Like many whistleblowers, James Alderson led a double life.
Bound by the secrecy of filing a sealed lawsuit, Alderson, 53, an accountant and married father of two, traveled at night to meet with government lawyers, fibbed about his destinations to friends, relatives and co-workers and went deeply into debt to pay the escalating costs of the whistleblower lawsuit he filed in 1993 against Columbia/HCA Healthcare Corp., Healthtrust-the Hospital Co., and Quorum Health Resources.
Although Alderson's employment at a Quorum-owned hospital led to his lawsuit against Quorum, he claimed the company had learned aggressive accounting methods from its parent HCA, which is now part of Columbia. So he also sued Columbia and another HCA spinoff, Healthtrust.
"One of the hardest parts was keeping it a secret," Alderson says. The only people who knew about the suit were his immediate family members. "Until the seal broke and the government intervened (in fall 1998), even my neighbors didn't know about it- till they saw it on `60 Minutes.' "
The personal toll. Alderson feared that filing the suit could blackball him within the industry. And while he thought physical harm and retaliation were unlikely, that possibility weighed heavily on his wife.
He has paid a physical price for his actions. His hypertension and cholesterol have worsened.
But Alderson says he has no regrets.
He first received national recognition shortly after his suit was unsealed Oct. 5, 1998. Within weeks the New York Times and "60 Minutes" had told his story.
He says one month after Quorum began operating the hospital where he worked-North Valley Hospital in Whitefish, Mont.-Quorum Health Resources Vice President Clyde Eder told him the company routinely prepared dual sets of Medicare cost reports. One was "aggressively billed" and sent to the local HCFA fiscal intermediary for submission to Medicare. The second, which included claims the company thought could be questioned, was kept for the company's records and was not shared with Medicare agencies.
"I was so appalled that I just shot from the hip," Alderson remembers. "I said, `I've never done two tax returns, and I'm not doing two cost reports.' It sounded too much like fraud."
Nine days later, during a Quorum meeting in Alaska, Eder fired Alderson.
"They said things weren't working out and it looked like I wasn't going to be a team player," Alderson recalls.
In 1991 he filed a wrongful discharge suit, which was settled in 1993 for an amount he and Quorum declined to disclose.
In exile. After the case was settled, Alderson remained upset. He had to commute to a Montana town 300 miles away to work, eventually uprooting his family from Whitefish, where he had lived for 17 years and was Rotary Club president-elect.
"I knew there was only one hospital job for me (in Whitefish), and I knew (the situation) would require a move from our hometown. It was tough on the whole family."
From the end of 1990 to 1995 the Aldersons lived in Dillon, Mont., an isolated town of 4,000. There he served as director of finance at 22-bed Barrett Memorial Hospital. After leaving, he filled a one-year position at a Catholic hospital in 1996.
Alderson then took a consulting job in Boise, Idaho, but that company closed in 1997, and he was unemployed for five months.
Alderson and his lawyer subpoenaed Medicare cost reports for nine Quorum hospitals in the Northwest as evidence in his wrongful discharge suit.
"I wanted to find out what this was all about and if my refusal to (create duplicate cost reports) was that big of a deal. I was trying to figure out what they meant by this aggressive cost report."
He remembers that when he received the documents, he said, "Ah ha!" because the reports confirmed his belief that something wasn't right.
A former hospital administrator told him about whistleblower lawsuits.
"I got hold of those cases and researched them and other False Claims Act cases. I think I read about every one," he says. "I had never been in a lawsuit before, never even a party to one. Now I was involved in two."
He drafted his whistleblower complaint without help from a lawyer and filed it in early 1993 in federal court in Butte, Mont., 65 miles away.
Finally, in August, the U.S. Justice Department invited him to meet with government lawyers in Washington for a day. Alderson and the lawyers pored over hundreds of Quorum cost reports.
"They showed us the papers they'd subpoenaed. This was 1993. There had never been any cost report cases taken before, and they didn't know what to do with them," Alderson says. "But when they saw `Confidential-Do not disclose or release to Medicare auditors' rubber-stamped on documents, they knew that they had a pretty good smoking gun."
In 1995 Alderson hired whistleblower specialist Stephen Meagher at Phillips & Cohen in San Francisco. The U.S. attorney for Montana had little experience with healthcare whistleblower suits, so Alderson's lawyers moved the lawsuit into federal court in Tampa, Fla.
Dissenting views. Columbia spokesman Jeff Prescott says his company chooses not to discuss allegations in the whistleblower suits. "The only response we've made is that keeping reserve cost reports is an established accounting practice," he says.
Shea Davis, a spokeswoman for Brentwood, Tenn.-based Quorum, also denies wrongdoing by her company. She says Alderson never completed a cost report for Quorum, nor did the company profit from the behavior alleged in the cost report.
"We continue to defend ourselves and are nowhere near making a settlement," Davis says. "(It's) a real shame that the False Claims Act was never intended to be what it has come to be. We believe it's been hijacked by plaintiffs' attorneys."
Alderson now travels from his home in Vancouver, Wash., to do financial consulting for three western Oregon hospitals while awaiting the conclusion of his legal efforts.
"I just really thought what they were doing was wrong, dead wrong," Alderson concludes. "I always said if I ever found out it wasn't wrong, I would quit. But nobody ever took me up on it."