you there are two types of patients nurses first is a part a patient the party patient comes directly from the hospital is very very sick a stays for ninety days then there is the part b or b or medicaid patients they are the majority of the people in the nursing home population they are there a long term they need being help taken care of basically reimbursed from ninety one days on is that if they can get the nursing home to sign on by giving them discounts for the party patients they'll get the whole business and they can charge market rates or whatever for exactly right your honor said it yes it does matter it was not specific to that pharmaceutical reimbursement institutional pharmacies it was basically just saying hey the discounted pricing offer to providers could potentially serve as if i kicked back violation in the discount was below a fair market value that was what the government was getting out in these public available information in these advisory opinions the next one was from two thousand it said the same thing it was a footnote with two sentences that talked one two thousand and eight it was a paragraph in and twenty six page report that really just dealt with slopping it also provided a list of ten types of providers very very general public information here but the idea of  yes the only one that dealt with pharmaceuticals with us two thousand and four c m s review of current standard practice for long term care pharmacies and this didn't all it said was out of three it cited three paragraphs the district court cited three paragraphs and all it said was that long term care pharmacies are concerned that offering you're seeing facilities rates lower than medicates rate for non medicaid residents could be viewed as an inducement it wasn't an allegation or fraud it was just that they're gone from carry pharmacies are concerned that these claim is that and what the related provided is that very specific information that the defendant for merica was offering kickbacks and he detailed the form of the kickback and this was not public knowledge the kickback w a pharmacy owner and the far in the nursing home operator for many years he didn't go with the care he dealt with on here yes or no he also dealt with a variety of other pharmacies here he was also head of a lot of associations and went to regional national about what was unique sorry or in that the form of the discount rate he knew the prettier rate he knew that the purdy rate was below cost that was not in the public disclosures he also discovered that the fact that these was charged to the nursing home in the caribbean amount and compare that to the actual cost of the drugs to service a nursing home home and every three months they would take the difference and they would charge the nursing home the money that it owed back to for america but they never enforced those two of causes they were just placed in the contract officially hide this scheme so that to get a close observer it would look as though they were complying with the anti kickback statute but then actually weren't and are are mr marks over he discovered that he brought that to the government to discover marks over she received contracts he he negotiated contracts with or primerica had offered him some pretty and he never accepted those he had relationships information from a consultant who represented nursing homes who negotiated contracts with for america and those he had the actual contracts where and this was on the west coast those contracts had the  entire industry it was what we offered was very very specific information it would be akin to the cooper case in the eleventh circuit where there was a widespread disclosure of met measure secondary pa fraud and what the court held was that that was not a allegation or transaction of fraud it was you know it was just it would it would go against the purpose of the false claims act which would be to encourage whistleblowers and you know protect the government parasitic lawsuits this lawsuit was not a parasitic lawsuit the government was not placed on the trail of the fraud are related brought information he studied documents that the government would have never have seen even if they had seen the transactions between for america would not say that that was the case we would say that we uncovered this fraud the government would not have known that this fraud was occurring they would not have been able to start an investigation without our information and that we believe that the in the court referenced mr silver's testimony in his deposition and it erred in doing that and if you're relied on that it was wrong because the case law is absolutely clear that for a public disclosure analysis later independent previously filed the suit in the state court had the same allegations and then he subsequently filed the key town case the court found that it was publicly disclose all the allegations are already out he said you know what no i didn't use those public disclosures i'm going to disclose did i use my independent knowledge to draft this complaint and the court said your independent knowledge is irrelevant what you relied on is a relevant for projects disclosure analysis it's only relevant for an additional source analysis well i'm concerned about the your discovery of fraud and i wonder if you really did discover fraud if i if i were to think that you did not  you because of your silver's experience and he did seem to have a lot of experience he took all the pieces that were out there put them together including the numbers and concluded that there was a fraud this entitled mr silver to recover well the first step and and more fisheries that outlines there's a multiple set process and the first step would be discovering if error finding that there is an allegation or transaction a father that's been publicly disclosed we would argue that that has not happened transaction of fraud was publicly disclosed it's not substantially similar to the complaint the complaint adds vital details and in the a couple of surface and there is a circuit has not defined substantially similar to begin to do good morning you're on the wrist my name is michael mann sign of represent for america corporation this is an unusual but simple case it's a neutral because the relator in this case admitted under oath that he could only rely on the public disclosures in crafting his complaint and that's because he had no prior relationship with former marital home business relationship with them he did not work with them and he had no connection with any of the employees didn't bring something to the table you know i love your brief seem information what he did bring in and i beg to differ with my colleagues description he did not bring the the the costs he did not know what the costs were he admitted in his deposition that he had no idea whether the prices in the contracts that he brought to the table were below cost or not he had no idea whether the i'm all swapping in fact we have the so called his his own colleague mr lennox also on the record saying that the prices in those contracts which he