Thursday, February 20, 2014

"Outside" Whistleblower in Senior Care Industry to Receive $5.7 Million

In a previous post, I reported on a senior care whistleblower case, where a court ruled that a former corporate officer, who was also the in-house counsel, cannot participate in a False Claims Act suit, if the information supporting the claim comes from privileged communications received in his role as an attorney.  The two other former executives of the company, non-lawyers, could have participated as qui tam plaintiffs; however the entire case was dismissed by the court as a sanction for improper disclosure of attorney-client privileged information.

Most whistleblowers are insiders, either current or former employees; however, that is not always true.  The "relator" (that's False-Claim-Act-speak for whistleblower) in a suit brought against RehabCare, Rehab Systems, and Health Systems, Inc. was the CEO of a competitor, Health Dimensions Rehabilitation, Inc., who first heard about a successful use of "referral fees" during a public conference call hosted by RehabCare. 

 "Pride goeth before a fall," as our mothers might say.  In this case, the CEO's research into the referral fees resulted in allegations the fees were intended to generate referrals of clients covered by Medicare and Medicaid, thus giving rise to alleged violations of the federal Anti-Kickback Act.  The defendants denied all allegations. 

In the RehabCare case, which settled earlier this year for a reported $30 million, the whistleblower, Health Dimensions Rehabilitation, Inc. is in line to receive about $5.7 million from the settlement, according to the U.S. Justice Department. 

Penn State Dickinson School of Law is hosting a half-day program examining "Whistleblower Laws in the 21st Century," on March 20, 2014Speakers include both academic scholars and experienced attorneys who have advised or represented parties in False Claims Act cases in health care, including "senior care." 

http://lawprofessors.typepad.com/elder_law/2014/02/false-claim-act-cases-can-an-outsider-be-a-whistleblower-.html

Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare | Permalink

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