud. See Dingle v. BioPort Corp., 388 F.3d 209, 214 (6th Cir. 

2004).

In the relators' words, the true state of affairs was 

that "CVS was illegally refusing to charge the Medicaid and 

Medicare programs its true U&C lower prices, in multiple states, 

and was hiding that fact." The misrepresented state of affairs, 

they allege, grew out of CVS's false assertion that it "was giving 

its U&C prices to the Medicaid and Medicare programs." They add 

that, prior to the institution of their suit, no public disclosure 

of either set of facts occurred. 
- 17 - 

This disclaimer rings hollow when the Connecticut 

publicity is factored into the mix.5 The Attorney General's press 

release, parroted in the subsequent news articles, made manifest 

the state's belief that its then-existing regulations mandated 

that CVS provide Medicaid with "the lowest drug price" that CVS 

was offering to consumers, which the state contended was the HSP 

price. This cutting of corners, the Attorney General contended, 

meant that taxpayers missed out on savings potentially amounting 

to "millions of dollars." Nor was CVS's stubborn refusal to treat 

HSP prices as U&C prices in doubt. The press release and resulting 

media coverage dwelt, with conspicuous clarity, upon CVS's 

persistent practice of not giving Medicaid the HSP price. Indeed, 

once the Connecticut legislature amended its Medicaid statutes to 

mandate that CVS provide the HSP prices to the state's Medicaid 

program, CVS threatened to end the HSP program entirely. 

On this record, it requires hardly an inferential step 

to connect the allegedly true and allegedly misrepresented facts. 

The publicly disclosed materials revealed, quite plainly, that CVS 

was not providing its HSP price as its U&C price to Connecticut's 

Medicaid program. That is precisely why the Connecticut 

 

 5 For ease in exposition, we limit our ensuing analysis to the 

publicity surrounding the Connecticut dispute. While the Change 

to Win publicity strengthens the case for applying the public 

disclosure bar, the Connecticut publicity alone suffices to prove 

the point. 
- 18 - 

legislature essayed a statutory fix. See Conn. Gen. Stat. § 17b226a. So, too, those materials revealed Connecticut's belief that 

the HSP prices should have been provided to the state's Medicaid 

program even before the statutory change. The allegations and 

transactions that comprised the essential elements of the claimed 

fraud were in plain sight after these disclosures. 

In an effort to resist this conclusion, the relators 

submit that the Connecticut disclosures showed only a price gouging 

scheme, not a scheme to defraud Medicaid and Medicare Part D. This 

quibbling is unavailing: the public disclosure bar contains no 

requirement that a public disclosure use magic words or 

specifically label disclosed conduct as fraudulent. See United 

States ex rel. Advocates for Basic Legal Equal., Inc. (ABLE) v. 

U.S. Bank, 816 F.3d 428, 432 (6th Cir. 2016). "A relator's ability 

to recognize the legal consequences of a publicly disclosed 

fraudulent transaction does not alter the fact that the material 

elements of the violation already have been publicly disclosed." 

United States ex rel. Findley v. FPC-Boron Emps.' Club, 105 F.3d 

675, 688 (D.C. Cir. 1997); accord A-1 Ambul. Serv., Inc. v. 

California, 202 F.3d 1238, 1245 (9th Cir. 2000). Enough was 

revealed in the Connecticut disclosures to put the government on 

notice of the potential fraud without the aid of these relators. 

The relators next asseverate that the earlier 

disclosures do not unmask "substantially the same allegations or 
- 19 - 

transactions" as the scheme identified in their complaint. This 

asseveration, too, lacks force. 

