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Seventh Circuit Says FCA Public Disclosure Bar Applies To Suit Alleging Improper Medicare Billing Of Residents' Time


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 held recently.

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 initiative.

�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 judgment.

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 Midwestern University�s residency program as if those services had been performed by attending physicians.

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 �original source.�

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 mid-1990s.

Because of concerns about such improper billing, the OIG initiated the PATH audits to investigate how medical schools, including Midwestern University, billed Medicare for services provided by residents. Reports about the PATH initiative and its outcomes have been widely published, observed the appeals court.

�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.

United Statesex rel. Gear v. Emergency Med. Assocs. of Ill., Inc., Nos. 05-2235 & 05-3202 (7th Cir. Feb. 1, 2006).

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