negotiated were fair market value and that he as the as the intermediary between the pharmacy in a nursing home negotiating the pharmacy contract never accepted as part of a offer in exchange for any type of party or medicaid business so the evidence in the record as opposed to what's been alleged in the complaint and at this stage they can't rely on the complain anymore they have to cut if they have to come forward with affirmative evidence showing that the the public record in search of information about farm erica and then he packed it together into a complaint and what we are what we need to do the exercise in terms of the first stage of the prior public disclosure analysis is to determine not whether there's fraud in the abstract it's not an abstract increase whether the allegations publicly disclosed are similar to or substantially so much of the allegations in the complaint here because he had no information about for america car it's it's granular cost by which he could use me its costs at the nursing home level payer by payer only could do was rely on the financial state because there was this there was a sense that there was fraud well the case would not have been filed but that i don't think that's true either because first of all let's back up a step that really again i think goes to the original source argument here if you at the at the very beginning we have to look at the at the whether there was a whether the complaint was based upon allegations that transactions publicly disclosed in certain public disclosures we have him on record meeting and that is sufficient enough itself to move to the second phase and i can move to the second phase and discuss whether his industry expertise really what he has is an experience based opinion as this court observed in the shimming case and that is not sufficient to establish direct independent knowledge sufficient to establish yourself about the time case well enough the question is whether it materially adds and and it doesn't because what we have is the additions of significant additions that mr silver alleges are his allegations as to what mr le testify to well we had mr lennox testimony and it directly contradicts the allegations in the complaint so that did not materially add to anything that was in the public disclosures you have the contracts themselves mr silver himself testified that he couldn't tell whether those were swapping contrasts because he didn't have sufficient information he didn't know whether they were below cost and we have mr lennox saying that the pricing of those contracts were fair market value so those contracts don't add anything so what you're left with is this notion of the t where the nursing home is financially at risk in exchange for the referral of other business that can be billed at a higher price can you really pass off the true up clause a slew of so quickly i mean it seems to be according to allegations this is a major part of the scheme of these true up clauses well those are the allegations but i think if you look at the contract really it just turns out to be a timing mechanism and the question is is the price below fair market value of fun or does it become bill of fare market value down the road it's the same kickback and it's the same mechanism for pain the kickback which is charging a a fee that is allegedly below farm fair market value so the timing of the payment of the kick back is not a separate fraud it really doesn't bring anything material to the public disclosure and honestly the notion that mr silver brought swop or per diem pricing to the attention of the government is really laughable he's allegations in the complaint itself or that pretty imprisoning was widespread throughout the from stating what the price is in the contract so it again mr silver's testimony is important in this case because on the one hand typically related or arguing that they didn't rely on the public disclosures in crafting their complaint in this court every circuit other than the four circuit has held that such direct reliance is not necessary to trigger the bar but it is sufficient and it has to be because otherwise you run only really is not a little bit of an overstatement that that we've quoted this passage in the british are honored he said i could only rely on what was in the public disclosures and that is true because if you look at the other testimony in even the allegations in the complaint he has no direct personal knowledge of anything about for america he doesn't he never did business with farm merica he was never employed by farm merica he never had a contract with for america he admits in his deposition that he had no knowledge of the inner workings of the company he had no knowledge of their costs so what else was there for him for lying on and i think it's obvious what's going on here and it goes back to which if one has observed which is that he has an issue expertise he's not the only one in the world who has industry expertise he gathered all the information out in the public disclosures he took a look at the at the time hayes figured out what for america's costs were to deliver drugs and he put it together into plain if you look at the  itself there's only about thirteen paragraphs that say anything about for america in those thirteen paragraphs are devoted primarily to alleging what mr lenny we testified to in what mr winnick alternately did testify to is that the prices that he negotiated in that are reflected in the contracts to which mr silver refers were fair market value and it's of getting back to your question about the bank a your honor if you look at the deposition testimony mr silver testifies that he was able to find certain data points in them in the ten k and those were things like the cost of goods sold the selling s g and a which is selling gentlemen ministr their their operating income their net income the number of beds all the things that she identifies in his deposition testimony actually are in the tank a and you can use this information to make the same exact calculation that mr silver did for his own pharmacy which is the find the average costs per bed per day and it's very simple and you don't have to be pricewaterhouse to do it take i can walk you through it if you want it so it's all right but they wrote about it so it ends up being fifteen dollars and fifty cents a day circuit's that no no i at this substantially similar standards been out there forever because when when the statute said based upon this court and others routinely interpreted that's mean substantially similar to or supported by so vs express scripts this court found that the complaint was based upon the public disclosures because in evidence was an email that the relator had sent forwarding one of the public one of the alleged conspirators had reviewed the contracts and cells have negotiated the contracts themselves had had knowledge of the internal workings of the company the court still found that he wasn't an original source because he relied largely on his experienced belief his experience based belief and that's what we have here you have a