U.S. ex rel. Osheroff v. Healthspring, Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Osheroff v. Healthspring, Inc., No. 3:10-1015 (M.D. Tenn. Apr. 5, 2013)

The United States District Court for the Middle District of Tennessee dismissed with prejudice a qui tam relator’s False Claims Act suit against a medical clinic and affiliated managed care organization.

The relator alleged that the medical clinic offered lavish inducements, such as free meals and rides in limousines, to encourage Medicare beneficiaries to patronize the clinic and enroll in Medicare Advantage plans offered by the affiliated managed care organization in violation of the federal Anti-Kickback and Anti-Inducement statutes.  The defendants filed a motion to dismiss, arguing that the court should reject the relator’s False Claims Act suit because the allegations in the relator’s complaint were substantially the same as allegations exposed by the Miami Herald and transactions found on the clinic’s website and thus were subject to the False Claims Act’s “public disclosure bar.”  The court agreed, noting that, to constitute a public disclosure bar to qui tam actions, publicly disclosed allegations “need only be sufficient to place the Government on notice about the possibility of fraud.”  The Miami Herald’s article and information on the clinic’s website did just that.  Moreover, the court ruled that the relator is not an original source of information under the False Claims Act because he does not have knowledge that is “independent of, and materially adds to, the publicly disclosed allegations or transactions.”