The U.S. Justice Department has unsealed the remaining whistleblower lawsuits filed against HCA-The Healthcare Co. and its predecessor companies.
In late December the Justice Department revealed that a total of 30 whistleblower lawsuits -- three more than previously announced -- had been filed against Nashville-based HCA. The government unsealed 17 suits that were previously unknown to the public but declined to say how many of them it has joined.
The unsealing paves the way for dividing the $745 million civil settlement and resolving the remaining civil whistleblower allegations of Medicare cost-reporting fraud and physician kickbacks for patient referrals. The cases are consolidated in multidistrict litigation in the Washington federal court of U.S. District Judge Royce Lambreth.
Of the $745 million settlement:
* $403 million, or 54%, will go to settle allegations of DRG upcoding. New Hope, Pa., software entrepreneur Richard Newbold, M.D., whose allegations of DRG upcoding in pneumonia diagnoses led to the largest of the whistleblower suits the government joined, could be a big winner.
* $95 million, or 12.8%, will go to settle allegations of outpatient laboratory billing fraud against HCA predecessor HealthTrust. Utah emergency room physicians Robert Rothfeder and Dennis Wyman will share the recovery.
* $246 million or 33%, will go to settle allegations in three categories of home healthcare billing and cost-reporting fraud. Former HCA reimbursement supervisor John Schilling and former Olsten Corp. Vice President Donald McLendon are among a group of whistleblowers who will share the recovery.
Negotiations continue between the Justice Department and HCA to resolve the remaining allegations.
"Procedurally, this will make things easier," said Stephen Meagher, a San Francisco attorney whose firm, Phillips & Cohen, represents four whistleblowers with cases against HCA. "The underbrush will be cleared. Some (cases) will be dismissed, and those that remain will be pulled out in stark relief against the issues that remain."
Meagher said unsealing the remaining whistleblower suits strengthens the hand of the Justice Department and the remaining whistleblowers and makes it more difficult for HCA to feign innocence.
"It's not a bad position to be in -- litigating a civil case against somebody who's already admitted criminal violations in the same issues you're litigating on," he said, in reference to a $95 million criminal fine against two nonoperating HCA subsidiaries (Dec. 18-25, 2000, p. 3). "The only question is whether it will go to litigation."
HCA spokesman Jeffrey Prescott said the company disagrees and views the Medicare cost-reporting fraud and kickback criminal pleas as separate issues.