In evaluating substantial similarity, an inquiring court 

should bear in mind the core purpose of the FCA: to encourage suits 

by individuals with valuable knowledge of fraud unknown to the 

government. See Ondis, 587 F.3d at 58. The public disclosure bar 

safeguards this interest because "[w]hen the material elements of 

a fraud are already in the public domain, the government has no 

need for a relator to bring the matter to its attention." Id. It 

follows logically, we think, that a complaint that targets a scheme 

previously revealed through public disclosures is barred even if 

it offers greater detail about the underlying conduct. See Poteet, 

619 F.3d at 115. 

These principles control here. The relators describe 

their complaint as "focus[ing] on the CVS retail pharmacies and 

alleg[ing] that when CVS submitted claims to Medicaid and Medicare 

Part D it illegally and knowingly did not give the HSP discount 

prices to the governments and did not report the HSP prices as the 

U&C [prices]." But this was not new ground: the anatomy of this 

scheme was comprehensively revealed in the Connecticut 

disclosures. Those disclosures openly discussed the HSP program, 

its inexpensive pricing arrangement, CVS's unwillingness to 

provide the HSP prices in its dealings with Connecticut Medicaid, 

and the state's belief that CVS was required to do so. 
- 20 - 

The relators labor to distinguish their complaint from 

the public disclosures by emphasizing its breadth: the Medicare 

Part D program was never mentioned in the Connecticut disclosures, 

nor did those disclosures aver that CVS was allegedly playing fast 

and loose with the Medicaid program in other states. This argument 

elevates form over substance. When it is already clear from the 

public disclosures that a given requirement common to multiple 

programs is being violated and that the same potentially fraudulent 

arrangement operates in other states where the defendant does 

business, memorializing those easily inferable deductions in a 

complaint does not suffice to distinguish the relators' action 

from the public disclosures. 

So it is here. The public disclosures spelled out the 

workings of the alleged scheme in the context of the Connecticut 

Medicaid program. The relators' complaint described the same 

alleged scheme — and the scheme worked in essentially the same way 

under both Medicare Part D and the range of other state Medicaid 

programs. Because the complaint targets the same fraudulent scheme 

that was laid bare in the Connecticut disclosures, the 

identification of additional government programs does nothing more 

than add a level of detail to knowledge that was already in the 

public domain. See United States ex rel. Bogina v. Medline Indus., 

Inc., 809 F.3d 365, 370 (7th Cir. 2016). That is not enough to 

duck the public disclosure bar. 
- 21 - 

The relators' attempt to gain traction from our decision 

in United States ex rel. Estate of Cunningham v. Millenium 

Laboratories of California, Inc., 713 F.3d 662, 672-76 (1st Cir. 

2013), does not get them very far. Cunningham turned on the 

entirely unremarkable proposition that allegations of fraud 

distinct from previous disclosures are not blocked by the public 

disclosure bar. That proposition is inapposite where, as here, 

the fraud alleged is substantially the same as the one previously 

disclosed. 

To say more on this point would be supererogatory. We 

hold that the essential elements of the transactions and events 

underlying the relators' allegations were publicly disclosed in 

the course of the earlier Connecticut dispute and that the scheme 

depicted in those earlier disclosures was substantially the same 

as the scheme depicted in the relators' complaint. Thus, unless 

an exception applies — a question to which we next turn — the 

public disclosure bar pretermits the relators' action. 

C. The Original Source Exception. 

The relators claim that their action nevertheless 

survives under the original source exception to the public 

disclosure bar. See 31 U.S.C. § 3730(e)(4)(A)-(B). Congress 

altered the definition of "original source" as part of the PPACA 
- 22 - 

amendments in 2010.6 For the first time, the statute provides 

alternative original source definitions based on the timing of the 

public disclosure. First, a relator who "prior to a public 

disclosure . . . has voluntarily disclosed to the Government the 

information on which allegations or transactions in a claim are 

based" is considered an original source. Id. § 3730(e)(4)(B)(i). 

The relators do not contend that they meet this definition. 

Instead, they seek refuge in a narrower second category of original 

sources: individuals who, despite not having provided their 

information to the government prior to a public disclosure, 

nonetheless possess "knowledge that is independent of and 

materially adds to the publicly disclosed allegations or 

transactions" and have "voluntarily provided the information to 

the Government before filing an action under this section." Id. 

