Seventh Circuit holds that qui tam suit was not "based upon" OIG-HHS reports on health care fraud

by Ben Vernia | March 14th, 2011

In a February 18 decision, the Court of Appeals for the Seventh Circuit reversed a district court’s dismissal of a qui tam suit on public disclosure grounds. The relator in the case was a chiropractor who alleged that staff at a clinic where she was employed “upcoded” her claims to increase federal reimbursement. The clinic argued that several OIG-HHS reports describing health care fraud (including one describing fraud in chiropractic claims).

Noting that the reports did not mention the defendants – or any other specific provider – Judge Easterbrook wrote that “by placing defendants among the perpetrators of fraud, [the relator] performed the service for which the False Claims Act extends the prospect of reward (if the allegations are correct).” Consider what would happen if the government filed suit against a chiropractor, he reasoned, and simply filed the report: the doctor would prevail summarily, “because these reports do not so much as hint that any particular provider has submitted fraudulent bills.” Likewise, the statute of limitations clearly did not run at the time of the report, because “only information that a particular provider had committed a particular fraud would do that.” (The court was applying the 2007 version of the statute.)

The court nevertheless found that there was insufficient facts in the record to assess whether the whistleblower had voluntarily provided her information to the government before filing her suit, and reversing, it remanded the case.

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