Relator and plaintiff-appellant George Bellevue filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. § 3729 et seq., and its Illinois analog, the Illinois False Claims Act (IFCA), 740 Ill. Comp. Stat. 175/1 et seq., on behalf of the United States and the State of Illinois against defendant-appellee Universal Health Services of Hartgrove, Incorporated (“Hart-grove”). Bellevue argues that Hartgrove violated the FCA under a number of theories, including false certification and fraudulent inducement. The district court granted Hartgrove’s motion to dismiss the complaint for failure tо state a claim of fraud with particularity as required by Federal Rules of Civil Procedure 12(b)(6) and 9(b).
Hartgrove is a psychiatric hospital that primarily serves children with mental illness. It is enrolled with the Illinois Department of Healthcare and Family Services to receive reimbursement for treating patients through Medicaid. On April 8, 2004, Hartgrove signed a Provider Enrollment Application certifying that it understood “that knowingly falsifying or wilfully withholding information mаy be cause for termination of participation” in the State’s Medical Assistance Program. It further certified that it was in compliance with all applicable federal and state laws and regulations.
On the same date, Hartgrove signed an Agreement for Participation in the Medical Assistance Program, in which it agreed to comply with all federal and state laws and regulations. Hartgrove agreed “to be fully liаble for the truth, accuracy and completeness of all claims submitted ... to the Department [... ] for payment.” It also promised that “all services rendered on or after [the effective date of the agreement] were rendered in compliance with and subject to the terms and conditions” of the agreement. Upon receipt of Medicaid reimbursements, Hartgrove is required to certify that the servicеs provided in the billing information were actually provided.
Hartgrove’s license, issued by the Illinois Department of Public Health, permits it to maintain 150 beds for patients with acute mental illness, but it actually maintains 152 beds. Prior to September 30, 2009, Hartgrove was permitted to maintain 136 beds for acute mental illness patients. Newly admitted adolescent patients suffering from acute mental illness are placed in a room used for daytime group therapy, known as a “dayroom,” rather than patient rooms. These patients sleep on rollout beds until a patient room becomes available. This occurred on 13 separate occasions between January 1, 2011, and June 3, 2011. Hartgrove submitted claims for inpatient care to Medicaid on behalf of these patients even though they were not assigned a room.
Bellevue joined the Hartgrove staff in October 2009, serving as a nursing counselor until October 2014. He contends that Hartgrove knowingly submitted fraudulent claims for reimbursement to Medicaid by admitting new patients with acute mental illness in excess of its 150-bed capacity and permitting these patients to sleep in the dayroom rather than in a private room. He further contends that Hartgrove certified, “either explicitly or implicitly,” that it was in compliance with licеnsing standards contained in. state law, rules, and regulations, even though it was over capacity. See Ill. Admin. Code tit. 77, § 250.230(b). Prior to filing his complaint, Bellevue voluntarily provided the information on which his allegations are based to federal and state government authorities.
Bellevue filed suit on August 5, 2011; the United States and the State of Illinois declined to intervene. Hartgrove moved to dismiss the complaint under Rules 12(b)(1), 12(b)(6), and 9(b), on December 29, 2014. Specifically, Hartgrove argued that Bellevue’s suit was foreclosed by the FCA’s public-disclosure bar, which deprived the district court of jurisdiction.
Bellevue filed an amended complaint on June 26, 2015. Hartgrove moved tо dismiss on July 13, 2015, renewing its arguments from the previous motion. The district court found that Bellevue failed to' state a claim, and the court granted the motion with prejudice on October 5, 2015. Bellevue filed a motion- to reconsider in light of the United States Supreme Court’s decision in Universal Health Services, Inc. v. United States ex rel. Escobar, — U.S. -,
II. DISCUSSION
The FCA permits “both the Attorney General and private qui tam relators to recover from persons who make false or fraudulent claims for payment to the United States.” Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson,
The FCA also seeks to prevent parasitic lawsuits by “opportunistic plaintiffs who have no significant information to contribute of their own....” Graham Cnty.,
On appeal, Hartgrove argues that the district court erred in its finding that the FCA’s public-disclosure bar contained in 31 U.S.C. § 3730(e)(4) did not apply to Bellevue’s claims; a decision that we review de novo. United States ex rel. Heath v. Wis. Bell, Inc.,
Congress amended the public-disclosure bar in March 2010. Because Bellevue’s allegations extend from August 5, 2005, to the present,
Prior to the 2010 amendments, § 3730(e)(4) provided:
(A) No court shall have jurisdiction over an action under this section based upon the public disclosure оf allegations or transactions in a ... congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation ... unless ... the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, “original source” means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.
