United States Ex Rel. Saldivar v. Fresenius Medical Care Holdings, Inc.
841 F.3d 927
11th Cir.2016Background
- Relator Chester Saldivar (former Fresenius technician) sued Fresenius under the False Claims Act alleging the company billed Medicare for "overfill" drug quantities in Epogen and Zemplar that were received at no cost. The government declined to intervene.
- The district court found Fresenius’s submissions violated the Medicare Act and constituted false claims, but later granted summary judgment for Fresenius on the FCA intent ("knowingly") element. Saldivar appealed.
- Fresenius argued the suit is barred by the FCA public-disclosure bar; the district court previously held Saldivar was an "original source" and allowed suit to proceed.
- Saldivar’s factual basis: he prepared inventory forms showing overfill used/administered and placed orders for the drugs, but he was not in billing and had no direct knowledge of pricing or actual billing entries. Much of his knowledge about billing came from managers and company reports.
- Public disclosures (OIG reports, an SEC disclosure, a 2008 BNA article, and communications between Fresenius and CMS/OIG) showed Fresenius used and billed for overfill both before and after ASP reimbursement began; CMS officials acknowledged awareness.
- The Eleventh Circuit held the overfill/billing allegations were publicly disclosed and concluded Saldivar was not an "original source" because his knowledge of improper billing was secondhand; therefore the court lacked jurisdiction and reversed the district court’s merits decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FCA public-disclosure bar precludes jurisdiction | Saldivar argued his firsthand inventory/administration knowledge made him an original source despite public disclosures | Fresenius argued use/billing of overfill was publicly disclosed, so suit is barred unless relator is an original source | The court held the allegations were publicly disclosed and thus moved to the original-source inquiry |
| Whether disclosed information is the basis of the suit | Saldivar: suit centers on Fresenius billing for overfill; his evidence adds new, independent facts | Fresenius: public disclosures already revealed billing-for-overfill practice | The court held the public disclosures were the basis of the suit (disclosed information matches relator’s allegations) |
| Whether Saldivar is an "original source" with "direct and independent" knowledge | Saldivar claimed his inventory forms, ordering, conversations, and knowledge of corporate policies gave him direct, independent knowledge | Fresenius contended Saldivar’s knowledge of billing was secondhand (told by managers, public reports) and thus not direct/independent | The court held Saldivar lacked direct/independent knowledge of the critical element (improper billing) and was not an original source |
| Jurisdiction and disposition | Saldivar sought reversal of summary judgment on intent and to proceed on merits | Fresenius sought dismissal for lack of jurisdiction under the public-disclosure bar | The Eleventh Circuit reversed the district court’s merits ruling and remanded with instructions to dismiss for lack of subject-matter jurisdiction |
Key Cases Cited
- Cooper v. Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562 (11th Cir.) (framework for public-disclosure/original-source inquiry)
- U.S. ex rel. Osheroff v. Humana Inc., 776 F.3d 805 (11th Cir.) (background/secondhand information insufficient for original-source status)
- Glaser v. Wound Care Consultants, Inc., 570 F.3d 907 (7th Cir.) (relator needs direct knowledge of billing, not only underlying conduct)
- U.S. ex rel. Mistick PBT v. Housing Auth. of City of Pittsburgh, 186 F.3d 376 (3d Cir.) (must have direct and independent knowledge of the critical elements of alleged fraud)