Eager to tell its side of the story, Quorum Health Group beat by more than a week its deadline to respond in federal court to a whistleblower fraud lawsuit. The hospital chain told the court, the U.S. Justice Department and the public that it has done nothing illegal.
In a lengthy brief filed April 15 in U.S. District Court in Tampa, Fla., Quorum used some standard arguments and at least one innovative one to contest the lawsuit's allegation that the company engaged in widespread Medicare fraud. The brief was due April 26 (See cover story, p. 56).
The Brentwood, Tenn.-based company also filed several motions, including one to dismiss the case and another to invalidate the whistleblower's allegations, as they don't stem from original information he collected.
Quorum's brief and motions totaled more than 100 pages. No trial date has been set pending a mediation proceeding.
The lawsuit, first filed under seal by a whistleblower in 1993, was unsealed and joined by the federal government last October. The case alleges Quorum and its subsidiaries engaged in a scheme to defraud Medicare and other federal healthcare programs by as much as $70 million and created reserve cost reports documenting padded Medicare claims submitted to fiscal intermediaries.
"There is nothing inherently fraudulent, there is nothing fraudulent at all about keeping a reserve work paper," said Charles Work, Quorum's attorney. "This is not a scheme to defraud the government; this is an ordinary, routine accounting practice."
Quorum argues the case should be dismissed because the company did not know the specifics of the lawsuit until the government jumped on board, almost six years after the whistleblower filed the lawsuit.
A motion asks the court to start counting backwards on the six-year federal False Claims Act statute of limitations from the time the government filed its most recent complaint, on Feb. 24, or from when the case was unsealed in October 1998-not from when the whistleblower filed it. That interpretation would knock out most of the case, because much of what is cited in the complaint happened before 1992, Work said.
"That's a somewhat novel argument," said Marc Raspanti, an attorney who has represented healthcare whistleblowers and a partner with Miller Alfano & Raspanti, a Philadelphia law firm. "If the defendants were to argue that, I think it would eliminate the stated intent of Congress to allow the government to pursue its investigation under seal without the knowledge of the defendant."