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Qui Tam Group Secures Appellate Win for Whistleblower


Ashcraft & Gerel, along with co-counsel Joseph, Greenwald and Laake, secured an opinion from the Sixth Circuit Court of Appeals, overturning a decision by the United States District Court for the Middle District of Tennessee dismissing a whistleblower’s False Claims Act (FCA) case.

Public Disclosure Question: Asked and Answered

On behalf of their client, Ashcraft & Gerel qui tam attorneys appealed the district court’s decision that his claims were jurisdictionally barred by the “public disclosure” bar to the FCA. The public disclosure bar states that an action may not be brought if the information has been previously disclosed and is publically available.  The Sixth Circuit Court of Appeals disagreed, finding there was no public disclosure and reinstated the case, sending it back to Tennessee for further litigation.

Whipple v. Erlanger Medical Center

In the underlying case, it is alleged that the defendant, Erlanger Health System, a Tennessee hospital, violated the FCA by knowingly submitting false claims to federal health benefit programs in four ways:

  • inpatient care for patients that should have been filled on an outpatient or observation basis;
  • observation services improperly added charges for outpatient surgeries;
  • inpatient admissions of patients in order to bill for hemodialysis procedures that would not be reimbursable if performed on an outpatient basis; and
  • performing carotid artery stenting procedures performed without receiving authorization.

The False Claims Act Explained

Section 3730(e)(4) of the FCA requires that a court cannot have jurisdiction over a qui tam action if the action is based on what the act defines as a “public disclosure” with certain exceptions.  In this particular case, the district court incorrectly found that a government audit and investigation of Erlanger by a Medicare contractor constituted a public disclosure under the statute.  In remanding the case, the Sixth Circuit noted that the plain meaning of § 3730(e)(4) “does not bar jurisdiction over qui tam actions based on disclosures of allegations or transactions to the government,” but “only for actions based on qualifying disclosures made to the public.”  The Sixth Circuit further notes that “[i]f a disclosure to the government in an audit or investigation would be sufficient to trigger the bar, the term “public” would be superfluous.”

The oral argument before the Sixth Circuit was successfully argued on September 30, 2014 in front of a three-judge panel in Cincinnati, Ohio. Following this decision, the case will be returned to the United States District Court for the Middle District of Tennessee for further litigation. To read the full opinion, click here. Congratulations to whole qui tam team for this important victory.

Ashcraft & Gerel

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