                                       PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT
                     ______

                      No. 12-2215
                        ______

        UNITED STATES OF AMERICA ex rel.
             THOMAS M. ZIZIC, M.D.,

                       Appellant

                           v.

           Q2ADMINISTRATORS, LLC and
           RIVERTRUST SOLUTIONS, INC.
                    ______

     On Appeal from the United States District Court
        for the Eastern District of Pennsylvania
                (D.C. No. 2-09-cv-05788)
      District Judge: Honorable Norma L. Shapiro
                        ______

              Argued January 8, 2013
Before: RENDELL, FISHER and JORDAN, Circuit Judges.

            (Opinion Filed: August 26, 2013)

Brian J. McCormick, Jr. (ARGUED)
Matthew C. Monroe
Sheller
1528 Walnut Street, 4th Floor
Philadelphia, PA 19102
       Counsel for Appellant

Stephanie C. Chomentowski
Blank Rome
130 North 18th Street
1 Logan Square
Philadelphia, PA 19103

Daniel E. Chudd
James C. Cox
Warren J. DeVecchio (ARGUED)
Marina K. Jenkins
Jenner & Block
1099 New York Avenue, Suite 900
Washington, DC 20001
       Counsel for Q2Administrators, LLC

James A. Backstrom, Jr.
1500 John F. Kennedy Boulevard
2 Penn Center Plaza, Suite 200
Philadelphia, PA 19102

Jaime L. Derensis
Gary C. Shockley (ARGUED)
Baker, Donelson, Bearman, Caldwell & Berkowitz
211 Commerce Street, Suite 800
Nashville, NC 37201
       Counsel for RiverTrust Solutions, Inc.


                                2
                           ______

                OPINION OF THE COURT
                        ______

FISHER, Circuit Judge.

       Relator Thomas M. Zizic, M.D. (“Zizic”) filed this qui
   1
tam suit under the False Claims Act (“FCA”), 31 U.S.C. §§
3729-33, alleging that Q2Administrators, LLC (“Q2A”) and
RiverTrust Solutions, Inc. (“RTS”) fraudulently billed the
United States for the unperformed review of benefit claim
denials that was required by the Medicare Act (“Medicare”),
42 U.S.C. § 1395 et seq., Department of Health and Human
Services (“HHS”) regulations, and their Government
contracts. Q2A and RTS moved to dismiss Zizic’s claims for
lack of subject matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1).      The District Court dismissed the
       1
         The term “qui tam” is an abbreviation of the phrase
“‘qui tam pro domino rege quam pro se ipso in hac parte
sequitur,’ which means ‘who pursues this action on our Lord
the King’s behalf as well as his own.’” United States ex rel.
Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 509 n.1 (3d
Cir. 2007) (quoting Vt. Agency of Natural Res. v. United
States ex rel. Stevens, 529 U.S. 765, 769 n.1 (2000)).
Generally, qui tam actions permit private parties to sue to
enforce the law on the Government’s behalf and reward
successful plaintiffs with part of the recovery. United States
ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645,
647 n.1 (D.C. Cir. 1994).


                              3
complaint with prejudice, concluding that it lacked
jurisdiction because the allegations against Q2A and RTS
were based on certain prior public disclosures and because
Zizic was not an original source of that information. For the
reasons stated below, we will affirm.

                              I.

        Because Zizic’s FCA claims allege Medicare fraud, we
first describe those two statutory schemes. Next, we relate
the relevant factual background of this case. 2 We finally
recount the procedural history of this appeal.

                             A.

       Zizic asserts claims under the FCA, which punishes
the knowing presentation of a fraudulent demand for payment
to the United States, 31 U.S.C. § 3729(a)(1)(A) &
(b)(2)(A)(i), and permits a private relator to bring a qui tam
civil suit in the Government’s name, § 3730(b)(1). To
proceed with the suit, the relator must serve on the
Government a written statement disclosing “substantially all
material evidence and information the person possesses.” §
3730(b)(2). If the Government declines to take over the case,
§ 3730(b)(4)(B), the successful relator is entitled to

      2
         The factual background is only partially drawn from
Zizic’s pleadings. See Atkinson, 473 F.3d at 514 (recognizing
that we may properly consult external evidence in a factual
challenge to subject matter jurisdiction under Federal Rule of
Civil Procedure 12(b)(1)).


                              4
reasonable expenses, attorney’s fees, and between 25% and
30% of the proceeds of the litigation, § 3730(d)(2), which
include civil penalties and treble damages, § 3729(a)(1).
Importantly, the FCA’s public disclosure bar divests a court
of subject matter jurisdiction over a qui tam suit that is based
on allegations or transactions that have been publicly
disclosed in certain sources, unless a relator is an original
source of that information. § 3730(e)(4). 3

       Zizic’s FCA claims are based on allegations of fraud
related to Medicare, a federal health insurance program for
the aged and disabled. Medicare Part B subsidizes the costs
       3
          The Patient Protection and Affordable Care Act
(“PPACA”), Pub. L. No. 111-148, § 10104(j)(2), 124 Stat.
119, 901-02 (2010), amended the FCA’s public disclosure
bar. But because that amendment is not retroactively
applicable to pending cases like Zizic’s, Graham Cnty. Soil &
Water Conservation Dist. v. United States ex rel. Wilson, 559
U.S. 280, 283 n.1 (2010), we will discuss the pre-PPACA
version of the public disclosure bar, see Schindler Elevator
Corp. v. United States ex rel. Kirk, 131 S. Ct. 1885, 1889 n.1
(2011). Both the Supreme Court and this Court have
frequently detailed the pre-PPACA legislative history of the
public disclosure bar, and we will not do so again here. See,
e.g., Kirk, 131 S. Ct. at 1893-94; Wilson, 559 U.S. at 293-
300; United States ex rel. Dunleavy v. Cnty. of Del., 123 F.3d
734, 738-40 (3d Cir. 1997), abrogated on other grounds by
Wilson, 559 U.S. 280; United States ex rel. Stinson, Lyons,
Gerlin & Bustamante, P.A. v. The Prudential Ins. Co., 944
F.2d 1149, 1152-54 (3d Cir. 1991).


