United States Ex Rel. Zizic v. Q2Administrators, LLC
728 F.3d 228
| 3rd Cir. | 2013Background
- Relator Zizic filed a qui tam FCA suit alleging Medicare fraud by Q2Administrators, LLC and RiverTrust Solutions, Inc. related to DME BIO-1000 reviews.
- District Court dismissed the complaint for lack of subject matter jurisdiction under the FCA public disclosure bar and because Zizic was not an original source.
- Medicare Part B covers DME; DMACs perform initial determinations and a five-step appeal process follows if denied.
- From 2005–2006 Q2A denied BIO-1000 claims with minimal physician review due to staffing, later replaced by RTS with similar practices.
- A trustee in Almy v. Sebelius produced documents and an affidavit describing lack of physician review and the public disclosure of those deficiencies.
- On appeal, the Third Circuit reviews the public disclosure bar de novo for jurisdiction and upholds dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the public disclosure bar deprives jurisdiction | Zizic contends disclosures were not of fraud by Q2A/RTS. | District Court correctly applied public disclosure bar based on Almy disclosures and related materials. | Yes; public disclosures bar applies to claims substantially similar to disclosed fraud. |
| Whether Zizic was an original source | Zizic had direct and independent knowledge from his participation and expertise. | Zizic relied on others’ information (van Halem) and public disclosures; lacks original source. | No; Zizic lacked direct and independent knowledge; not an original source. |
| Whether the district court abused discretion by not allowing amendment | Zizic should have been permitted to amend to fix jurisdictional pleading gaps. | No abuse; amendment not properly sought or drafted; district court acted within discretion. | No abuse; district court did not err in denying leave to amend. |
Key Cases Cited
- United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506 (3d Cir. 2007) (permits factual review of jurisdictional challenges; burden on relator)
- United States ex rel. Paranich v. Sorgnard, 396 F.3d 326 (3d Cir. 2005) (defines public disclosure bar elements and original source concept)
- United States ex rel. Mistick PBT v. Hous. Auth. of the City of Pittsburgh, 186 F.3d 376 (3d Cir. 1999) (public disclosure of transaction requires misrepresented and true facts)
- Schindler Elevator Corp. v. United States ex rel. Kirk, 131 S. Ct. 1885 (2011) (pre-PPACA public disclosure bar clarified by Supreme Court)
- Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280 (2010) (public disclosure bar purposes and scope)