After the 2010 amendments, § 3730(e)(4) provides:
(A) The court shall dismiss an action or claim under this section, unless opposed by the Government, if substantially the same allegations or transactions as alleged in the action or claim were public- ■ ly disclosed ... in a. congressional, Government Accountability Office, or other Federal report, hearing, audit, or inves- , tigation ... unless ... the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, “original source” means an individual who ... has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the Government before filing an action under this section.4
As an initial matter, we have noted that Congress removed the phrase “[n]o court shall have jurisdiction over an action under this section” and replaced it with. “[t]he court shall dismiss an action or claim under this section” in the 2010 amendment to § 3730(e)(4)(A). Absher,
In addition, we have held that the amendment to § 3730(e)(4)(A) involved “a change to what constitutes a ‘public disclosure,’ ” and thus is a substantive change that is not retroactive. United States ex rel. Bogina v. Medline Indus., Inc.,
In contrast to § 3730(e)(4)(A), our cases have found that the amendment to the “original source” definition in § 3730(e)(4)(B) is a clarification rather than a substantive change, and therefore is retroactive. Bogina,
Hartgrove argues that Bellevue’s claims were publicly disclosed by the IDPH and CMS letters and audit report from March and May 2009. Determining whether to apply the public-disclosure bar requires the court to complete a three-step inquiry. First, we examine whether the relator’s allegations have been “publicly disclosed.” Cause of Action,
Applying the three-step framework, we first address whether Bellevue’s allegations were publicly disclosed. “[T]he allegations in a сomplaint are publicly disclosed when the critical elements exposing the transaction as fraudulent are placed in the public domain.” Id. (citation and quotation marks omitted). “This definition presents two distinct issues: whether the relevant information was placed in the public domain, and, if so, whether it contained the critical elements exposing the transaction as fraudulent.” Id. (citation and quotation marks omitted).
Bellevue does not dispute that the information was in the public domain; he contends that the letters and audit report state merely that Hartgrove was over census without any reference to a knowing misrepresentation of facts, which is a critical element of fraud. The district court found that the government had enough information to infer scienter from the results of its audits. We agree. We have held that the public-disclosure bar applied in instancеs “where one can infer, as a direct
Bellevue relies on Absher, in which we held that the government’s knowledge that the defendant had failed to comply with a patient’s standard of care did not necessarily mean that the defendant had knowingly misrepresented its compliаnce when requesting payments from the government.
Here, as in Cause of Action, the audit report and letters provided a sufficient basis to infer that Hartgrove was рresenting false information to the government. See id. The kind of qualitative judgments at issue in Absher are not present in this case. As the district court noted, because Bellevue did not have personal knowledge of Hartgrove’s billing practices, his allegations necessarily required him to infer that Hartgrove was knowingly over census. There is no reason that the government could not have made the same inference based on its audits. Therefore, we find that Bellevuе’s allegations were publicly disclosed.
Moving to the second step, we address whether Bellevue’s allegations are substantially similar' to the publicly disclosed allegations. There are several factors courts consider in determining whether this standard is met: whether relators present genuinely new and material information beyond what has been publicly disclosed; whether relators allege “a different kind of decеit”; whether relators’ allegations require “independent investigation and analysis to reveal any fraudulent behavior”; whether relators’ allegations involve an entirely different time period than the publicly disclosed allegations; and whether relators “supplied vital facts not in the public domain[.]” Cause of Action,
The district court found that Bellevue’s allegations concerning Hartgrove’s conduct through May 5, 2009 (the issuance date of CMS’s letter), are substantially similar to the publicly disclosed allegations.
