Opinion ID: 1196972
Heading Depth: 2
Heading Rank: 1

Heading: Have Glaser's Allegations Been Publicly Disclosed?

Text: For purposes of § 3730(e)(4), a public disclosure occurs when the critical elements exposing the transaction as fraudulent are placed in the public domain. United States ex rel. Feingold v. AdminaStar Fed., Inc., 324 F.3d 492, 495 (7th Cir.2003). Feingold explained that a public disclosure bring[s] to the attention of the relevant authority that there has been a false claim against the government. Id. The public-disclosure bar is designed to prevent lawsuits by private citizens in such situations because [w]here a public disclosure has occurred, that authority is already in a position to vindicate society's interests, and a qui tam action would serve no purpose. Id. Glaser contends that the district court erroneously concluded that the CMS investigation into Wound Care's billing practices constituted a public disclosure, which is a question of law. She believes that unless the allegations of wrongdoing have been widely disseminated, the government must take some affirmative step to publicize its investigation. Nothing in § 3730(e)(4) requires such a showing. To the contrary, we have held that allegations have been publicly disclosed when they appeared in a warning letter from an agency, United States ex rel. Gross v. AIDS Research Alliance-Chi., 415 F.3d 601, 606 (7th Cir.2005); when they were the subject of a government audit, Gear, 436 F.3d at 728; when they were included in reports prepared by a government agency, Feingold, 324 F.3d at 496; or when information about fraudulent behavior has been provided to a competent public official ... who has managerial responsibility for the very claims being made, Bank of Farmington, 166 F.3d at 861. Here, the allegations against Wound Care were publicly disclosed in an administrative ... audit or investigation, 31 U.S.C. § 3730(e)(4)(A), when CMS sent a letter to Dr. Miller in March 2005 demanding repayment for Wound Care's improper use of Dr. Miller's billing code. CMS also made clear to Wound Care beginning in January 2005 that it was actively investigating its billing practices. Although Glaser correctly notes that mere governmental awareness of wrongdoing does not mean a public disclosure occurred, see Bank of Farmington, 166 F.3d at 860 n. 5, the purpose of a public disclosure is to alert the responsible authority that fraud may be afoot, and that purpose is served where that authority has itself issued [documents] containing information that substantiates an allegation of fraud, Feingold, 324 F.3d at 496. This is not a case where the government was simply aware of Wound Care's billing practices. Rather, the appropriate entity responsible for investigating claims of Medicare abuse had knowledge of possible improprieties with Wound Care's billing practices and was actively investigating those allegations and recovering funds. See Bank of Farmington, 166 F.3d at 861 ([D]isclosure to a public official with direct responsibility for the claim in question of allegations or transactions upon which a qui tam claim is based constitutes public disclosure within the meaning of § 3730(a)(4).). CMS's communications with Wound Care indicate that it had commenced an investigation by March 2005 designed to recover money Wound Care should not have received. When Glaser filed her lawsuit challenging Wound Care's billing practices in April 2005, the critical elements exposing the transaction as fraudulent [had been] placed in the public domain, Feingold, 324 F.3d at 495, and therefore the allegations at the heart of Glaser's lawsuit were publicly disclosed by the time her complaint was filed. [4]