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Whistleblower Lawsuit Pays Off – Big Time – After Seven Years

— December 26, 2017

Whistleblower Lawsuit Pays Off – Big Time – After Seven Years

Tuesday marked the end of a whistleblower lawsuit filed seven years ago by two Charlotte-area doctors, Thomas Mason and Steve Folstad, who worked in the emergency departments of Iredell County hospitals.  Emergency room groups are set to offer federal and state governments more than $33 million to avoid going to court over long-standing allegations of Medicaid and Medicare fraud conspiracy, proving that patience and persistence pays off.

Under the settlement, EmCare, a Dallas-based subsidiary of Envision, which at one time had more than 500 contracts offering ER doctors to hospitals, will pay $29.6 million. Envision said that with interest, the total it will pay to resolve the investigation will be $31 million.

According to federal prosecutors, EmCare physicians took kickbacks from Health Management Associates (HMA), which has since folded, to recommend that their patients be admitted to HMA hospitals rather than receive outpatient care.  Once the patients were admitted, the physicians would order expensive and unnecessary testing, which enabled the hospitals to receive higher Medicare and Medicaid reimbursements.  Medicare, in general, pays at least three times as much for inpatient treatment as outpatient care.

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Health Management Associates made EmCare’s contracts with its hospitals contingent on the group’s success in increasing the number of patients admitted to its ERs.  The settlement was filed under the False Claims Act, which allows whistleblowers to sue companies on the government’s behalf to recover taxpayer money paid out based on fraudulent claims.  It covers a four-year period between 2008 and 2012.

In 2014, HMA paid more than $98 million to resolve seven whistleblower lawsuits.  U.S. Attorney Andrew Murray of Charlotte said the kickbacks paid to the company’s physicians compromised “sound medical decision-making.”   Under the terms of their original lawsuit, Mason and Folstad share in the governments’ recovery of money and are set to receive more than $6.2 million.

John G. Martin, JD, an attorney with the law firm Garfunkel Wild in Great Neck, NY., said the False Claims Act proves it pays, big time, to out bad behavior.  The Act makes it more than enticing for medical personnel to report fraud.  “In addition to government watchdogs reviewing your bills, you have to realize that everybody who works in your healthcare practice is a potential government investigator,” Martin said. “Once they learn that if there is anything questionable and they might get rich off of it, they’re all looking for something to investigate.  The idea that if the government is not looking at some policy or practice, you’re OK, that’s no longer valid in the healthcare field.  Everyone is looking at it.”

“This should be a wake up call that the emergency room won’t be the front door to medical fraud,” Philadelphia attorney Pamela Brecht said, applauding Mason and Folstad for standing up to the healthcare giants and fighting for what’s right.

James Wyatt, the doctors’ Charlotte attorney, said Mason and Folstad followed their medical oaths by calling out the companies and bringing to light their misconduct.  “It has been rewarding to represent clients who have so much integrity, stood up in the face of constant pressure and continued to do the right thing for their patients.”


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