                               5
of covered medical services and devices.         42 U.S.C.
§ 1395k(a). Covered medical supplies include certain durable
medical equipment (“DME”), § 1395x(n) & (s)(6), which are
“reasonable and necessary for the diagnosis or treatment of
illness or injury,” § 1395y(a)(1)(A).

       HHS contracts out the administration of DME
coverage determinations to a DME Medicare administrative
contractor (“DMAC”). § 1395u(a). The DMAC may make
an “initial determination” whether a claimant is entitled to
benefits, § 1395ff(a)(1)(A), based in part on whether a DME
is “reasonable and necessary,” 68 Fed. Reg. 63,692, 63,693
(Nov. 7, 2003). If the DMAC denies the claim, the claimant
may engage in a five-step appeals process. First, the claimant
may request a “redetermination” by the same DMAC. 42
U.S.C. § 1395ff(a)(3).

        Second, the claimant may request a “reconsideration,”
§ 1395ff(b)(1)(A), by a qualified independent contractor
(“QIC”), § 1395ff(c)(1), which must have “sufficient medical
. . . and other expertise . . . and sufficient staffing” for such
reconsiderations, § 1395ff(c)(3)(A).            If the initial
determination was based on whether the DME is medically
reasonable and necessary, then the QIC’s review “shall
include consideration of the facts and circumstances of the
initial determination by a panel of physicians or other
appropriate health care professionals.” § 1395ff(c)(3)(B)(i).
Similarly, “[w]here a claim pertains to . . . the provision of
items or services by a physician, a reviewing professional
must be a physician.” 42 C.F.R. § 405.968(c)(3). The QIC’s
decision with respect to whether the DME is medically
reasonable and necessary must “be based on applicable

                               6
information, including clinical experience (including the
medical records of the individual involved) and medical,
technical,   and      scientific  evidence,”    42    U.S.C.
§ 1395ff(c)(3)(B)(i), and must include “an explanation of the
medical and scientific rationale for the decision,”
§ 1395ff(c)(3)(E).

       Third, the claimant may appeal to an administrative
law judge (“ALJ”), § 1395ff(b)(1)(A) & (d)(1)(A), who
reviews the QIC record, § 1395ff(c)(3)(J). Fourth, the
claimant may appeal to the Medicare Appeals Counsel within
the Departmental Appeals Board. § 1395ff(b)(1)(A) &
(d)(2)(A). Finally, the claimant may seek judicial review. §
1395ff(b)(1)(A) & § 405(g).

                             B.

      Zizic is the former President and CEO of the now-
bankrupt    BioniCare     Medical     Technologies,   Inc.
(“BioniCare”), a company formed to commercialize the BIO-
1000, a DME designed to treat osteoarthritis of the knee.
BioniCare attempted to bill Medicare for the BIO-1000, but
many claims were denied as not medically reasonable and
necessary.    Zizic personally participated on behalf of
BioniCare in the ALJ appeals of the QIC’s denials of the
BIO-1000 claims.

       From July 2005 to about December 2006, Q2A
contracted with HHS to serve as the QIC responsible for
review of all DME claim denials across the nation. Q2A
frequently denied BIO-1000 claims, always as medically
unreasonable and unnecessary. However, Q2A’s decisions

                             7
were reached without the physician review required by the
Medicare Act, HHS regulations, and its Government contract,
as demonstrated by the lack of evidence of such review in the
ALJ files.

        According to a March 28, 2007 affidavit by Wayne
van Halem (“van Halem”), a former Q2A employee who
managed all DME appeals for all DMAC regions from
November 2005 to September 2006, Q2A employed only
three or four physicians to review several hundred daily
appeals of claim denials. Because Q2A was short-staffed, it
first implemented an internal policy to deny all BIO-1000
claims, which were reviewed by a single nurse rather than a
panel of physicians. Then, Q2A allowed non-physician
subcontractors to prepare BIO-1000 appeals for review by a
single physician. Q2A finally developed a mail merge letter
that automatically denied BIO-1000 claims without any
review.

       From about January 2007 to the present, RTS replaced
Q2A, contracting with HHS to serve as the QIC responsible
for review of all DME claim denials throughout the country.
RTS consistently denied BIO-1000 claims, often as medically
unreasonable and unnecessary. Like Q2A, RTS arrived at its
decisions without performing the physician review required
by the Medicare Act, HHS regulations, and its Government
contract. RTS employed only two physicians to review the
more than one hundred thousand annual appeals of claim
denials.

