The Northern District of Illinois dismissed a false claims act (FCA) action filed by a former employee and a faculty member of Rush Medical College (Rush) alleging that Rush and certain of its faculty physicians (Defendants) had submitted false claims to Medicare and Medicaid for inadequately supervised surgical procedures on grounds that the allegations were subject to the public disclosure bar and that the relators were not original sources. Goldberg v. Rush Univ. Medical Sch., No. 04 C 4584 (N.D. Ill. Nov. 2, 2010).

Relators contended that Defendants had violated the FCA by routinely billing Medicare and Medicaid for overlapping surgical procedures performed by residents that were not adequately supervised by a faculty physician, as required by Medicare and Medicaid billing requirements. In response, Defendants filed a motion to dismiss under the FCA’s public disclosure bar claiming that the relators’ allegations were based on the government’s physicians at teaching hospitals (PATH) initiative. The court agreed. The court noted that, although the Defendants were not specifically named as a target of the government’s PATH initiative, the Defendants were directly identified from the PATH audits since Rush was among the teaching hospitals associated with the nation’s 125 medical schools initially targeted by the PATH audits. Since the PATH initiative disclosed inadequate faculty physician supervision on an industry-wide basis, and prompted subsequent government reports and news articles, the PATH initiative constituted “industry-wide” public disclosures under the FCA. Finding that the relators’ allegations mirrored the allegations of fraudulent billing exposed during the PATH initiative and that the relators were not original sources, the court dismissed the relators’ complaint for lack of subject matter jurisdiction. The Northern District of Illinois’s decision is available by clicking here.