§ 3730(e)(4)(B)(2). 

It follows that relators who do not come forward until 

after a public disclosure has occurred face additional hurdles to 

original source status. In this instance, the relators' attempt 

to assume the mantle of original source status cannot clear the 

 

 6 The parties have agreed, both before the district court and 

on appeal, that the current version of the original source 

exception applies to this case, and they have pitched their 

arguments accordingly. We therefore do not address the preamendment version of the provision. 
- 23 - 

"materially adds" hurdle (and, thus, we do not address the 

"independent knowledge" hurdle).

The meaning of the "materially adds" language in the 

original source exception is a matter of first impression for this 

court. At its most abecedarian level, an addition is material if 

it is "[o]f such a nature that knowledge of the item would affect 

a person's decision-making," or if it is "significant," or if it 

is "essential." Black's Law Dictionary, 1124 (10th ed. 2014); see 

ABLE, 816 F.3d at 431. This dictionary definition comports with 

the common law understanding of "material," which focuses the 

relevant inquiry on whether a piece of information is sufficiently 

important to influence the behavior of the recipient. See 

Universal Health Servs., Inc. v. United States ex rel. Escobar, 

___ S. Ct. ___, ___ (2016) [No. 15-7, slip op. at 14-15]. As such, 

our task is to ascertain whether the relators' allegedly new 

information is sufficiently significant or essential so as to fall 

into the narrow category of information that materially adds to 

what has already been revealed through public disclosures. As the 

level of detail in public disclosures increases, the universe of 

potentially material additions shrinks. 

The question of whether a relator's information 

"materially adds" to public disclosures often overlaps with the 

questions of whether public disclosure has occurred and, if so, 

whether the relator's allegations are substantially the same as 
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those prior revelations. See Cause of Action v. Chi. Transit 

Auth., 815 F.3d 267, 283 (7th Cir. 2016); Osheroff, 776 F.3d at 

815-16. Despite this potential for overlap, though, the 

"materially adds" inquiry must remain conceptually distinct; 

otherwise, the original source exception would be rendered 

nugatory. See Moore, 812 F.3d at 306; cf. United States ex rel. 

Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13, 25 (1st Cir. 

2009) (explaining, under pre-amendment version of the original 

source exception, that a relator may sometimes provide "different 

information of the publicly disclosed fraud . . . of great 

significance," especially when the public disclosures themselves 

rely on uncertain or unavailable information). 

In the case at hand, the relators muster a host of 

arguments in support of their claim to original source status. 

These arguments draw on both their complaint and the declarations 

submitted as part of their opposition to CVS's motion to dismiss. 

We slice these arguments into four quadrants and engage them 

separately. 

The first slice need not detain us. The relators recycle 

their arguments about the presence of the fraud in other states 

and under Medicare Part D as a basis for claiming that they have 

materially added to the public disclosures. We rejected those 

self-same arguments in determining that the complaint alleges a 

scheme substantially the same as that revealed by the public 
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disclosures, and the relators' arguments are no more persuasive in 

the original source context. The public disclosures revealed that 

CVS operated its HSP program in multiple states and was fiercely 

resistant to the idea that HSP prices had to be provided to 

government healthcare programs. The relators cannot plausibly 

claim to have materially added to that knowledge. 

The relators' second argument focuses on the temporal 

scope of the alleged fraud. They say that they have supplied 

original information indicating that CVS's fraud continued after 

the company's 2010 dispute with Connecticut.7 This claim is 

meritless: the public disclosures left no doubt about CVS's 

insistence that its HSP prices should not be considered when 

calculating U&C prices. Given this publicly disclosed fact, there 

was every reason to think that CVS's scheme would remain velivolent 

elsewhere past the date of the Connecticut cut-off. Under these 

circumstances, simply asserting a longer duration for the same 

allegedly fraudulent practice does not materially add to the 

information already publicly disclosed. See Cause of Action, 815 

F.3d at 281-82. 

