U.S. ex rel. Whipple v. Chattanooga-Hamilton Cnty. Hosp. Auth. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Whipple v. Chattanooga-Hamilton Cnty. Hosp. Auth., No. 13-6645 (6th Cir. Feb. 25, 2015)

The United States Court of Appeals for the Sixth Circuit reversed and remanded the lower court’s grant of summary judgment to a hospital in a False Claims Act suit brought against it, finding that the relator’s claims were not barred under the False Claims Act “public disclosure” rule.

The relator, a former “Revenue Cycle Consultant” and “Interim Director of Care Management” at the hospital, alleged that he had direct knowledge that the hospital was submitting fraudulent claims for reimbursement for, among other things, “inpatient care for patients who should have been billed on an outpatient or observation basis (short-stay claims).” The hospital argued that the relator’s claims were barred by the “public disclosure” bar of the False Claims Act, which precludes False Claims Act claims which have been previously publicly disclosed. Specifically, the hospital contended that the information underlying the relator’s claims was already disclosed to the government and others during an audit and investigation by the government into concerns that the hospital had improperly billed Medicare for inpatient admissions.

The lower court granted the hospital’s motion for summary judgment, but the Sixth Circuit reversed the lower court’s decision because the information garnered in the audit was only disclosed privately, and was not circulated to those not participating in the administrative audit or investigation. Similarly, the results of the internal investigation were submitted to the government but were not released into the public domain. Accordingly, the “public disclosure” bar did not apply.