Doctor concerned with health care law

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Health Law Daily, August 27, 2013

Whistleblower’s FCA claims against hospital authority prohibited by public disclosure bar

By Sarah E. Baumann, JD

A whistleblower who formerly provided auditing services to a hospital authority could not bring False Claims Act (FCA) (31 U.S.C. secs. 3729-3733) allegations against the authority because they were prohibited by the public disclosure bar (Whipple v Chattanooga-Hamilton County Hospital Authority, August 26, 2013, Campbell, T). Although the public disclosure bar in effect prior to the implementation of the Patient Protection and Affordable Act (PPACA) (P.L. 111-148) applied to the case, the whistleblower could not be considered an original source of information under either the pre- or post-PPACA rules. As a result, the district court granted the authority’s motion for partial summary judgment.

Background. Robert Whipple provided auditing services to the Chattanooga-Hamilton County Hospital Authority (the Authority) as a consultant for ACS Healthcare Solutions from early 2006 through mid-summer 2006. He advised the government that the Authority was engaging in fraudulent activity and filed suit against the Authority, alleging that it knowingly submitted false claims for reimbursement to Medicare, Medicaid, Tricare/Champus, and other federally-funded health care programs from 2005 to 2006, in violation of the FCA and similar Georgia, North Carolina, and Tennessee statutes. The United States and the states declined to intervene. The Authority filed a motion for summary judgment, alleging that Whipple was prohibited from bringing claims involving short stays, same-day surgeries, and renal dialysis claims because they were publicly disclosed during a previous three-year audit and investigation.

Public disclosure bar. As an initial matter, the court determined that the public disclosure bar in effect at the time that the alleged fraud occurred, pre-PPACA, was controlling as to the alleged misconduct. The pre-PPACA disclosure rule (see False Claims Amendments Act of 1986, P.L. 99-562) stated that courts do not have jurisdiction over cases involving allegations that have been publicly disclosed, unless the case is brought by the Attorney General or an original source of the information. Cases are subject to the bar where a prior disclosure was publicly made and revealed the same type of fraudulent activity as that alleged in the FCA case.

The court noted that the Sixth Circuit had determined that disclosures of fraud made during a congressional, administrative, or Government Accounting Office report, audit, or investigation are considered public. A disclosure serves its purpose of putting the government on sufficient notice of fraud where information is disclosed about both a false set of facts and a true set of facts. A direct allegation also provides sufficient notice. In this instance, an anonymous phone call led the HHS Office of Inspector General (OIG) to conduct a three-year-long audit and investigation into the Authority’s 2005-2006 billing practices relating to short stays, same-day surgeries, and renal dialysis claims. The OIG also involved private auditing and legal firms in the investigation. Because the district court determined that the audit involved both a true set of facts (what should have been billed) and a false set of facts (what was actually billed), it found that prior public disclosure had been made. Furthermore, the allegations in Whipple’s complaint were based on the same public disclosures as those divulged during the audit.

Original source requirement. The court next turned to the original source issue. “Original source” was defined in the pre-PPACA rule as an individual with direct and independent knowledge of the information on which the allegations are based who voluntarily provides that information to the government prior to filing an FCA claim. Whipple did not have direct knowledge of the alleged wrongdoing because it occurred before he was engaged to provide auditing services to the Authority. Instead, he gained knowledge secondhand, through review of spreadsheets and other documents. Even under the post-PPACA public disclosure bar (31 U.S.C. 3730(e)(4)), which defines an original source as either an individual who voluntarily discloses information to the government prior to filing an FCA claim or who has knowledge independent of the disclosures that materially adds to the disclosures and voluntarily provides that information to the government prior to filing an FCA claim, Whipple cannot be considered an original source. He did not provide additional information to the government; instead, he alleges that the government should have drawn a different conclusion from the same information.

Because Whipple was not an original source of information, the court granted the authority’s motion for partial summary judgment as to the 2005-2006 short stay, same-day surgery, and renal dialysis claims.

Attorneys: Christopher C. Sabis, Office of the United States Attorney, for United States of America; Mary Elizabeth McCullohs, Tennessee Attorney General’s Office, for state of Tennessee; Lynn M. Adam (King & Spalding LLP) for The Chattanooga-Hamilton County Hospital Authority.

Companies: The Chattanooga-Hamilton County Hospital Authority

MainStory: TopStory CaseDecisions QuiTamNews FCANews FraudNews BillingNews TennesseeNews

Health Law Daily

Introducing Wolters Kluwer Health Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.

A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.