     On July 26, 2007, BioniCare declared bankruptcy.
Amended Complaint at ¶ 10, Almy v. Sebelius, No. 08-cv-

                             8
01245 (D. Md. May 28, 2008). The bankruptcy trustee then
sued HHS, seeking the reversal of the denial of seven groups
of BIO-1000 claims as neither medically reasonable nor
necessary. Id. at ¶¶ 1-6. During discovery, HHS produced
almost 35,000 pages of documents, Statement of Material
Facts in Support of Plaintiff’s Motion for Summary Judgment
(“Summary Judgment Submission”) at ¶¶ 22-27, Almy v.
Sebelius, No. 08-cv-01245 (D. Md. Nov. 6, 2009), at least
some of which contained personal medical information
related to individual beneficiaries, id. at ¶¶ 46-47. On the
trustee’s behalf, Zizic “personally reviewed the medical
records for claims that [we]re the subject of th[at] complaint
and based on [his] experience and expertise . . . , explained
why the BIO-1000 was reasonable and medically necessary
for the beneficiary.” Id. at ¶ 68. The trustee moved for
summary judgment, arguing that the QICs, which were
“funded by a contract with [HHS],” id. at ¶ 13, “subjected
none of the [BIO-1000] claims to physician or nurse review,”
id. at ¶ 66 (citations omitted), despite the fact that they were
“required to use a panel of physicians or other appropriate
health care professionals,” id. at ¶ 13 (quotation omitted).
The trustee also alleged that the coverage decisions of the
QICs on the medical reasonableness and necessity of the
BIO-1000 were inconsistent. Id. at ¶¶ 44-45.




                               9
                             C.

       On December 4, 2009, Zizic filed his complaint
asserting FCA claims against Q2A and RTS, 4 to which he
attached van Halem’s affidavit. The Government declined to
intervene. Q2A and RTS moved to dismiss Zizic’s complaint
with prejudice for lack of subject matter jurisdiction under
Rule 12(b)(1). Zizic filed an opposition, which included a
request for leave to amend his complaint, but which did not
include a draft amended complaint. The District Court, after
holding a hearing, granted the motions to dismiss the
complaint, concluding that it lacked jurisdiction because the
      4
          On May 20, 2009, the Fraud Enforcement and
Recovery Act of 2009 (“FERA”), Pub. L. No. 111-21, 123
Stat. 1617 (2009), “amended the FCA and re-designated 31
U.S.C. § 3729(a)(1) as 31 U.S.C. § 3729(a)(1)(A) and 31
U.S.C. § 3729(a)(2) as 31 U.S.C. § 3729(a)(1)(B).” United
States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d
295, 303 (3d Cir. 2011). Because Zizic alleged that Q2A
violated the FCA from July 2005 to about December 2006, he
asserted claims against it under § 3729(a)(1) and (a)(2) (pre-
FERA), and because Zizic alleged that RTS violated the FCA
from about January 2007 to the present, he asserted claims
against it under both § 3729(a)(1) and (a)(2) (pre-FERA) and
§ 3729(a)(1)(A) and (a)(1)(B) (post-FERA). Here, we are not
concerned with the differences between the pre- and post-
FERA versions of the FCA because Zizic’s “underlying
burden to prove a substantive violation of the FCA is in no
way intertwined with his burden to establish jurisdiction
pursuant to 31 U.S.C. § 3730.” Atkinson, 473 F.3d at 515.


                             10
allegations against Q2A and RTS were based on public
disclosures, and because Zizic was not an original source of
that information. 5 Zizic timely appealed.

                               II.

        Zizic argues that the District Court had subject matter
jurisdiction over this case under 28 U.S.C. § 1331 and under
the FCA, 31 U.S.C. § 3732(a). We have jurisdiction over this
appeal under 28 U.S.C. § 1291. We exercise plenary review
of the District Court’s dismissal of the complaint for lack of
jurisdiction under the FCA’s public disclosure bar, United
States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506,
514 (3d Cir. 2007), and we review the District Court’s
dismissal of the complaint with prejudice for an abuse of
discretion, United States ex rel. Wilkins v. United Health
Grp., Inc., 659 F.3d 295, 302 (3d Cir. 2011).

        Zizic concedes that the District Court correctly
concluded that Q2A and RTS launched a factual, rather than
facial, jurisdictional attack, Zizic’s Opening Br. at 19, by
challenging “the actual failure of [his] claims to comport with

       5
           Q2A and RTS also moved to dismiss Zizic’s
complaint for failure to allege fraud with particularity, Fed. R.
Civ. P. 9(b), and for failure to state a claim on which relief
can be granted, Fed. R. Civ. P. 12(b)(6). Because the District
Court dismissed the complaint for lack of subject matter
jurisdiction, it did not address these issues, and because we
will affirm the District Court on the same basis, neither will
we.


                               11
the jurisdictional prerequisites contained in 31 U.S.C.
§ 3730(e)(4),” App. at 6 (quoting Atkinson, 473 F.3d at 514).
Thus, we may properly consult evidence outside Zizic’s
pleadings. See Atkinson, 473 F.3d at 514. Significantly,
Zizic bears the burden of persuasion of establishing
jurisdiction, see id., and his jurisdictional allegations are not
entitled to a presumption of truthfulness, see id. at 509 n.4.

                              III.

        In this appeal, Zizic asks us to reverse the District
Court on three alternative grounds. First, Zizic asserts that
the District Court erred in concluding that the FCA’s public
disclosure bar applied to his case because his allegations
against Q2A and RTS were not based on public disclosures.
Second, Zizic claims that even if his allegations against Q2A
and RTS were based on public disclosures, the District Court
erred in concluding that the public disclosure bar applied to
his case because he was an original source of that
information. Third, Zizic contends that even if the public
disclosure bar did apply to his case, the District Court abused
its discretion in dismissing his complaint with prejudice. We
address and reject these arguments in the following
discussion.

                               A.

       The District Court concluded that the FCA’s public
disclosure bar divested it of subject matter jurisdiction over
Zizic’s claims in part because his claims against Q2A and
RTS were based on the public disclosure of transactions
warranting an inference of fraud in the Almy litigation. Zizic

                               12
disputes the District Court’s determination, arguing that the
Almy litigation did not publicly disclose any fraudulent
transaction on which his claims could have been based. We
disagree.

