Many clients here in Mississippi come to me with questions about fraud, asking if they can be whistleblowers. The answer is usually “maybe.” It is not enough to allege fraud against a company simply because you believe they are “up to no good.” Being a whistleblower means that you are inside the company, are aware insider information about fraud, and are willing to expose that information to prevent further fraud against the United States government. But what if you work within a company and become aware of fraud due to the company’s public release of information, such as financial disclosures. This a much closer call and is the subject of a recent case in the 3rd Circuit Court of Appeals, a federal appeals court in Philadelphia. Because this case’s holding provides a detailed look at what does and does not qualify as whistleblowing, I have provided a summary in the blog post below and a link to the full case.
If you are considering becoming a whistleblower here in Mississippi, you will need the help of an experienced whistleblower attorney to help make sure your claims are construed as true whistleblowing by the U.S. Department of Justice. Contact Barrett Law now at (800) 707-9577 to attain the guidance you require.
The Omnicare Case—The Whistleblower’s Allegations
As I have explained before, the False Claims Act prohibits defrauding the government. Fraudulent activity can manifest in many different ways, including providing sub-par products, paying kickbacks to receive government contracts, and inflating billing. In his whistleblower case, Mr Marc Silver alleged that PharMerica Corp. defrauded the federal government by undercutting pricing for some Medicare patients to attain more lucrative government contracts for services to other Medicare patients.
Because nursing homes bear the financial risk for drugs dispensed to their Part A patients, they are always interested in negotiating with pharmacies like PharMerica for the lowest possible drug prices. Once PharMerica secured government contracts for those Medicare Part A patients—resulting in lower prices billed to the nursing homes—it also guaranteed inflated prices for Medicare Part D, which is paid directly to PharMerica. Nursing homes do not care as much about Part D payments because they are collected directly by the pharmacy from Medicaid.
This seems like a classic whistleblower case—a person alleges that a company is bilking the federal government. The exception here was that Mr Silver derived much of his information about PharMerica from the company’s public disclosures. Accordingly, PharMerica sought to have the False Claims Act case dismissed because it was not based on “inside” information and, therefore, could not be whistleblowing.
The Lower Court’s Decision
The U.S. District Court in Camden, New Jersey, agreed with the argument that Mr Silver’s case could not proceed under the False Claims Act and dismissed Mr Silver’s whistleblower lawsuit against PharMerica. The court agreed with the firm that the fraud Mr Silver alleged had already been disclosed by PharMerica in public documents, barring False Claims Act case.
The Appeals Court’s Decision
The good news for whistleblowers is that a federal appeals court overturned the district court ruling, reinstating the whistleblower suit filed against PharMerica, finding that Mr Silver had not relied solely on the publicly available material. The 3rd Circuit Court of Appeals unanimously ruled that the public documents Mr Silver relied upon, “…merely indicate the possibility that such a fraud could be perpetrated in the nursing home industry, which is an allegation that would alone be insufficient to state a claim for fraud under the FCA.” The appeals court went on to explain that Silver made a particular claim setting out specific acts committed by PharMerica and that his specific claim was based on “non-public” information.
Regardless of how Mr Silver’s case against PharMerica turns out, the 3rd Circuit’s decision is illuminating for whistleblowers everywhere. As I have said many times, the Department of Justice receives thousands of these allegations every year and only the most compelling are investigated and prosecuted. Based on the 3rd Circuit’s ruling, whistleblowers should also be prepared to show how their information, if based on a foundation of public disclosures, uses the specific information only knowable by a corporate insider.
What Should You Do if You are Considering a Whistleblower Claim?
Do you know about fraud occurring against the government, particularly in the medical industry? Are you considering filing a whistleblower case based on conduct you have observed or are aware of due to your employment? The financial reward for submitting a successful whistleblower claim can be massive. But you will only receive this sort of award with the help of an experienced False Claims Act attorney. The United States Department of Justice gets thousands of potential claims each year, and only a small minority of those trigger their interest are investigated. Whistleblowers can contact Barrett Law now at (800) 707-9577.
Experienced Mississippi whistleblower lawyer Barrett can provide you with the advice you will need to file a successful qui tam case. Having expert legal advice by your side can mean the difference between receiving your share of a whistleblower reward and losing your career and livelihood.
