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"HospitalIn my recent whistleblower blog entries, I have been discussing the growing
problem of fraud against Medicare, and the obstacles to reporting
Illinois fraud against Medicare, although much of what I said can be applied to cases filed all over the
country. I have been discussing a brand-new Seventh Circuit case,
U.S., ex rel. Goldberg v. Rush University Medical Center, No. 10-3785 (7th Cir. 5/21/12), that reduces the obstacles to some extent.

In my last entry, I discussed a ruling in
United States ex rel. Gear v. Emergency Medical Associates of Illinois, Inc., 436 F.3d 726 (7th Cir. 2006). Gear was a whistleblower who reported fraud
by Emergency Medical Associates of Illinois, Inc. The suit alleged Medicare
fraud by St. Bernard hospital in Chicago, additional Medicare fraud at
Chicago hospital Edgewater, and fraud against Medicare by Grant Hospital
in Chicago, Illinois.

The False Claims Act does not allow relators to bring suit based on reports
that were already publicly disclosed, the idea being that the relator
has not provided additional information that has helped the Government
recover money stolen by fraud. In the Gear case, the Seventh Circuit took
a very restrictive view of the False Claims Act. The Court found that
the relator’s reports of fraud against Medicare were based on reports
from the Government that hospitals were committing widespread fraud against Medicare.

The Seventh Circuit took the issue even further in
Glaser v. Wound Consultants, Inc., 570 F.3d 907, 920 (7th Cir. 2009), where it concluded that “a private
suit is ‘based upon’ a public disclosure when the allegations
are ‘substantially similar,’ even if the private relator adds
details.” Goldberg, No. 10-3785 at 3. Furthermore, in order to qualify
as an original source who could circumvent the public disclosure, “the
relator not only must discover the fraud independently but also must disclose
it to the government before filing suit.” Id. at 3.

In the Goldberg case, which is a False Claims Act case issued in May 2005.
The Goldberg case is an Illinois lawsuit about Chicago fraud against Medicare.
The opinion was issued by the Seventh Circuit, which covers False Claims
Act cases filed by lawyers representing whistleblowers in Illinois, whistleblowers
in Indiana, and whistleblowers in Wisconsin.

In the Goldberg case, the relator alleged that Rush University was defrauding
Medicare by billing for surgeries as if physicians were performing the
surgeries. In fact, however, the surgeons were not present – residents
were performing the surgeries. Medicare was being billed for the surgeon’s
time, when the surgeon was not present. Even worse, Medicare was being
double billed, because it also already was paying for the residents’
time via a grant paid directly to the hospital.

In the Goldberg case, the federal Appeals court covering Illinois was asked
to address the “public disclosure” issue, which means the
question of whether the Government already knew about the fraud. The Illinois
federal appeals court also was asked to look at the question of whether
the relator was an “original source.” Under the False Claims
Act, an original source may still be able to be a relator, even if information
about the fraud against the Government has been disclosed publicly.