The U.S. Justice Department has invited lawyers for 27 individual whistleblowers who have sued HCA-The Healthcare Co. to meet with department officials next month to discuss how to divide the proposed $745 million partial settlement of their civil Medicare fraud lawsuits against the company, MODERN HEALTHCARE has learned.
The three-hour meeting is scheduled for Sept. 8 at the Justice Department offices in Washington.
HCA spokesman Jeffrey Prescott said HCA isn't involved in this phase of the negotiations and declined comment. Justice Department spokesman Charles Miller also declined comment.
The Justice Department sent invitations to the whistleblowers' lawyers in mid-July.
"Because of space considerations," whistleblowers are only permitted to bring one lawyer to the meeting, according to the letter, which was read to MODERN HEALTHCARE by several sources requesting anonymity.
The letter, signed by Joyce Branda, deputy director of the Justice Department's Commercial Fraud Section, lays out what the government will and won't do at the meeting.
Government lawyers will tell whistleblowers, who filed False Claims Act suits against HCA in various federal district courts around the country, how they see the tentative settlement agreement being divided into classes of claims and the potential value of each class.
What Justice Department lawyers won't do is tell the individual whistleblowers what their share of the settlement will be.
Last December, a multidistrict federal judicial panel transferred the suits at the request of HCA and the Justice Department to a Washington federal court, where U.S. District Judge Royce Lambreth will preside if a settlement is not reached. In May HCA announced a tentative settlement of many of those allegations (May 22. p. 2).
The five general categories of allegations contained in the lawsuits, three of which are covered under the proposed settlement, include alleged fraud in:
* Medicare cost reports.
* Home healthcare management.
* DRG upcoding.
* Physician referral/investment arrangements.
* Billing for certain laboratory tests.
The tentative civil settlement is contingent upon the government resolving by Dec. 31 long-anticipated criminal charges against HCA and its executives involving Medicare cost reporting and kickback allegations.
The proposed $745 million settlement will not cover all of the allegations in the civil fraud lawsuits or all of the plaintiff whistleblowers, but all were invited to the Sept. 8 meeting.
A second, separate settlement may cover plaintiffs and allegations, such as Medicare cost reporting fraud and physician investment arrangements, not included in the May proposal.
Former Justice Department official Stuart Gerson of the Washington office of Epstein, Becker & Green, said the plaintiffs' individual shares of the settlement will probably not be discussed at the meeting but deferred to a later date.
"The government will roll up what's going to be in the case and assign values to the classes of allegations," said Gerson, who doesn't represent any whistleblowers or defendants in the case.
It is believed that some of the whistleblower claims will be dismissed because they repeat allegations contained in other suits, were filed after other suits or contain information already publicly disclosed.