The FCA continues to be the federal government's primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we will take a closer look at recent legal developments involving the FCA. This week, we examine the FCA’s public disclosure bar and recent cases considering whether disclosures are sufficient to bar FCA claims.
Courts have continued to clarify the requirements for a relator to be considered an original source, and thus exempted from the public disclosure bar, under the FCA's pre-PPACA and post-PPACA versions. In these cases, courts have typically focused on the requirements that a relator have "direct and independent knowledge of the information on which the allegations are based" (pre-PPACA) and "knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions" (post-PPACA).
The Third and Sixth Circuits made significant rulings regarding the type of knowledge that a relator must possess to have "direct knowledge" to qualify as an original source under the pre-PPACA statute. In U.S. ex rel. Antoon v. Cleveland Clinic Foundation, 788 F.3d 605 (6th Cir. 2015), the Sixth Circuit held that "proof of first-hand knowledge of fraud" is "not a necessary component" to establishing direct knowledge and that "direct knowledge is knowledge gained by relator's own efforts and not acquired from labor of others." This case-by-case determination is controlled by the character of the relator's discovery and investigation. The Sixth Circuit found that the relator did not qualify as an original source because the "heart" of his FCA claim was founded on a review of medical records and he could only "speculate" about whether a physician was personally involved in the surgery that formed the basis of his fraud allegations. "Mere suspicion" that fraudulent activity resulted based on a review of medical records did not entitle the relator to original source status.
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