        The public disclosure bar, in pertinent part, withdraws
jurisdiction over a qui tam suit that is “based upon the public
disclosure of allegations or transactions in a . . . civil . . .
hearing.” 31 U.S.C. § 3730(e)(4)(A). In other words, the
public disclosure bar applies if: “(1) there was a ‘public
disclosure;’ (2) ‘in a . . . civil . . . hearing . . . ;’ (3) of
‘allegations or transactions’ of the fraud; [and] (4) that the
relator’s action was ‘based upon.’” United States ex rel.
Paranich v. Sorgnard, 396 F.3d 326, 332 (3d Cir. 2005)
(citation omitted). Although the purpose of the public
disclosure bar is “to strike a balance between encouraging
private persons to root out fraud and stifling parasitic
lawsuits,” Graham Cnty. Soil & Water Conservation Dist. v.
United States ex rel. Wilson, 559 U.S. 280, 295 (2010), it has
a “generally broad scope,” Schindler Elevator Corp. v. United
States ex rel. Kirk, 131 S. Ct. 1885, 1891 (2011).

                               1.

       Starting out with the first and second elements, we
analyze whether “information was [publicly] disclosed via
one of the sources listed in § 3730(e)(4)(A).” Atkinson, 473
F.3d at 519. The District Court held that “civil litigation
hearings are § 3730(e)(4)(A) public disclosures.” App. at 7.
Zizic does not contest this conclusion. We too hold that the
Almy litigation publicly disclosed the information included in
the Summary Judgment Submission filed by the trustee, see

                              13
Paranich, 396 F.3d at 334 (holding that the public disclosure
bar precludes qui tam suits based on a complaint filed with
the court and available to the public), and the discovery
produced by HHS, see United States ex rel. Stinson, Lyons,
Gerlin & Bustamante, P.A. v. The Prudential Ins. Co., 944
F.2d 1149, 1158 (3d Cir. 1991) (holding the same with
respect to “discovery material . . . not under any court
imposed limitation as to its use”).

                              2.

       Moving on to the third element, we consider whether
the information publicly disclosed in the Almy litigation
constituted allegations or transactions of fraud. 6         An
allegation of fraud is an explicit accusation of wrongdoing.
United States ex rel. Dunleavy v. Cnty. of Del., 123 F.3d 734,
741 (3d Cir. 1997), abrogated on other grounds by Wilson,
559 U.S. 280. A transaction warranting an inference of fraud
is one that is composed of a misrepresented state of facts plus
the actual state of facts. Id.

       We have adopted a formula to represent when
information publicly disclosed in a specified source qualifies
as an allegation or transaction of fraud:



      6
          The FCA “bars suits based on publicly disclosed
‘allegations or transactions,’ not information.” Dunleavy, 123
F.3d at 740 (quoting Wang v. FMC Corp., 975 F.2d 1412,
1418 (9th Cir. 1992)).


                              14
       “If X + Y = Z, Z represents the allegation of
       fraud and X and Y represent its essential
       elements. In order to disclose the fraudulent
       transaction publicly, the combination of X and
       Y must be revealed, from which readers or
       listeners may infer Z, i.e., the conclusion that
       fraud has been committed.”

Id. (quoting United States ex rel. Springfield Terminal Ry. Co.
v. Quinn, 14 F.3d 645, 654 (D.C. Cir. 1994)). The essential
elements of the allegation of fraud [Z] are “a misrepresented
[X] and a true [Y] state of facts.” Atkinson, 473 F.3d at 519
(citation omitted). Thus, the public disclosure bar applies “if
either Z (fraud) or both X (misrepresented facts) and Y (true
facts) are [publicly] disclosed by way of a listed source.” Id.

     The District Court decided that the Summary
Judgment Submission publicly disclosed a transaction




                              15
warranting an inference of fraud. 7 The District Court’s
reasoning centered on the trustee’s statement:

       “Although the Medicare regulations required
       physician review at the QIC for claims for
       services or items provided by a physician, only
       two of the claims in [a certain case] show any
       indicia of physician review and only a small
       number of claims in [the same case] have
       indicia of nurse review. None of the claims in
       the other cases have any evidence of nurse or
       physician review.      In fact, the QIC that
       originally reviewed claims for the BIO-1000
       subjected none of the claims to physician or
       nurse review.”




       7
         According to Zizic, an “inference of fraud” is “not
sufficient” to invoke the public disclosure bar, Zizic’s
Opening Br. at 29 (quotation omitted), and “presenting facts,
without raising the underlying fraud” is also inadequate to do
so, id. at 30. As our discussion indicates, our precedent
forecloses these arguments. See United States ex rel. Mistick
PBT v. Hous. Auth. of the City of Pittsburgh, 186 F.3d 376,
385 (3d Cir. 1999) (“We have held that the public disclosure
of a ‘transaction[]’ within [31 U.S.C. § 3730(e)(4)(A)]
requires the disclosure of . . . the misrepresented state of facts
and the true state of facts so that the inference of fraud may
be drawn.” (citing Dunleavy, 123 F.3d at 740-41)).


                               16
App. at 9 (quoting Summary Judgment Submission at ¶ 66). 8
However, The District Court did not separate out the
misrepresented facts and the true facts.

       Zizic argues that the Almy litigation did not publicly
disclose a fraudulent transaction. Zizic admits that the true
state of facts – that “unnamed QICs performed second-level
reviews as part of a five-step appeals process that was
generally fraught with problems at each level” – was publicly
disclosed in the Almy litigation. Zizic’s Opening Br. at 28.
He asserts, however, that the misrepresented state of facts –
that “either [RTS] or Q2A, in particular, performed sham
second-level Medicare reviews in violation of Medicare
regulations and statutes and their contracts” – was not. Id.