We agree with the district court as to Bellevue’s allegations through May 5, 2009. Bellevue’s сomplaint describes the same contested conduct and pertains to the same entity. In addition, the time periods overlap. Furthermore, Bellevue did not supply any genuinely new and material information in his amended complaint. Bellevue argues that his allegation that Hartgrove knomngly exceeded its capacity constitutes new information, but as we stated above, scienter can be inferred from
As to Bellevue’s post-May 5, 2009, allegations, we must disagree with the.district court in light of our recent holding in Cause of Action. We recognize that in Leveski, we found that the relator’s allegations were not substantially similar to those contained in a previous lawsuit because they involved a different time period. See
In Cause of Action, we found that 'although the audit report had considered conduct through 2004, the defendant’s conduct in subsequent years, was part of. its “continuing practice” of misreporting data to the government.
Moving to the third step, we ask whether Bellevue was an original source of the information upon which the allegations in his complaint were based. The district court, applying the pre-2010 definition of original source, found that although Belle-vue did not allege that he had direct knowledge of Hartgrove’s billing practices, it nonetheless could be reasonably inferred that he had acquired direct knowledge through his employment. It also found that Bellevue “materially added” to the publicly disclosed allegations with his personal knowledge of specific instances in which Hartgrove Was over census.
After the district court’s decision, Bogi-na mаde clear that the amended definition of “original source” controls. See 809 F.3d át 369. Therefore, Bellevue must show that he “has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions” and “has voluntarily provided the information to the Government before filing [its] action.” 31 U.S.C. § 3730(e)(4)(B) (2010). It is 'undisputed that Bellevue voluntarily provided information concerning his allegations to the government -befоre filing suit,
In order to possess “independent knowledge,” the relator must “have learned of the allegation or' transactions' independently of the public disclosure.” Cause of Action,
Bellevue recycles the district court’s analysis regarding his material addition to the publicly disclosed allegations. However, this line of reasoning was foreclosed by Cause of Action. In that case, we found that because the plaintiff’s allegations were “substantially similar to” the publicly disclosed allegations, the plaintiff did not “materially add” to the public disсlosure and could not be an original source.
III. CONCLUSION
The allegations in this case fall within the public-disclosure bar to the FCA, and, therefore, the district court рroperly dismissed the amended complaint with prejudice. The judgment of the district court is AFFIRMED.
Notes
. In support of its motion, Hartgrove attached a March 23, 2009, letter from the Illinois Department of Public Health and a May 5, 2009, letter and report from the U.S, Centers for Medicare & Medicaid Services that disseminated findings from two IDPH audits conducted in March 2009. IDPH found that Hartgrove’s patient count exceeded the number it was permitted under its licеnse on both audit dates, and therefore was ‘‘over census.” The CMS report noted that Hartgrove was over census on at least 52 separate occasions between December 3, 2008, and February 28, 2009. These materials were properly before
. The IFCA "closely mirrors the FCA,” and to date we have not found any difference between the statutes that is -material to a jurisdictional or merits analysis. United States ex rel. Absher v. Momence Meadows Nursing Ctr., Inc.,
. Although Bellevue contends that Hartgrove submitted false claims from August 2001 to the present, the district court dismissed Belle-vue’s claims that arose prior to August 5, 2005, due to the FCA's six-year statute of limitations. See 31 U.S.C, § 3731(b)(1). It also dismissed Bellevue's claims in his individual capacity. Bellevue does not challenge either action by the district court, so we need not address these claims further.
. Shortly after the public-disclosure bar of the FCA was amended, the IFCA was amended and ie-codified effective July 27, 2010. The amendments mirror those of the FCA. See 740 Ill. Comp. Stat. 175/4 (2010),
. Hartgrove correctly points out that the 2010 amendments to § 3730(e)(4)(A), added the qualification that an audit report must be “Federal” in order to qualify as a public disclosure, and the IFCA amendment correspondingly limited public disclosures to "State” audit reports, see 740 Ill. Comp. Stat. 175/4 (2010). Therefore, after the 2010 amendments, the May 5, 2009, CMS audit report and letter is relevant to Bellevue’s FCA claims, and the March 23, 2009, IDPH audit and letter is relevant to his IFCA claims.