On July 16, 2019, the United States District Court for the Central District of California granted in part and denied in part motions to dismiss a declined FCA suit against defendants Providence Health & Services (“Providence”), its affiliates, and J.A. Thomas and Associates, Inc. (“JATA”), a clinical documentation consultant. The suit alleges that Providence perpetrated an upcoding scheme whereby it trained its doctors to describe medical conditions with language that would support increasing the severity levels of the DRGs that Providence reported to Medicare, leading to inflated Medicare reimbursements.

The defendants argued that the suit was barred by the FCA’s public disclosure bar because the relator gathered the information for the suit from the following sources: (1) Medicare claims data that CMS provided to Integra; (2) reports issued by the Department of Health and Human Services Office of Inspector General (“HHS-OIG”) on the use of a particular diagnosis code; and (3) information about JATA’s business practices, available from online sources.

The court determined that the Medicare claims data constituted a “federal report”—one of the express categories of public disclosures specified in the FCA, at 31 U.S.C. § 3730(e)(4)(A)(ii). Applying the definition articulated by the Supreme Court in Schindler Elevator Corp. v. U.S. ex rel. Kirk, 563 U.S. 401 (2011), the court found that the data were a “federal report” because the data “gave information” or represented “an official or formal statement of facts or proceedings.” Further, the claims data were a “public” disclosure because the entity receiving the disclosure—Integra—was an “outsider” with regard to the information’s subject matter. The court agreed that the HHS-OIG reports, too, were “federal reports.”

With respect to the JATA business practice information, the defendants argued that the information represented publicly-disclosed information from the “news media” because the information appeared on the internet. Seeking to define “news media” for purposes of the FCA’s public disclosure bar, the court first determined that the ordinary meaning of the term “news media” suggests that it cannot apply to everything on the internet. The court then consciously departed from the “general consensus in the federal courts” that the “news media” provision “encompasses information from at least some types of online sources that might not traditionally be described as news media.” Navigating through the “not all but at least some” result, the court listed five guideposts for deciding whether information falls within the bounds of the “news media” provision:

  1. “News media” conveys information about recent events or about other information that one commonly finds in a newspaper, news broadcast, or other news sources.
  2. “News media” has a connotation of editorial independence, or at least a separation between the original source of the information and its medium.
  3. “News media” intends to disseminate information widely.
  4. Traditional news outlets, like newspapers and radio and television stations, unquestionably qualify as “news media.”
  5. Most importantly, the source of information must fall within the “broad ordinary meaning” of the term “news media.”

The court concluded that it simply did not have enough information from the parties to decide whether JATA’s business practices qualify as “news media” sufficient to trigger the public disclosure bar. That decision has “to await a later stage of the case.” Unable to confirm that JATA’s business practices qualified as “news media,” and thus that the relator was not an original source, the court denied the defendants’ motion to dismiss based on the public disclosure bar.

The court also granted in part and denied in part the motions to dismiss with regard to defendants’ 12(b)(6) and 9(b) arguments.

A copy of the Central District of California’s order, granting in part and denying in part the defendants’ motions to dismiss, can be found here.