Eleventh Circuit Clarifies Scope and Effect of the FCA’s Public Disclosure Bar

The Eleventh Circuit has recently issued an opinion clarifying the 2010 amendments to the False Claims Act ("FCA") and its "public disclosure bar," which prohibits suits based on information already publicly disclosed. In United States ex rel. Osheroff v. Humana, Inc., 2015 WL 223705 (11th Cir. Jan. 16, 2015), the court followed the Fourth Circuit in holding that the amendments converted the public disclosure bar from a jurisdictional bar under Fed. R. Civ. P. 12(b)(1) into grounds for dismissal for failure to state a claim under Fed. R. Civ. P. 12(b)(6).1 The Eleventh Circuit also held that the 2010 amendments changed the scope of the public disclosure bar and its "original source" exception.

Background Relator Marc Osheroff filed suit in December 2010 in the United States District Court for the Southern District of Florida, alleging that health clinics and insurers in the Miami area were providing patients with free services such as transportation, meals, salon services, and entertainment, as well as medical services. The relator learned this information through his own research and interviews. The federal government declined to intervene.

The relator alleged violations of the Anti-Kickback Statute ("AKS"), 42 U.S.C. § 1320(a)-7b(b), which prohibits offering remuneration to induce the recipient to purchase goods or services for which payment may be made under a federal health care program; the Civil Monetary Penalties Law ("CMPL"), 42 U.S.C. § 1320a–7a, which prohibits offering remuneration to influence Medicare recipients to use a particular provider; and the FCA, under an "implied certification" theory.

In granting the motion to dismiss, the District Court focused on whether the relator had met the FCA's public disclosure bar, 31 U.S.C. § 3730(e)(4). The court found that the relator's allegations were substantially identical to the information contained in Miami Herald articles and the health clinics' websites, and that the relator was not an original source of any new information that was independent of, and materially added to, these sources. The court dismissed the complaint for lack of jurisdiction and the relator filed a motion for reconsideration, which was denied. The relator appealed.

The Eleventh Circuit's Holding The Eleventh Circuit considered the effect of the 2010 amendments to the FCA's public disclosure bar, enacted as part of the Affordable Care Act. Earlier, the provision explicitly stated that dismissal would be for...