Qui Tam Case for Indiana: Carol A. Glaser v. Wound Care Consultants Inc

The issue for the Seventh Circuit Court of Appeals in Carol A. Glaser v. Wound Care Consultants Inc., et al. was jurisdiction:

SYKES, Circuit Judge. Carol Glaser received medical treatment from Wound Care Consultants and was later contacted by an attorney who told her that Wound Care might have improperly billed Medicaid for her treatment. She filed this qui tam action under the False Claims Act (“FCA”), 31 U.S.C. § 3730, seeking recovery as a relator for money the government paid as a result of alleged false or fraudulent Medicare and Medicaid claims submitted by Wound Care. But the government was already aware of the possible improprieties in Wound Care’s billing practices and had commenced an investigation more than four months before Glaser filed her lawsuit. Accordingly, the district court dismissed Glaser’s complaint for lack of subject-matter jurisdiction under 31 U.S.C. § 3730(e)(4), which blocks jurisdiction if the FCA action is “based upon” a “public disclosure” of the alleged fraudulent conduct “unless . . . the person bringing the action is an original source of the information.” Glaser appealed.

The Seventh Circuit had a different standard for determining a public disclosure and has now changed that standard:

The threshold jurisdictional question in this case requires us to determine whether Glaser’s lawsuit is “based upon” a “public disclosure” of Wound Care’s alleged fraudulent billing practices. We take this opportunity to revisit our prior interpretation of the phrase “based upon” in § 3730(e)(4)(A). In United States v. Bank of Farmington, we held that an FCA lawsuit is “based upon” a public disclosure and therefore subject to the jurisdictional bar of § 3730(e)(4) when the lawsuit “depends essentially upon publicly disclosed information and is actually derived from such information.” 166 F.3d 853, 864 (7th Cir. 1999). Although we reaffirmed
the Bank of Farmington holding in United States ex rel. Fowler v. Caremark RX, L.L.C., we acknowledged that it is the minority interpretation. 496 F.3d 730, 738 (7th Cir. 2007). To date, eight other circuits have read the phrase “based upon” in § 3730(e)(4)(A) more broadly, holding that an FCA lawsuit is “based upon” a public disclosure when the relator’s complaint describes allegations or transactions that are substantially similar to those already in the public domain.

Which may put a premium on getting to federal court quickly:

Applying this standard to Glaser’s case, we affirm the district court’s application of the jurisdictional bar. Allegations that Wound Care was improperly billing Medicare
and Medicaid for services performed by physician’s assistants were publicly disclosed in early 2005 when the government notified Wound Care that it was investigating these billing practices. Glaser’s complaint is based on this publicly disclosed information in that her allegations of fraudulent billing are substantially similar to those the government had already lodged against Wound Care in its investigation. Glaser cannot show she is an original source of the allegations in her complaint because she learned about Wound Care’s alleged fraudulent billing from her attorney and then asserted the attorney-client privilege to avoid divulging how her attorney learned of this information. The district court properly dismissed Glaser’s complaint for lack of subject-matter jurisdiction.

If you think you have a whistleblower, government fraud case, call an attorney now.