      8
          Zizic implies that the District Court should not have
considered the Summary Judgment Submission. Zizic’s
Opening Br. at 29 n.4 (“It is important to note that Plaintiffs
never mentioned or referred to these prior proceedings in their
Complaint. The District Court relied entirely on Appellees’
Motions to Dismiss[, which referenced the Almy litigation.]”).
We find this suggestion difficult to square with Zizic’s
acknowledgement that “[p]leadings in the Almy Litigation,
which the District Court relied on in its decision, are
appropriate in resolving a factual attack on subject matter
jurisdiction.” Zizic’s Reply Br. at 14 (citation omitted). In
any event, the District Court appropriately reviewed external
evidence in this factual challenge to jurisdiction under Rule
12(b)(1). Gould Elecs. Inc. v. United States, 220 F.3d 169,
176 (3d Cir. 2000).


                              17
        The problem with Zizic’s characterization of the
misrepresented state of facts is that it is actually an allegation
of fraud. The true state of facts, as set forth in Zizic’s
complaint, is that Q2A and RTS were obligated to perform
physician reviews in second-level appeals under Government
contracts incorporating Medicare rules, App. at 30 ¶ 3; this
true state of facts was publicly disclosed by the trustee,
Summary Judgment Submission at ¶ 13 (“If the appeal
involves medical necessity, the QIC is required to use a panel
of physicians or other appropriate health care professionals.
42 C.F.R. § 405.968(a). If the item is provided by a
physician, the QIC must use a physician when conducting the
reconsideration. 42 C.F.R. § 405.968(c)(3).” Similarly, the
misrepresented state of facts, as set forth in Zizic’s complaint,
is that Q2A and RTS received payment under those contracts
despite their failure to perform such services, App. at 55 ¶
153; this misrepresented state of facts was also publicly
disclosed by the trustee, Summary Judgment Submission at
¶ 13 (“[The QIC] is . . . funded by a contract with [HHS]”);
id. at ¶ 66 (“None of the claims . . . have any evidence of
nurse or physician review [by the QIC].”). Thus, we hold that
the Almy litigation publicly disclosed a fraudulent transaction.

                               3.

       Finishing up with the fourth element, we decide
“whether the relator’s complaint is based on those [public]
disclosures.” Atkinson, 473 F.3d at 519. To be based on
allegations or transactions of fraud, claims need not be
“actually derived from” public disclosures. United States ex
rel. Mistick PBT v. Hous. Auth. of the City of Pittsburgh, 186
F.3d 376, 385-88 (3d Cir. 1999). Rather, claims need only be

                               18
“supported by”     or   “substantially   similar   to”   public
disclosures. Id.

        The District Court concluded that Zizic’s claims were
substantially similar to the fraud allegation that could be
inferred from the fraudulent transaction publicly disclosed in
the Almy litigation. Zizic contends that his claims were not
based on that public disclosure because “the Almy Litigation
never identifies or refers to [RTS] or Q2A.” Zizic’s Opening
Br. at 31. Zizic attempts to analogize this case to the Seventh
Circuit’s decision in United States ex rel. Baltazar v. Warden,
635 F.3d 866 (7th Cir. 2011). There, the relator alleged that a
certain chiropractor submitted fraudulent bills to Medicare,
and an HHS report publicly disclosed that about half of a
sample of chiropractors engaged in similar improper conduct.
The court reasoned that the public disclosure alone would not
support an FCA suit because it did not reveal any particular
responsible party.      Instead, it was only the relator’s
identification of an individual chiropractor, which placed that
particular provider among the unnamed wrongdoers
referenced in the report, that enabled an FCA suit. Thus, the
court held that the relator’s claims were not based on the
public disclosure.

        Q2A and RTS counter that this case is comparable to
the Seventh Circuit’s decision in United States ex rel. Gear v.
Emergency Med. Assocs. of Ill., Inc., 436 F.3d 726 (7th Cir.
2006). There, the relator alleged that a certain teaching
hospital submitted fraudulent bills to Medicare, but
Government and media reports publicly disclosed the same
fraud throughout that industry. The court rejected the
relator’s argument that it was impossible to infer the identity

                              19
of the particular provider he accused from the public
disclosures inculpating each and every teaching hospital, and
ruled that “[i]ndustry-wide public disclosures bar qui tam
actions against any defendant who is directly identifiable
from the public disclosures.” Id. at 729 (citations omitted).
Thus, the court held that the relator’s claims were based on
the public disclosures.

        This case is closer to Gear than to Baltazar. Even if
Q2A and RTS were not actually identified in the Almy
litigation, they were directly identifiable from that public
disclosure. According to Zizic’s complaint, the QIC industry
is an industry of one; Q2A and RTS were the only QICs
during their respective contractual terms. App. at 32 ¶¶ 12 &
15. Additionally, the identities of Q2A and RTS were
publicly available. HHS, Listing of Active Contracts–Centers
for Medicare and Medicaid Services 31 (2011), available at
http://www.hhs.gov/about/smallbusiness/Active%20Contracts
/pdf/cms.pdf.     Because Q2A and RTS were directly
identifiable from the Almy litigation, Zizic’s claims are
substantially similar to the fraudulent transactions in the
Summary Judgment Submission.