 

 7 One relator, Winkelman, suggests that he qualifies as an 

original source because he has provided information about CVS's 

failure to offer U&C prices to the government prior to the 

inception of the HSP program. Even if true, this is beside the 

point: the scheme articulated in the complaints focuses entirely 

on CVS's actions with respect to HSP prices. 
- 26 - 

Third, the relators trumpet their personal knowledge of 

specific instances of alleged overbilling. For example, Winkelman 

says that, while conducting claim audits, he "observed that CVS's 

reported U&C prices were higher than its discount plan HSP prices." 

Similarly, Martinsen says that she has provided specific examples 

of overpaid claims at the retail level and that she personally 

contacted Medicaid and Medicare Part D payors to confirm that they 

were paying more than the HSP prices for drugs included in their 

programs. But the public disclosures made it crystal clear that 

CVS was not providing its HSP prices to Medicaid and, by extension, 

to Medicare Part D. Offering specific examples of that conduct 

does not provide any significant new information where the 

underlying conduct already has been publicly disclosed. 

The relators' last argument involves Martinsen's 

importuning that she has provided critical evidence of CVS's intent 

to defraud the government — evidence gleaned from her experience 

as a pharmacist at a CVS store in Minnesota. This evidence, she 

says, demonstrates that the HSP program was really a cover for an 

open-ended offer of discounts to the general public. To 

substantiate this claim, she asserts that CVS never tried to 

enforce the program requirements; that CVS did not train employees 

in the workings of the program; that it had no system for filing 

HSP enrollment forms; that its computer programming was tailored 
- 27 - 

to facilitate the scheme; and that HSP customers made up the 

largest share of CVS's prescription drug purchasers. 

We do not rule out the possibility that furnishing 

information that a particular defendant is acting "knowingly" (as 

opposed to negligently) sometimes may suffice as a material 

addition to information already publicly disclosed. See 31 U.S.C. 

§ 3729(b)(1). Here, however, the public disclosures made it 

pellucid that CVS was acting deliberately, and that its course of 

conduct was studied (not merely careless). Accordingly, the 

allegations gleaned from Martinsen's experience add nothing 

significant about CVS's knowledge: every indication from the 

public disclosures was that CVS was fully aware that it was 

refusing to provide its HSP prices to the Connecticut Medicaid 

program prior to the legislative change — and, indeed, adopted 

this firm position in spite of known doubts about whether this 

conduct was legal. 

Martinsen's additional information merely confirms this 

state of affairs. At most, her allegations add detail about the 

precise manner in which CVS operated the HSP program, and a relator 

who merely adds detail or color to previously disclosed elements 

of an alleged scheme is not materially adding to the public 

disclosures. See ABLE, 816 F.3d at 432. 

That ends this aspect of the matter. Because the 

relators offer no new information that materially adds to what 
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previously appeared in public disclosures, they do not qualify as 

original sources. 

III. CONCLUSION 

The short of it is that the relators' suit depicts a 

scheme that was publicly disclosed before the filing of their 

complaint. That scheme is substantially the same as the scheme 

delineated in publicly disclosed materials. And because the 

relators have proffered nothing that materially adds to the 

publicly disclosed information, they are not "original sources" as 

that term is used in the jurisprudence of the FCA.8

We need go no further.9 For the reasons elucidated 

above, we find that the sun has set on the relators' claims: the 

public disclosure bar forbids their suit. 

Affirmed. 

 

 8 Even though our analysis has been confined to the FCA, the 

state statutes identified in the relators' complaint, without 

exception, contain provisions similar to the FCA's public 

disclosure bar. The relators do not argue that any of these state 

versions of the public disclosure bar operate differently than the 

FCA's public disclosure bar. Thus, our reasoning requires us to 

affirm the dismissal of the relators' action in toto. 

 9 In an abundance of caution, CVS has identified other grounds 

that, in its view, would support dismissal of the complaint. 

Because we find the public disclosure bar dispositive, we take no 

view of the efficacy of any of these alternative grounds.