On September 9, 2020, the U.S. Department of Justice announced a $50 million settlement with Wheeling Hospital, Inc., after a former Executive Vice President blew the whistle on an illegal self-referral scheme that had run from 2007 to 2020 under the hospital’s previous management. For his information and cooperation, Louis Longo, the whistleblower, will receive $10 million.
Self-referral is a process by which a physician sends a patient for services, such as diagnostic tests, for which the physician receives some additional compensation. Self-referral creates a conflict of interest where the best interests of the patient are often overlooked. Self-referral schemes treat innocent patients as pawns to run up insurance bills and unjustly enrich physicians and healthcare facilities. This variety of healthcare fraud violates the Physician Self-Referral Law and the Anti-Kickback Statute. But when a self-referral scheme targets government programs, such as Medicare or Medicaid, it also triggers the federal False Claims Act.
With healthcare fraud being so rampant, it’s important to understand the False Claims Act, which is a powerful tool to combat this abuse. FCA allows a whistleblower with unique, nonpublic information about fraud against a government agency to file a qui tam action, meaning he or she is suing on behalf of the government. If the case results in a recovery for the government, the whistleblower is entitled to a sizeable share of the recovery, from 15 to 30 percent. In this case, Mr. Longo received 20 percent.
But more important than the money is patient protection. Jeffrey Bossert Clark, Acting Assistant Attorney General of the U.S. Department of Justice Civil Division said, "Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided." Thus “improper inducements …can corrupt the integrity of physician decision-making."
The Department of Justice intervened in Mr. Longo’s suit, meaning they took over investigation and prosecution, eventually arriving at the settlement. The DOJ had alleged that over the course of 13 years, hospital management had directed and controlled the scheme. In so doing, they “knowingly and willfully” paid improper compensation to referring physicians “based on the volume or value of the physicians’ referrals.” Physician compensation was also shown to have been way above market value, including annual salaries in excess of $1 million.
Patients enrolled in Medicaid and Medicare, who already tend to be at greater risk for poor health outcomes, were placed in jeopardy. Maureen R. Dixon, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General, noted that this type of corruption “can interfere with medical decision-making and undermine the public’s trust in the health care system."
Mr. Longo had tried to raise concerns about the fraud, CEO Ronald Violi fired him. But ultimately, the lawsuit prompted Wheeling Hospital to dump Violi and R&V Associates, the firm that had been managing the facility, and sign a management agreement with WVU Health System.
Healthcare fraud wastes financial resources and causes patients undue hardship. If you have knowledge of a healthcare fraud scheme, you can take a stand against injustice and claim a substantial reward. A knowledgeable whistleblower attorney at Halperin Bikel can provide the advice and advocacy you need to present a compelling case and maximize your potential reward.