       Separately, Zizic argues that his claims are not
substantially similar to the Almy litigation because he added
some information to the trustee’s account of the fraudulent
transaction. For example, Zizic points out that the trustee
only alleged that QIC coverage decisions about medical
reasonableness and necessity were inconsistent, see Summary
Judgment Submission at ¶¶ 44-45, while he added an
allegation that a particular nurse-reviewer at RTS was
responsible for the inconsistent coverage determinations,

                             20
App. at 48 ¶ 124. Zizic’s complaint does add some minor
details to the trustee’s description of the fraudulent
transaction.

       Nonetheless, the public disclosure bar is not confined
to actions “solely based upon” public disclosures. Glaser v.
Wound Care Consultants, Inc., 570 F.3d 907, 920 (7th Cir.
2009) (citing United States ex rel. McKenzie v. BellSouth
Telecomms., Inc., 123 F.3d 935, 940 (6th Cir. 1997); Fed.
Recovery Servs., Inc. v. United States, 72 F.3d 447, 451 (5th
Cir. 1995)). Instead, the public disclosure bar covers actions
simply “based upon” public disclosures, including actions
“even partly based upon” such allegations or transactions. Id.
(quoting United States ex rel. The Precision Co. v. Koch
Indus., Inc., 971 F.2d 548, 552 (10th Cir. 1992)). We
conclude that Zizic’s additional information, i.e., the identity
of the QIC employee responsible for the inconsistent
coverage determinations, is too insubstantial to prevent his
otherwise substantially similar allegations from being based
on the Almy litigation. Therefore, we hold that Zizic’s claims
against Q2A and RTS were based on the publicly disclosed
fraudulent transaction in the Almy litigation. 9


       9
        Because we agree with the District Court that Zizic’s
claims against Q2A and RTS were based on the public
disclosure of a fraudulent transaction in the Almy litigation,
we express no opinion on the District Court’s conclusion that
Zizic’s claims were also based on public disclosures of
fraudulent transactions in the Medicare administrative
hearings.


                              21
                               B.

       The District Court’s conclusion that the FCA’s public
disclosure bar deprived it of subject matter jurisdiction over
Zizic’s claims was also based on its determination that Zizic
was not an original source of that information. Zizic protests,
arguing that he had direct and independent knowledge of the
information on which his allegations against Q2A and RTS
were based. We cannot agree.

       Even if the public disclosure bar would otherwise
apply to a claim, it does not when “the person bringing the
action is an original source of the information.” 31 U.S.C. §
3730(e)(4)(A).     The term “‘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 . . . which is based on the information.”
§ 3730(e)(4)(B). The word “information” in turn refers to the
facts on which the relator’s allegations are based, not the facts
on which the publicly disclosed allegations or transactions of
fraud are based. Rockwell Int’l Corp. v. United States, 549
U.S. 457, 470-72 (2007).

                               1.

       The District Court determined that Zizic lacked direct
knowledge to the extent his claims against Q2A depended on
van Halem’s affidavit. A relator possesses direct knowledge
if he obtains it without any “intervening agency,
instrumentality, or influence.” Paranich, 396 F.3d at 335
(quotation omitted). In other words, direct knowledge is

                               22
based on “first-hand” information, id. at 336 (quoting United
States ex rel. Findley v. FPC-Boron Emps.’ Club, 105 F.3d
675, 690 (D.C. Cir. 1997)), and it is gained “by the relator’s
own efforts, and not by the labors of others,” id. (quoting
United States ex rel. Hafter v. Spectrum Emergency Care,
Inc., 190 F.3d 1156, 1162 (10th Cir. 1999)).

       Zizic argues that his knowledge was direct. He asserts
that “no document was ever provided by any third party
stating that medical reviews by Q2A . . . were not done . . . in
the Medicare Appeal.” Zizic’s Opening Br. at 42 (emphasis
omitted).     However, van Halem provided that exact
information in his affidavit. App. at 62 ¶ 17 (“[Q2A] simply
issued a denial with a mail merge program without according
the claims any review.”).

       Zizic also contends that he had direct knowledge from
his personal participation in the ALJ appeals and that van
Halem’s affidavit “merely substantiated” his “suspicion of
fraud.” Zizic’s Reply Br. at 13. Zizic analogizes his case to
the D.C. Circuit’s decision in Springfield. There, civil
discovery publicly disclosed information that did not
constitute allegations or transactions of fraud, but that did
pique the relator’s curiosity. The relator then “conduct[ed] its
own investigation” of that information, 14 F.3d at 656, by
“interview[ing] with individuals and businesses identified” in
the discovery, id. at 657. Because the relator “bridged the
gap” between the innocuous publicly disclosed information
and the allegation of fraud through “its own efforts and
experience,” the court held that it was an original source. Id.



                              23
        Certainly, van Halem did more than substantiate
Zizic’s suspicions; in fact, the affidavit is the sole source of
all of the specific incriminating facts alleged against Q2A in
the complaint. Additionally, Springfield is distinguishable.
At oral argument, Zizic indicated that van Halem reached out
to him; unlike the relator in Springfield, Zizic did not discover
van Halem as a result of his own investigation. Indeed, Zizic
has provided no information about his investigation, an
omission that is especially troubling in light of the fact that it
is Zizic’s burden to establish the direct nature of his
knowledge. Thus, we conclude that Zizic lacked direct
knowledge to the extent his claims against Q2A relied on van
Halem’s affidavit.

                               2.

       The District Court also determined that Zizic lacked
independent knowledge of his surviving claims because his
information was based on § 3730(e)(4)(A) public disclosures.
A relator’s knowledge is independent if it “does not depend
on public disclosures.” 10 Atkinson, 473 F.3d at 520 (citation
omitted). Significantly, the concept of a public disclosure
under § 3730(e)(4)(B) is broader than the concept of a public
disclosure under § 3730(e)(4)(A); a public disclosure under §

       10
          The relator must know of the public disclosure in
order for his information to depend on it. United States ex
rel. Paranich v. Sorgnard, 396 F.3d 326, 337 & n.12 (3d Cir.
2005). Here, Zizic admits that he knew about the Medicare
administrative appeals, App. at 44 ¶ 93; id. at 47 ¶ 116; and
the Almy litigation, Zizic’s Reply Br. at 16.


