By blowing the whistle on itself, one of Chicago’s largest hospitals saved a bundle on its fraud settlement with the federal government.
Rush-Presbyterian St. Luke’s Medical Center used a 1999 ruling by the 7th U.S. Circuit Court of Appeals in Chicago to avoid paying an even heftier settlement than the $800,000 agreement it announced last week with the U.S. attorney’s office.
Because Rush executives voluntarily notified the U.S. attorney’s office in May 1999 of improperly billing Medicaid and Medicare for physician transplant services, the West Side hospital avoided a much costlier settlement from claims filed by a whistle-blower in September 1999.
The 7th Circuit, in the 1999 case of Mathews vs. Bank of Farmington, said cases publicly disclosed to government investigators before a whistle-blower’s action can’t result in a claim for the whistle blower.
Increasingly, whistle-blowers are guiding government lawyers to dozens of multimillion-dollar settlements each year from health-care providers, which typically pay treble damages in such cases, industry analysts say.
“This means that if someone comes forward with a voluntary disclosure, the maximum amount is double the damages,” said Assistant U.S. Attorney Linda Wawzenski. “If someone makes a voluntary disclosure like Rush did …, that counts as a public disclosure and the (whistle-blower) is out.”
Federal law allows whistle-blowers to earn a percentage of any settlement.
Although whistle-blower suits often lead federal investigators to find fraud they wouldn’t normally know about, legal experts say the Bank of Farmington case may trigger health facilities to come forward on their own.
“We have saved an enormous amount of money,” said Rush’s attorney, Sheldon Zenner of Chicago firm Katten Muchin Zavis. “We are a good example of why you should come forward.”
Hearty intervention: Although the Illinois legislature last year curbed powers of the Illinois Health Facilities Planning Board, the board’s chairman, Pam Taylor, appears interested in expanding the regulator’s authority over morecardiac procedures.
Taylor last week led the charge to deny Provena St. Mary’s Hospital in Kankakee the authority to perform interventional cardiac catheterization procedures, which open blocked arteries. St. Mary’s was seeking the service just two years after the board denied its application to perform open-heart surgeries.
This time, Taylor’s opposition baffled St. Mary’s executives, because the hospital provides diagnostic catheterization procedures, and state rules don’t differentiate between the “types of cath that can be performed” under such permits, the planning board’s own staff report said.
When St. Mary’s won a permit to establish diagnostic catheterization services in 1999, executives agreed to come back before the board if any changes were made–even though state rules don’t differentiate.
Furthermore, several Chicago-area hospitals without open-heart programs didn’t have to ask the board to operate interventional catheterization services.
St. Mary’s also had assured the board that its patients in need of heart surgery could be referred in two minutes to nearby Riverside Medical Center in Kankakee.
But St. Mary’s couldn’t overcome Taylor’s opposition, even though only three other of the 15 board members supported her crusade. St. Mary’s garnered seven of the eight necessary votes needed for passage. Three members were absent for the vote and one seat is vacant.
Taylor may see problems with other hospital catheterization programs after expressing concerns about facilities “out there doing (interventional cardiac procedures) illegally.”
United sued: United HealthCare of Illinois Inc.’s contractual battles with medical-care providers appear to be escalating.
Less than a month after Rush-Presbyterian St. Luke’s Medical Center and four affiliate hospitals terminated a contract with United, a network of physicians has sued Chicago’s second-largest managed-care plan over various payment issues. United HealthCare is a subsidiary of Minneapolis-based UnitedHealth Group.
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In a suit filed this month in Cook County Circuit Court, Unified Physicians Network Inc. of Lincolnwood alleges United failed to pay more than $550,000 owed the doctors group.
United wouldn’t comment about the lawsuit..
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