real leader who is a self proclaimed expert in the industry whose gather together a lot of information that all has been previously disclosed and he as he testifies in his expert opinion he knew or he's assumed that swapping was going on you don't you know deny that swapping was in fact going on involving farm erica and i think there was another one thing here on the here but your argument is that that was already public and almost a silver did was put together the math what was it come to the conclusion that there was fraud well was what was public was all the be all the in disha necessary to infer that former we do not it for america does not admit that it was  fact we we adamantly deny that and we believe that we would be able to prove that at trial it's very complicated you know issue but we end in specifically prior public disclosure analysis doesn't require a finding of fraud in the abstract what it requires is for the court to compare the allegations in the complaint to the publicly disclosed allegations and again i think it's obvious what's going on here t disclosures which led him to an inference and that's the only thing that the out that the complaint alleges is an inference of fraud and in fact mr silver testified in his deposition we cited to in our breeze that because he didn't know what our what our our costs were at the nursing home level per customer or our profits were at the nursing home level by payer he couldn't say whether any contract involves swapping or not and that was the information he was hoping to get does in discovery so what he actually brought was nothing more than what was already out there in the public discourse is true he was able to package it but that is the that is the transaction of fraud upon which he based his complaint the concept of the transaction of fraud i think is important too because we're not out there looking for you know the bag drop the concealing here's the prices that is a cost the cost of the drugs occur because there is sufficient information in the public record from which the public disclosures from which the defendant could be directly identified and this is not in this you had public disclosure case because if you look at all of the public disclosures and gather several of them specifically identify for america so the reports the reports on the consolidation in the industry this is the whole industry basically three different groups facto public disclosure well i've i think in hard it is because the question is is it is far merited directly identifiable from public disclosures in this case they certainly are in one of the factors to be considered whether they are directly identifiable is the content the the consolidation in the industry the clearly two companies dominate this industry farmer and on the care so when you're talking about on from care pharmacy you're talking about want to one or the other of them ok so i think that fact in combination with all of the other public disclosures upon which mr silver it mitzi relied including the ten the  so called industry why public disclosure i'm certainly not with respect to this relator i mean again going back to sort of the core principle here this is a relator who admits that he relied on public disclosures to put it together his  he's the classic pair of it is a classic pierce if it were later he brought nothing new to the to the government and he admits that because the only thing that he had in addition to the public disclosures at the end of the day were t contract prices because your question this is a note that i made after reviewing the district court's opinion the district court said that the information needed to conclude that for america was engaged in swapping was provided by far marriages own publicly disclosed documents is that accurate i would say that that was a a misstatement or not a misstatement but if you go if you go further down and into the opinion it says that it was sufficient to draw the inference of swapping in that's what's necessary to trigger the public disclosure bar if you go back to zick the transaction of fraud as a true set of facts in the false that effects mission to draw the inference that fraud was occurring i think ultimately what judge sherman determined not w the of the order in this is exactly what the this is exactly what mr silver did is he drew an inference of fraud he had no actual evidence of fraud notwithstanding the references to the contracts because again he testified about the contracts we asked him and he said no he didn't know whether any of those contracts were price a low cost and the only information in the record is that the prices were fair market value because that's what his his contact lennox testified if your cause as as my colleague explain mr lennox job was to know negotiate pharmaceutical pharmacy services agreements between position did he not testify the position that he required no information beyond what was publicly disclosed the financial records to determine there for america was that testimony is grossly mischaracterized and let me medication for medicare and then have the operational cost below it and for america i believe has those documents somewhere now that type of statement would fully defy what i'm looking for and it will need to make a decision whether to whether the medicare costs disclosure and drew an inference of fraud and that's all he did because he had nothing else to go on your honor this let me put this and a little bit of perspective he was deposed for two days and they cited twenty six pages of his testimony only six of which they repeated snippets are out they totally miss characterize it he's a person that was being questioned by a very very smart sophisticated attorney that was trying to get testimony to include in this type of briefing the as we had sept fourth his testimony isn't disclosures and we would argue that first off there was no public disclosure that that contained allegation or transaction or fraud and second of all that the complaint was not substantially similar he added significant facts that what was not in the public disclosure with the contracts the per diem pricing the costs those are all not in the public disclosure public available information those are things that our client mr marc silver had provided he's been in the industry he's been is very significant and what my colleagues talked about this is just the fact that there's a true a cause is an important fact is that there is a true across and it wasn't enforced that is the key piece of information our client knew that that trip because it wasn't forced to the on looker they would look at the contract if the government work it said on the trail of fraud they would get the contracts they would look at the contracts they would see the true cost and they would say there's no fraud going on here because they're chewing up our later testified and  the terms of the second the third circuit hasn't defined substantially similar but this is a case is is it has it it does a substantially similar analysis it just uses in a for america in their brief relied upon the surface