                               24
3730(e)(4)(B) encompasses not only information that is
disclosed via the sources enumerated in § 3730(e)(4)(A), but
also information that is part of the public domain. Id. at 521-
23. This distinction is important. On the one hand, “reliance
solely on ‘public disclosures’ under § 3730(e)(4)(A) is always
insufficient under § 3730(e)(4)(B) to confer original source
status.” Id. at 522. On the other hand, “reliance on public
information that does not qualify as a public disclosure under
§ 3730(e)(4)(A) may also preclude original source status,” id.,
depending on “the extent of that reliance,” and “the nature of
the information in the public domain,” id. (citing United
States ex rel. Barth v. Ridgedale Elec., Inc., 44 F.3d 699, 703-
04 (8th Cir. 1995)), as well as “the availability of
information,” and “the amount of labor and deduction
required to construct the claim,” id. (quoting Kennard v.
Comstock Res., Inc., 363 F.3d 1039, 1046 (10th Cir. 2004)).

       Zizic presents two reasons why his knowledge was not
dependent on the Almy litigation. First, he asserts that
because only he “had the requisite medical expertise and
background to understand and review the Medicare appeals
files concerning the DMEs” that were produced during
discovery in the Almy litigation, the trustee relied on his
“labor and deduction” to construct her claims. Zizic’s Reply
Br. at 16. However, we have repeatedly rejected the
argument that a realtor’s knowledge is independent when it is
gained through the application of expertise to information
publicly disclosed under § 3730(e)(4)(A). See, e.g., Atkinson,
473 F.3d at 526 n.27; Stinson, 944 F.2d at 1160. Here, Zizic
merely applied his expertise to the information in the Almy



                              25
litigation, a § 3730(e)(4)(A) public disclosure. See supra Part
III.A.1.

       Second, Zizic contends that his knowledge is
independent because it is based on his “direct involvement
with the DME Medicare appeals . . . over a number of years”
prior to the Almy litigation. Zizic’s Opening Br. at 39; see
also App. at 44 ¶ 93; id. at 47 ¶ 116. According to Zizic, the
information in the administrative appeals is not part of the
public domain because the public may not obtain that
information by participating in those proceedings and because
the information in those proceedings is protected pursuant to
the Health Insurance Portability and Accountability Act of
1996 (“HIPAA”), Pub. L. No. 104-191, 110 Stat. 1936
(1996). Moreover, only he could craft his claims, thanks to
his medical expertise.

       At the outset, the record reflects neither the nature of
Zizic’s role in the Medicare appeals nor the manner in which
he gained his first-hand knowledge. For example, at oral
argument, Zizic made the unsupported assertion that he
became involved in the five-step appeals process between the
QIC’s second-level review and the ALJ’s third-level review.
In contrast, the complaint contains actual information
indicating that Zizic’s earliest involvement in the appeals
process came during the third stage when he reviewed the
ALJ files. App. at 44 ¶ 95. Because Zizic has failed to
persuade us otherwise, we interpret his argument to be that he




                              26
obtained his independent knowledge during the ALJ
appeals. 11

       Zizic’s argument about the limitation on participation
in the ALJ appeals is ultimately unconvincing. It is true that
the ALJ appeals are not open to the general public.
Nonetheless, the list of possible parties who may participate
in the proceedings includes:           beneficiaries, provider-
assignees, supplier-assignees, and state agencies, 42 C.F.R.
§ 405.906; HHS and its contractors, § 405.1012; and,
significantly, “other persons the ALJ considers necessary and
proper,” § 405.1030. Of the numerous parties who may
review the ALJ appeal files, there are many, such as HHS,
beneficiaries, and other providers and suppliers, who would
have a compelling interest in bringing FCA claims against
HHS contractors like Q2A and RTS. Zizic has not identified
who, other than himself, was involved in the BIO-1000
appeals or indicated to what extent the ALJ files became part
of the public domain. These omissions are significant
because, at this stage of the litigation, Zizic bears the burden
of establishing such facts and is not entitled to have us draw
inferences in his favor.

      Zizic’s argument about the impact of HIPAA –
namely, that his allegations were based on “the specific and

       11
         An ALJ hearing is undoubtedly an “administrative
hearing” within the meaning of § 3730(e)(4)(A). Here, we
will assume, without deciding, that the information in the ALJ
appeals is not “publicly disclosed” as that term is used in
§ 3730(e)(4)(A).


                              27
relevant information . . . in the medical charts,” and that such
information was blocked from the public domain by HIPAA –
also fails to save his claims for two reasons. Zizic’s Opening
Br. at 34. First, Zizic fails to elaborate on what the “specific
and relevant” information was and what such information
suggested to him. In fact, the complaint reveals that a
significant basis of Zizic’s claims was that the ALJ “files
lacked evidence of the required physician or health care
professional review,” suggesting that it was the absence of
information, not the presence of particular information, that
tipped him off. App. at 44 ¶ 95.

        Second, it is true that the ALJ records are restricted by
HIPAA, 45 C.F.R. § 160.102, and that HIPAA generally
prohibits the disclosure of protected health information
(“PHI”), § 164.502. But PHI, which includes facts such as
names, addresses, dates, contact information, Government
identification numbers, insurance policy numbers, and the
like, § 164.514, is defined as “individually identifiable health
information,” § 160.103 (emphasis added). In other words,
PHI refers to information that could be used to identify a
patient. In contrast, a patient’s medical history and treatment
plan, unlike her name and address, would not usually give
away her identity. Thus, the information protected by HIPAA
is not the information that would lead to the allegation of
fraud Zizic made against Q2A and RTS.

