Silver v. Omnicare Inc, No. 16-4418 (3d Cir. 2018)Annotate this Case
Silver’s qui tam action, filed under the False Claims Act (FCA), 31 U.S.C. 3729–33, alleged that PharMerica, which owns and operates institutional pharmacies serving nursing homes, unlawfully discounted prices for nursing homes’ Medicare Part A patients (reimbursed by the federal government to the nursing home on a flat per-diem basis) in order to secure contracts to supply services to patients covered by Medicare Part D and Medicaid (reimbursed directly to the pharmacy by the government on a cost basis) in the same nursing homes--a practice called swapping. The district court dismissed, based on the FCA’s public disclosure bar. The Third Circuit reversed. The district court improperly determined that documents publicly describing the generalized risk of swapping in the nursing home industry served to bar his specific claim, which depended on non-public information that PharMerica was actually engaging in swapping in specific contracts. The district court also erred in concluding, on the basis of Silver’s testimony, that he relied upon certain publicly available information to reach his conclusion and that the information itself disclosed the fraud, without independently determining that the relevant public document did, in fact, effectuate such a disclosure.