Section 3730(e)(4), until its recent amendment, barred a FCA action by a private person if based on the public disclosure of allegations from three specific enumerated sources including the news media:
(4)(A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a  criminal, civil, or administrative hearing, in a  congressional, administrative, or Government [General] Accounting Office report, hearing, audit, or investigation, or  from the news media unless the action is brought by the Attorney General or 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.
Current Version of 31 U.S.C. § 3730(e)(4)
Defendants named in FCA suits now have fewer opportunities to invoke the public disclosure bar. The current version of Section 3730(e)(4) reads as follows:
(4)(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 publicly disclosed –
(i) in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party;
(ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or
(iii) from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, “original source” means an individual who either (i) prior to a public disclosure under subsection (e)(4)(A), has voluntarily disclosed to the Government the information on which allegations or transactions in a claim are based, or (2) 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.
By striking paragraph (4) and inserting this new language, Congress has effectively weakened or eliminated the grounds for dismissal that defendants invoked regularly with great enthusiasm under the prior version of the statute.
New Restrictions on Public Disclosure Defense
No Longer a Jurisdictional Defense: First, by removing the word “jurisdiction,” the public disclosure bar changed from a mandatory, non-waivable, jurisdictional defense to a substantive defense. Under Fed. R. Civ. P. 12(b)(1), a motion to dismiss based on lack of subject matter jurisdiction is not waived if omitted from a responsive pleading or not asserted in a motion before pleading. See Fed. R. Civ. P. 12(h)(3). A jurisdictional defense provides several important benefits to defendants. A defense based on lack of subject matter jurisdiction can be raised at any time by the defendant or the court, even in post-trial motions or an appeal. This places the whistleblower’s case at the risk of unexpected dismissal well after the investment of substantial time and expense. Moreover, unlike the typical affirmative defense as to which the defendant bears the burden of proof, assertion of a jurisdictional defense places the burden on the plaintiff to establish the court’s jurisdiction. Often it is difficult to know whether a particular false or fraudulent scheme has already been disclosed by someone other than the whistleblower. Even with pre-suit due diligence, it may not be possible to know if prior disclosures have been made.
No Dismissal if Opposed by the Government: Third, the Government now has veto power over dismissal. As amended, courts must dismiss FCA claims brought by whistleblowers “unless opposed by the Government, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed” through specified public proceedings, issuances, or media, unless the relator is the “original source” of the information. 31 U.S.C. § 3730(e)(4) (emphasis added).
The Government elects to intervene in only a fraction of qui tam FCA cases a year. Given the likely existence of thousands of ongoing fraudulent schemes, which siphon billions of dollars from the U.S. Treasury, it is vitally important for the Government to rely on private whistleblowers to pursue FCA lawsuits. This new “veto power” gives the Government a means to prevent dismissal of a meritorious claim.
Broadened Definition of “Original Source”
There remains a two-part test to the “public disclosure” defense. Even if the defendant establishes that substantially the same allegations or transactions alleged in the FCA complaint were previously disclosed, the complaint is not subject to dismissal if the whistleblower is an “original source.”
“Original source” is redefined. Previously, an “original source” must have had “direct and independent knowledge of the information on which the allegations are based,” and voluntarily provided the information to the Government before filing suit based on such information. As amended, an “original source” must either: (i) prior to a public disclosure, have voluntarily disclosed to the Government the information on which allegations or transactions in the claim are based, or (ii) have knowledge that is independent of, and that materially adds to, the publicly disclosed allegations or transactions, and have voluntarily provided the information to the Government before filing an action. Under both versions there is a temporal requirement to the disclosure by requiring the whistleblower to provide the information to the Government before filing an action.
Independent Knowledge that Materially Adds to Publicly Disclosed Information is Sufficient
The second clause of § 3730(d)(4)(B) eliminates the requirement that the whistleblower have “direct and independent knowledge,” by instead referring only to “knowledge” of the information that is “independent of” and that “materially adds to” the previously disclosed information about the allegations or transactions. This should result in a greater number of potential whistleblowers qualifying as an “original source” through their ability to add something material to publicly available information.
First to File
The first to file requirement of § 3730(e)(3) remains unchanged. If a FCA lawsuit has already been filed, another suit on the same grounds cannot be brought by another person regardless of possessing independent knowledge that materially adds to allegations in the first filed suit. The language of § 3730(e)(3) continues to provide as follows: “In no event may a person bring an action under subsection (b) which is based upon allegations or transactions which are the subject of a civil suit or an administrative civil money penalty proceeding in which the Government is already a party.” 31 U.S.C. § 3730(e)(3).
The recent amendments should result in greater access to the courts by FCA whistleblowers, and thus increase the prospects for recovery of compensatory damages and civil penalties from defendants engaged in health care fraud.
 On March 23, 2010, President Obama signed the Patient Protection and Affordability Care Act, Pub. L. 111-148, 124 Stat. 119, which includes several provisions which broaden the reach of the FCA.