      The Almy litigation supports our suspicion. There,
HHS produced HIPAA-compliant discovery from the ALJ
appeals, see Summary Judgment Submission at ¶¶ 22-27,
which publicly disclosed the medical information of
anonymized beneficiaries, id. at ¶¶ 46-47. Zizic “personally

                               28
reviewed” this data, id. at ¶ 68, and his review “was the
source of the trustee’s allegations,” Zizic’s Reply Br. at 14
(quotation omitted), which we have concluded were
substantially similar to his own claims, supra Part III.A.3. In
short, the Almy litigation demonstrates that the ALJ records
that were redacted pursuant to HIPAA revealed the
information necessary to raise an inference of fraud. Because
Zizic failed to show who participated in the ALJ proceedings
and who accessed the ALJ records, we cannot assume that the
relevant HIPAA-redacted information remained out of the
public domain. See Atkinson, 473 F.3d at 531 (holding that
“a plaintiff/relator cannot rely solely on information in the
public domain to substantiate original source status”).

       Zizic contends, however, that only he could deduce the
significance of this information due to his expertise. But
Zizic has not explained how his expertise aided his analysis.
Surely a member of the public could conclude, with minimal
labor, that the absence of evidence of a required review
indicates that such a review was never performed. See
Dunleavy, 123 F.3d at 743 (concluding that the omission of
required information in a Government report publicly
disclosed the misrepresented state of facts and completed the
inference of fraud). Thus, the amount of deduction required
to formulate the claims was low. See Atkinson, 473 F.3d at
523.

       In these circumstances, Zizic has failed to persuade us
that he has independent knowledge based on his participation
in the ALJ appeals. We acknowledge that the original source
exception to the public disclosure bar is a complicated area of
the law, and that the HIPAA overlay makes this case

                              29
especially challenging. But Zizic, by failing to provide the
missing details described in our discussion, has not made our
job any easier. Zizic had the chance to supply such
information in the District Court by producing his relator
statement and by amending his complaint. 12 Zizic did not
take advantage of these opportunities and, since he bears the
burden of establishing jurisdiction, we will not reward his
failure to do so. Because Zizic lacked direct and independent
knowledge of the information on which his allegations
against Q2A and RTS were based, 13 we conclude that he is
not an original source of that information, and that the public
disclosure bar precludes jurisdiction over his case.

                                   C.

       The District Court implicitly denied Zizic’s request for
leave to file an amended complaint by granting Q2A’s motion
to dismiss with prejudice. Zizic charges that the District
Court abused its discretion in so doing. We disagree.



      12
           See infra Part III.C.
      13
          Because the District Court determined that Zizic
lacked direct and independent knowledge of the information
on which his allegations were based, it had no occasion to
decide whether Zizic voluntarily provided that information to
the Government before he filed suit, another original source
requirement. 31 U.S.C. § 3730(e)(4)(B). We need not
resolve this issue for the same reason.


                                   30
       Initially, Zizic was entitled to amend his complaint –
and provide the missing information highlighted in our
discussion above – once “as a matter of course” within
twenty-one days after service of the motions to dismiss by
Q2A and RTS. Fed. R. Civ. P. 15(a)(1)(B). Since he did not
do so, he could have amended his complaint “only with . . .
the [District C]ourt’s leave.” Rule 15(a)(2). The District
Court was to give its leave “freely” if “justice so require[d].”
Id.

       Here, the District Court did not need to “worry about
amendment,” Fletcher-Harlee Corp. v. Pote Concrete
Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007), because
Zizic’s request for leave to amend his complaint was
improper for two reasons. First, Zizic requested leave to
amend his complaint without referencing Rule 12(b)(1) in his
opposition to the motions to dismiss, and a “bare request in an
opposition to a motion to dismiss – without any indication of
the particular grounds on which amendment is sought . . . –
does not constitute a motion within the contemplation of Rule
15(a).” Kowal v. MCI Commc’ns Corp., 16 F.3d 1271, 1280
(D.C. Cir. 1994) (quotation omitted). Second, Zizic also
neglected to attach a draft amended complaint, a failure that
“is fatal to a request for leave to amend.” See Fletcher-
Harlee, 482 F.3d at 252 (citations omitted). Because Zizic
did not properly move to amend his complaint, “it could
hardly have been an abuse of discretion for the District Court
not to have afforded [him] such leave sua sponte.” Kowal, 16
F.3d at 1280 (quotation omitted); see also Wilkins, 659 F.3d
at 315 (concluding that where the plaintiffs’ request for leave
to amend their complaint was made in their reply to the


                              31
defendants’ motion to dismiss and without a draft amended
complaint, the district court “did not abuse its discretion by
denying their deficient request to amend” (citation omitted)).

                             IV.

        We hold that Zizic’s complaint must be dismissed for
lack of subject matter jurisdiction under Rule 12(b)(1). We
conclude that Zizic’s claims are foreclosed by the FCA’s
public disclosure bar because they were based on the
fraudulent transaction publicly disclosed in the Almy
litigation, and because he was not an original source, lacking
direct and independent knowledge of the information on
which his allegations were based. We also conclude that the
District Court did not abuse its discretion in denying Zizic’s
request for leave to amend his complaint. Therefore, we will
affirm the District Court’s dismissal of Zizic’s complaint with
prejudice.




                              32
