Website Ad Doesn’t Bar Qui Tam Suit for Rewards Program Fraud

Qui tam False Claims Act lawsuits are all well and good as long as the whistleblower knows something that the general public doesn’t. A rule called the “public disclosure bar” bans qui tam lawsuits based on public information. A new case from the US Court of Appeals for the Ninth Circuit tests how far the public disclosure bar goes. It began when a former account manager filed a qui tam suit against an optician for using its rewards program to pay kickbacks to ordering providers. Knowing that Medicare based reimbursement for lenses on the invoice price, the optician offered providers discounts and invoiced them for the full price, in effect shifting the costs of the discounts to the government. The California federal district court ruled that the allegations were “substantially similar” to promotional articles the optician published on its website and tossed the claim under the public disclosure bar. But the account manager had the last laugh (at least for now) when the Ninth Circuit reversed the ruling. The articles merely discussed the optician’s rewards programs and how they make lenses more affordable and didn’t specifically describe how the billing worked. And the court disagreed with the lower court’s finding that “[t]he only available conclusion” from the materials was that the rewards program discounts came at the government and not the optician’s expense. Courts shouldn’t allow generalized description of a program that could give rise to fraud in public documents to prevent the pursuit of legitimate fraud,” it concluded. [Mark v. Shamir United States, 2022 U.S. App. LEXIS 3090, 2022 WL 327475].