Hospital executives worried about current or former employees becoming whistle-blowers in federal fraud lawsuits may be misdirecting their paranoia. One of the key whistle-blowers in the federal lawsuit against both Tenet Healthcare Corp. and the St. Barnabas Health Care System allegedly has no direct connection to either defendant.
That someone from outside the healthcare industry could successfully file a billion-dollar fraud lawsuit should make hospital executives take notice, said Chicago whistle-blower attorney Steven Cohen. "Whistle-blowers come in all shapes and sizes and from all places,'' Cohen said.
"It need not be somebody situated within the inner sanctum of the C-suite,'' he added. "It could be an outsider who stumbles upon the information or a provider's consultant or professional adviser. Anyone can be a whistle-blower, as long as that person who finds the information performs the due diligence and has the wherewithal to help the government ferret out fraud. And nobody's safe from a ghost whistle-blower.''
The mysterious whistle-blower in the Tenet and St. Barnabas cases is Peter Salvatori, a 35-year-old casket salesman living in Scranton, Pa. Salvatori is listed as one of the plaintiffs in the Tenet lawsuit, which was filed in 2002 in U.S. District Court in Philadelphia. Salvatori also is listed as one of the plaintiffs in the St. Barnabas case, which also was filed the same year in the same court. In both cases the government joined the lawsuit, alleging the hospital systems inflated their cost-to-charge ratios to trigger higher Medicare outlier payments.
Tenet, the Dallas-based for-profit chain, settled its case in June for $900 million$788 million of which was attributed to outlier payment issues (June 19, p. 4).
St. Barnabas, the nine-hospital, not-for-profit system based in West Orange, N.J., agreed to pay $265 million to settle its case two weeks earlier. Both settled without admitting wrongdoing.
Salvatori now is selling coffins at his family's Northeast Casket Sales in Scranton, according to family members. He previously sold cable television and was selling used cars in Baltimore when the lawsuit was filed in 2002, according to sources close to the case. He did not return repeated phone calls seeking comment on his connection to Tenet or St. Barnabas or the source of his knowledge about Medicare billing. Salvatori's co-plaintiff in the Tenet case is Sara Iveson, the executive director of a public hospital, Barnes-Kasson County Hospital in Susquehanna, Pa. Iveson did not return multiple phone calls seeking comment.
Iveson and Salvatori stand to split a combined whistle-blower's fee from the total Tenet and St. Barnabas recovery that could approach $200 million. From the St. Barnabas settlement alone they and a third whistle-blower will split $45 million, but the Tenet whistle-blower recovery has not yet been completed.
Attorney John Riley of the Philadelphia law firm Vaira & Riley, who represents both Salvatori and Iveson, described his clients as "legitimate and qualified'' whistle-blowers. Riley said his clients won't comment because much of the lawsuit that included Tenet and St. Barnabas, as well as an unknown number of still unidentified hospitals, is barred from public inspection.
Salvatori is married to Amy Foley, the daughter of John Foley, a veteran healthcare financial consultant and managing director of the healthcare practice for the Harrisburg, Pa.-based audit and consulting firm, Parente Randolph. Parente Randolph performs the audits for Iveson's hospital.
Foley denied any connection to the lawsuit. "I am not involved at all. I'm not advising him (Salvatori), didn't gather any information for him and will not receive any money from this,'' Foley said. Robert Ciaruffoli, chairman and chief executive officer of Parente Randolph, said he knew nothing of the whistle-blower lawsuit and confirmed that Parente Randolph did not contract with St. Barnabas or Tenet.
A St. Barnabas spokeswoman said the system had no information on Salvatori's background, and a Tenet spokesman declined to comment on the matter, except to say that Tenet has no record of Salvatori or Iveson working for the company or its hospitals.