The False Claims Act is the federal government’s sword against fraud. At the heart of the Act lies the qui tam provision, which deputizes private individuals, known as relators, to expose fraudulent schemes targeting federal programs in exchange for a share of any recovery. U.S.C. § 3730(d). Medicare and Texas Medicaid, which use federal funding to provide medical services for persons with disabilities, the elderly, and low-income individuals—including those admitted to skilled nursing facilities—are frequent targets of such schemes.
In a recent qui tam action, Relator Terri R. Winnon alleged that seventeen defendants flouted the False Claims Act and the Texas Medicaid Fraud Prevention Law by scheming their way to improper reimbursements. In her view, the defendants paid off doctors and hospital discharge planners for patient referrals to skilled nursing facilities and also inflated bills with superfluous therapy services. The district court found these claims either barred by the Act’s public disclosure provision or too thinly pleaded to satisfy Federal Rule of Civil Procedure 9(b).
The United States Court of Appeals for the District of Columbia Circuit stated in its August 12, 2025 decision: “[S]he fails to meet the original source requirement. And though her allegations come close under Rule 9(b), they fall short.”
Public Disclosure Bar
The public disclosure bar is a two-part test: first, whether the allegations or transactions are “substantially similar” to publicly disclosed information. If so, the inquiry shifts to whether the relator qualifies as an “original source.”
The federal appellate court stated: “We conclude that RehabCare sufficiently raised an affirmative defense because Winnon’s RUG upcoding allegations were publicly disclosed in the Halpin action [a prior health care fraud suit] … Because the Halpin complaint alleged that RehabCare’s fraud spanned SNFs “across the United States”— which, in our view, includes Texas—Winnon’s claim that Halpin did not name her facilities is without merit … The Halpin action addressed fraudulent conduct by RehabCare from January 1, 2009, to July 6, 2015. J.A. 275–82. Winnon’s allegations, spanning January 2009 to February 2016, extend that window by a mere seven months. That is not a material distinction because time differences do not erase a disclosure of fraud.”
“Winnon herself acknowledges a government press release announcing the Halpin action settlement. J.A. 50. A press release from the government announcing the fraud is about as public as public can get. Together, these publicly available sources negate any claim that Winnon’s allegations are not substantially similar.”
“Bottom line: The who, what, when, and where of Winnon’s allegations are a retread of Halpin, minor differences
notwithstanding. Because each of these elements were already disclosed in Halpin, Winnon’s allegations neither lead to a new inference of fraud nor a novel assertion of the FCA fraud itself that was not already apparent to the government. That is enough to satisfy the Springfield Terminal test, triggering the public disclosure bar.”
Original Source
“Once public disclosure is established, the burden shifts—by necessity and by law—to the relator to prove she qualifies
as an original source … The statute provides two clear pathways to original source status: either the relator, before public disclosure, “voluntarily disclose[s] to the [g]overnment the information on which allegations or transactions . . . are based,” or the relator “has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and . . . has voluntarily provided th[is] information to the [g]overnment before filing an action.” 31 U.S.C. § 3730(e)(4)(B). The statute is explicit. The requirement is not flexible. And failure to meet either of these conditions is fatal.”
The federal appellate court stated: “she still fails to allege when she disclosed it or to whom. Those are not trivial omissions; they are the very facts that determine whether she clears the statutory bar. She does not. Winnon also fails to allege that her knowledge was independent. She relies on publicly accessible data—such as provider summary reports and monthly facility data—which undermines any assertion of independent knowledge … Even assuming, arguendo, that she gathered the information independently, Winnon’s allegations fail to materially add anything to the information disclosed in the Halpin action.”
“The public disclosure bar prevents relators from repackaging publicly available information. Because Winnon’s allegations do not materially alter what was already disclosed, and she neither alleges with specificity that she
voluntarily provided the relevant information to the government before Halpin nor pleads when or to whom she
disclosed it, she does not qualify as an original source. We therefore affirm the district court’s dismissal of claims against RehabCare.”
Source United States of America v. Lozano, No. 23-7139.
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publicly known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
Visit our website or call us toll-free in the United States at 800-295-3959 to be connected with qui tam lawyers (False Claims Act lawyers) in your U.S. state who may assist you with a False Claims Act lawsuit.
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