Seventh Circuit Says FCA Public Disclosure Bar Applies To Suit
Alleging Improper Medicare Billing Of Residents� Time
A qui tam lawsuit involving Medicare billings for services
performed by medical residents was based on publicly disclosed
information and because the relator was not an "original source," the
action was barred under the False Claims Act (FCA), the Seventh Circuit
The appeals court found the allegations underlying the qui tam action
had been widely known throughout the industry since the 1990s as well as
the subject of the Department of Health and Human Services Office of
Inspector�s (OIG's) Physicians at Teaching Hospitals (PATH) Audits
�Industry-wide public disclosures bar qui tam actions against
any defendant who is directly identifiable from the public
disclosures,� the appeals court concluded. Because the relator, a
medical resident, was not an �original source,� the action
was properly resolved in defendants� favor on summary
Brent Gear, a medical resident, brought a qui tam action under the
FCA against Emergency Medical Associates of Illinois, Inc., and
Illinois/Indiana EM-1 Medical Services, S.C. alleging they had
fraudulently billed Medicare for services performed by residents in
residency program as if those services had been performed by attending
Gear contended the two defendants, which provide physicians to
hospital emergency rooms, double-billed Medicare for the work of
residents as attending physicians but performed during residency hours.
The government did not intervene in the action.
The district court granted summary judgment to defendants, concluding
the FCA public disclosure bar applied and that Gear was not an
The Seventh Circuit affirmed. The appeals court noted allegations
that Medicare was being billed for services provided by residents as if
attending physicians performed them had been widely known since the
Because of concerns about such improper billing, the OIG initiated
the PATH audits to investigate how medical schools, including Midwestern
Medicare for services provided by residents. Reports about the PATH
initiative and its outcomes have been widely published, observed the
�Whether the information Gear provided in his complaint was in
the public domain is not a close question,� the appeals court
found. In so holding, the appeals court rejected Gear�s argument
that public disclosure required the specific defendants at issue to
have been identified in public records.
The appeals court also found that Gear was not an �original
source� under the FCA allowing him to go forward with
the action. To qualify as an original source, Gear would have had to
voluntarily provide information about his claims before filing suit,
something he admitted he never did.
Statesex rel. Gear v. Emergency Med.
Assocs. of Ill., Inc., Nos. 05-2235 &
05-3202 (7th Cir. Feb. 1, 2006).