Two registered nurses who blew the whistle on an alleged Medicare fraud by a major hospice provider have sparked a record $24.7 million settlement with the U.S. government by their former employer, from which the RNs themselves will get $4.9 million.
The settlement by Birmingham, Ala.-based SouthernCare, which admits no wrongdoing, puts an end to two federal lawsuits that were unsealed yesterday, reports the Birmingham News. The qui tam litigation contends that the private company, which has offices in 15 states, enrolled ineligible patients in hospice care when they didn't qualify (patients must be expected to have only six months or less to live).
"It was a numbers game with SouthernCare," attorney Henry Frohsin, who represents one of the nurses, tells the newspaper. "They were trying to bolster their rolls because Medicare pays for hospice care and does not (always) pay for home care."
In Donald A. Bregin v. Liquidebt Systems Inc. and SIRVA Inc.,
No. 08-1390, Donald Bregin filed a suit against Liquidebt (LSI) and
SIRVA, claiming LSI fired him in retaliation for his refusal to
participate in illegal accounting practices. LSI provided collection
services for SIRVA, where Bregin originally worked until LSI hired him as vice president of operations. LSI had a contract with SIRVA to meet certain collection goals or face a financial penalty.
The 7th Circuit Court of Appeals found undisputed facts that Bregin's suit must fail. Indiana is an employment-at-will state, and there are only rare occasions in which an employer can't terminate any employee for any reason, such as not firing someone who doesn't want to participate in criminal conduct, as in McClanahan v. Remington Freight Lines, Inc, 517 N.E.2d 390 (Ind. 1988).
Bregin claimed he couldn't lawfully stay silent about SIRVA's allegedly illegal accounting practices, but he never offered any specifics or identified what illegal act he was asked to commit or condone, wrote Judge Terence Evans.
Bregin also wanted the appellate court to find a new exception under Indiana's employment-at-will doctrine - that as a whistle-blower under the Sarbanes-Oxley Act, he's afforded certain protections against wrongful discharge under state law. But again, Bregin failed to specify any law that has been violated and is vague in describing the irregularities in SIRVA's accounting practices, wrote Judge Evans.
We cannot agree. As we just discussed, Bregin does not pinpoint any law that has been violated. He says because SIRVA was in the process of issuing an initial public offering (IPO), the company did not want any irregularities to come to light. But, again, the irregularities he is talking about are vague. We cannot conclude that, contrary to what the Indiana courts have repeatedly said, they would now decide—especially based on the facts before us—that whistle-blowing is an exception to the employment-at-will doctrine. That they would not is clear from Campbell v. Eli Lilly & Co., 413 N.E.2d 1054 (Ind.App. 1980). In that case the court rejected a claim by an employee who was terminated after complaining to allowing an exception to the employment-at-will doctrine for whistle-blowers. But that view did not carry the day. At this time, whistle-blowing simply does not form the basis for an exception to Indiana’s employment-at-will doctrine.
Obviously, the Rule will impact qui tam claims in the future and may have an impact on the claim filed by the Rigsby sisters. The requirements of federal contracts trickle down to subcontractors - indicating the adjusting and engineering firms used by State Farm and other insurers would be subject to these requirements."
Oh, remember the Rigsbys? provides a link to the Alabama decision, but Slabbed has the more interesting post for my purposes:Two former insurance adjusters for State Farm will stand trial before a federal judge who earlier this week determined they breached employment contracts when they copied thousands of insurance records in an attempt to prove policyholders were being cheated after Hurricane Katrina.
The two, Ocean Springs sisters Cori and Kerri Rigsby, adjusted State Farm claims for their employer, independent adjusting firm E.A. Renfroe of Alabama. Renfroe sued them in 2006, alleging breach of contract and violation of the Alabama Trade Secrets Act.
U.S. District Judge William M. Acker Jr. dismissed the trade secrets claim, saying Renfroe failed to prove the documents taken by the Rigsbys involved trade secrets because claims adjustment is fairly standard in the industry, Renfroe did not own the documents and the Alabama act does not apply in Mississippi.
***The Mississippi Insurance Department has concluded in an examination of State Farm released earlier this week that the documents contained no "smoking guns" pointing to fraud.
The Rigsby continue to pursue a whistle-blower lawsuit filed in Mississippi's Southern District against State Farm, Renfroe and other insurance vendors. They claim in the federal False Claims Act case that State Farm used biased experts to overcharge the National Flood Insurance Program for Katrina's water damage so the company could minimize payments for wind damage.
The Rigsbys would share in any proceeds recovered in the lawsuit. State Farm admits mistakes were made during claims adjustments after the massive disaster but has denied any intentional wrongdoing.
