QHR 'whistleblowers' have won several times

By COLIN MURPHEY
The company responsible for managing Franklin Foundation Hospital and for hiring certain members of the hospital’s administration has been the target of multiple lawsuits filed by former employees alleging intimidation and retaliation going back to 1998 and as recently as 2010.
Quorum Health Resources (QHR), which has managed FFH for years, has in at least four cases been sued successfully or investigated for attempting to intimidate former employees who were about to “blow the whistle” on alleged wrongdoing on QHR’s part regarding certain management practices at hospitals around the country.
“Whistleblowers” are protected by federal law from their company’s potential actions to persuade them from coming forward with information.
Case #1:
According to court documents filed with the United States Court of Appeals for the Sixth Circuit and an article published by an associate with the law firm of Marshall, Dennehey, Warner, Coleman & Goggins; a firm based in Philadelphia with 54 years of experience in civil defense litigation, former QHR employee Mark Thompson was fired in retaliation for filing a whistleblower or qui tam lawsuit against the company.
The article states, “A former CEO of a hospital prevailed at trial on his whistleblower retaliation claims against his former employer and was awarded $400,644 in back pay, $70,000 in front pay and $30,000 in pain and suffering.
“In addition, the court doubled the plaintiff”s back pay amount. The plaintiff grew concerned over the company’s control of decisions that were normally reserved to hospital boards, including the selection of vendors.
“In addition, the plaintiff responded to an audit questionnaire wherein he indicated that he had suspicions of fraud within the company. The plaintiff was ultimately suspended and terminated.
“Following his termination, the plaintiff initiated a qui tam action that was voluntarily dismissed with prejudice (and the government declined to intervene in the action).
“However, the plaintiff thereafter filed a retaliation claim, and the jury found that plaintiff was terminated in retaliation for engaging in protected activities under the False Claims Act.”
Case #2:
In an article published by an internationally recognized law firm that specializes in whistleblower cases, Phillips and Cohen LLP and also covered by the New York Times, another QHR employee found fraudulent behavior at a hospital in Montana by QHR staff. The case would eventually lead to the largest Medicare fraud investigation in history at that time.
According to information published on the firm’s website, “James F. Alderson, a client of Phillips & Cohen, was a financial officer with a Montana hospital when he was told that the hospital’s management company routinely filed fraudulent cost reports with Medicare.
“He was fired after he refused to file ‘aggressive’ claims that the company knew were not reimbursable. His False Claims Act lawsuit against that company — Quorum Health Resources Inc. — and HCA (then known as Columbia/HCA Healthcare Corp.) helped lead to the largest government investigation of Medicare fraud ever.
“Quorum paid $85.7 million to settle the whistleblower lawsuit in 2001. A judge awarded Alderson 24 percent of the recovery. HCA later paid $631 million to settle three qui tam lawsuits, including Alderson’s and one brought by John Schilling, another whistleblower represented by Phillips & Cohen. Alderson and Schilling shared a $100 million award for their efforts and the work of their attorneys on the case.”
Below is an excerpt from a story about Alderson by Kurt Eichenwald that appeared in The New York Times on Oct. 18, 1998.
“The filing of his (Alderson’s) lawsuit — known as a qui tam, or false claims, case — was the flash point for an almost six-year legal battle, one that led to criminal and civil investigations that have rocked the entire hospital industry.
“Those efforts culminated this month with the unsealing of Mr. Alderson’s lawsuit and the announcement by the government that it was joining him as a plaintiff against the Columbia/HCA Healthcare Corporation and the Quorum Health Group — the corporate defendants that emerged from years of industry consolidation.
“Here, a discovery made by one man at a small rural hospital ultimately unraveled a nationwide, systemwide scheme,” Stephen Meagher, a former prosecutor [now with Phillips & Cohen LLP] who was eventually hired by Mr. Alderson to handle the case. “It shows how one person can truly make a difference.”
Case #3:
After QHR management was accused of mishandling the finances of a small, rural hospital in Georgia, it was discovered by a reporter with the Wall Street Journal in 1998 that there was much more to the story.
In addition to reporting details about the lawsuit filed by the Emanuel County Hospital Authority, the entity that owned the not-for-profit hospital in Swainsboro, Georgia, the story revealed further details about just how far the corruption regarding QHR’s corporate practices had gone and the active role the federal government was about to play in holding the company accountable.
The WSJ article stated, “In October, the U.S. Justice Department said it had joined a whistleblower lawsuit against Quorum, alleging Medicare fraud stretching back 14 years and involving more than 200 hospitals in 37 states.”
Case #4:
According to an article published on the U.S. Department of Justice’s website in 2000, “Quorum Health Group, Inc. of Brentwood, Tennessee and its subsidiary QHG of Alabama, Inc. d/b/a Flowers Hospital of Dothan, Alabama have agreed to pay $18 million to settle claims that they defrauded the Medicare Program from 1988 to 1998, the Justice Department announced today.
“The civil settlement resolves allegations that Quorum and Flowers Hospital defrauded Medicare by 1) improperly shifting costs to Home Care Services (HCS), a home health agency owned by Quorum and Flowers Hospital and 2) improperly charging Medicare, through HCS, for unallowable costs. ‘This settlement again demonstrates the United States’ commitment to protecting federal funds from fraud and abuse,’ said David W. Ogden, Assistant Attorney General in charge of the Civil Division. ‘The federal health care system operates on the good faith and honesty of its providers, and we cannot tolerate misuse of the Reimbursement system for financial gain.’
“These allegations arose from a lawsuit filed by William J. Menke, the former Chief Operational Officer and Executive Vice President for External Activities of Flowers Hospital and HCS, under the qui tam or whistleblower provisions of the False Claims Act, a federal law that allows private individuals to sue on behalf of the United States. The lawsuit was unsealed in Birmingham, Alabama.”
Reached for comment by the Banner-Tribune, FFH Director of Marketing and Business Development Dawn Kaiser-Melancon stated that FFH interim CEO and QHR employee Craig Cudworth was not authorized to provide comments or statements on behalf of QHR. Attempts in the past to reach QHR for comment by the Banner-Tribune have been unsuccessful.