Two thoughts for whistleblowers: 1) employers can sue if you violate laws while trying to get the material to support your whistleblower case, and 2) you take the chance that you will recover enough from the whistleblower suit to offset any losses from the employer's lawsuit.If there is a screaming lesson for our readers here, it would be that if you see your employer breaking the law or defrauding the government it would LOOK THE OTHER WAY AND SAY NOTHING. It is very clear form the government’s actions here the Feds do not want to know if big business is stealing from them.
"Yesterday, Joe Davidson, wrote a great article Groups Seek Whistle-Blower Protection in Bailout Legislation for the Washington Post summing up how important it is for Whistleblower Protection to be considered in this bailout legislation. A letter from 40 organizations was sent to several Senate Committees urging members to include key whistleblower protection in the bailout legislation. This could be a coup for whistleblowers if the language on whistleblower protections are included in the bailout legislation."
***
I encourage to read the blog post by Dylan Blaylock and Axel V. Sabersky of the GAP - All things Whistleblower Blog. They give some interesting Commentary on the subject matter of Whistleblower legislation and the bailout proposal. According to Axel, "All new laws proposed by Congress lack provisions to guarantee jury trials to whistleblowers, which is a protected right written in Amendment VII of the Constitution". It is a sad day, when our rights to a trial are taken away from us, especially in issues relating to fraud against our government... I hope that the American Public wakes up and let their voice be heard, that whistleblower protections are critical. Especially, if we want to hold corporations, Government Agencies and individuals accountable.
"Regenerations, an Indianapolis nonprofit, started out small in 2005. That first year, it reported providing psychotherapy for 20 disabled people on a $30,000 budget.
But Varnador K. Sutton had grander plans for his nonprofit.
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Over the next two years, a bogus Medicaid billing scheme netted more than $3 million in taxpayer money for Regenerations, which prosecutors said was nothing more than a shell. As that cash streamed in, Sutton made seven-figure investments and real estate deals, and bought a 2007 Lincoln MKX and 2006 Jaguar.A federal judge this week gave Sutton a 10-year prison sentence for health-care fraud. Authorities said they have seized the cars, property and bank accounts worth more than $2 million. That gives Sutton a start on paying nearly $3.3 million in restitution to the state Medicaid program.
Until a Medicaid recipient called a hotline about suspicious activity involving Regenerations, the firm flooded Indiana's Medicaid program with claims. Sutton, who had worked for the state, submitted bills for 84,000 counseling sessions on behalf of 2,500 Medicaid recipients.
"A new column in Legal Times underscores why Congress should finish up its bill on whistleblower protections. Legislation has passed in the House and Senate, but now needs to be reconciled before being sent to President Bush, who has already threatened a veto."
The article highlights why so many whistleblower lawsuits are doomed to die a slow and painful death. After taking their claims before administrative judges at the Merit Systems Protection Board (MSPB), where they almost never win their cases, whistleblowers are often forced to appeal to the U.S. Circuit Court of Appeals for the Federal Circuit. That is exactly what happened to the former Chief of the U.S. Park Police, Teresa Chambers, who appealed her case to the Federal Circuit following a ridiculous ruling by MSBP which denied Chambers whistleblower protections. Her case illustrates how patriotic truth-tellers can end up in a never-ending churn of legal contortions. Chambers was notified she would be removed from her position in December 2003, and today, in early 2008, there is still no legal resolution in her case. Although she prevailed before the Federal Circuit, her "reward" is that she is now forced to go back to the incompetent MSPB for yet another hearing of her case.
Six Indianapolis-area nurses filed a whistleblowing and racial discrimination lawsuit today against Corrections Corporation of America, which operates Marion County Jail #2 in Indianapolis.No mention of whether the plaintiffs filed the case in state or federal court, or any mention of plaintiffs' attorney. I assume that it was a state law filing since the federal qui tam statute puts the initial filing under seal.
The plaintiffs allege they were retaliated against because they complained to CCA supervisors about inmates who were not provided their medication, inmates who were given the wrong medication, and inmates who were given other patients’ medication to save CCA money.
"Federal officials have joined two whistleblowers in alleging that Lockheed Martin Corporation and a group of vendors overcharged the federal government."
***The whistleblower complaint, which preceded Loftis' plea and which the Justice Department has now joined, alleged that Loftis through TMI, a company that sold perishable tools that Lockheed used in manufacturing, caused false claims to be submitted by Lockheed to the Department of Defense from January 1998 to February 2006.
Lockheed is also alleged to be independently liable for TMI's violation of the FCA due to its reckless oversight of TMI.
The lawsuit alleges that Loehr – the beneficial owner of TMI – recklessly failed to carry out her responsibilities as an officer and director of TMI.
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