UM medical exec fired by Shalala turns a corner in his lawsuit
Jonathan Lord, the fired chief operating officer of UM’s medical program, is heading to trial now that a federal judge denied the university’s motion to throw out his wrongful termination case.
A high-stakes trial is shaping up between a former University of Miami medical executive and the school over allegations that then-President Donna Shalala fired him in retaliation for his efforts to investigate suspected Medicare fraud in a prominent organ transplant program.
Jonathan Lord, the former chief operating officer of UM’s medical program nearly a decade ago, turned a corner this week against the university when a federal judge denied its motion to throw out his wrongful termination lawsuit.
U.S. District Judge Cecilia Altonaga found that for now, “the many facts alleged by [Lord] plausibly suggest that [his] firing was retaliatory.”
“Shalala’s knowledge of the ongoing investigation [of Medicare fraud] and the timing of [Lord’s] abrupt firing plausibly suggest that [Lord’s] remedial efforts caused his termination,” Altonaga wrote in a 29-page decision.
The judge’s order will now pave the way for an examination of the evidence by the two sides, including critical depositions of Lord and Shalala, and then for a jury trial in Miami federal court. Lord, who court documents show had received raises and praise from the medical school dean before his firing, stands to collect millions of dollars in lost income from UM if he wins his case.
The university’s lawyer says it is gearing up for the showdown in court.
“We will be moving forward with discovery and defending the case through trial,” UM’s attorney, Eric Isicoff said Thursday.
Shalala, who was elected to Congress after leaving the UM presidency in 2015, is not named as a defendant with the university in Lord’s case. She did not respond to a request for comment.
In the school’s dismissal motion, UM argued that Shalala did not retaliate against Lord when she fired him and therefore he was not legally protected under the antiretaliation provision of the False Claims Act. Isicoff argued that the former UM president and others in the school’s
Lord
hierarchy were unaware that Lord, as the medical program’s lead compliance officer, “was engaging in whistle-blowing efforts rather than simply doing his job,” according to the judge’s analysis in her order.
Lord, who also served as UM’s vice president for medical administration and chief compliance officer, was making about $914,000 a year when he was fired by Shalala in January 2013. Lord says he was pushed out after less than a year as COO because he uncovered inflated Medicare claims for transplant testing services in the surgery department and approved an independent audit of its questionable billing activity, according to the suit filed by his lawyers, Jeffrey Sloman and Erica Perdomo.
Lord claims Shalala ordered his firing after he informed her, UM medical school dean Pascal Goldschmidt and the board of trustees that the surgery department was billing the federal Medicare insurance program for unnecessary organ transplant tests at Jackson Memorial Hospital. UM’s medical school has a joint operating agreement with the publicly owned teaching hospital.
Lord, who attended UM as both an undergraduate and medical student before specializing in pathology and administration, filed the wrongful termination suit following his successful whistle-blower case against the university. In May, the Coral Gables university settled the False Claims Act case by paying $22 million to the federal government, with half of that total going to the taxpayerfunded Medicare program for the elderly and disabled. The university also paid the state of Florida about $325,000 under the terms, with half of that amount going to the Medicaid program for the indigent.
UM’s settlement with the Justice Department, which intervened on Lord’s behalf in the whistle-blower case, resolved allegations of fraudulent billing practices in the surgery department’s transplant testing lab and excessive doctors’ fees .charged to patients at clinics who were not notified of the higher costs, according to the agreement.
Jackson Memorial Hospital, which has an agreement with UM’s medical school to provide doctors and other services including organ transplant lab tests, also agreed to pay $1.1 million to the federal government, according to the settlement.
Lord, who filed his whistle-blower suit in 2013, received about $4 million of the settlement as a reward for initiating it against his former employer.
One legal observer, who has been involved in defending False Claims Act healthcare cases, said the fact that Lord’s lawsuit follows a comprehensive investigation by the federal government means his complaint against UM is supported by more than mere allegations.
“A civil lawsuit that follows a federal investigation, especially one that led to a substantial settlement, has a head start on developing the evidence needed to prove the case,” said Miami attorney Joseph DeMaria.
In March 2012, Lord was hired as the chief operating officer of UHealth, the hospital and clinical network of the
Leonard M. Miller School of Medicine. At the time Lord raised the Medicare billing problem internally, UM was struggling with massive debt after undertaking an ambitious transformation of the medical school into a sprawling academic healthcare system under Shalala.
Internal correspondence filed with Lord’s suit shows that the chief operating officer was making progress and gaining promotions in short order — tasked with multiple responsibilities, including budgets, union negotiations, the joint operating agreement with Jackson Memorial Hospital, organizing medical departments and ensuring compliance with Medicare and Medicaid policies.
But Lord and the medical school dean, Goldschmidt, also had to wrestle with increasing debts, which triggered layoffs of about 900 full-time and part-time workers in May 2012. In turn, many doctors on UM’s faculty called for the ouster of Goldschmidt and Lord.
The following month, Lord learned about escalating friction between UM’s surgery and pathology departments over organ lab testing for the transplant institute at Jackson Memorial Hospital. The surgery department, run by longtime UM cancer surgeon Alan LIvingstone, had taken over the transplant testing services years earlier from the pathology department and moved them from Jackson Memorial to the university’s nearby medical school. The two departments engaged in a turf battle and argued over the number of transplant lab tests for patients and who should oversee them, according to internal emails and documents reviewed by the Miami Herald.
Lord and Goldschmidt discussed conducting an independent audit of the surgery department’s organ testing services and replacing Livingstone as the Miami Transplant Institute’s director at Jackson Memorial, according to new details of the power struggle included in Lord’s suit.
As the university’s chief operating and compliance officer, Lord ordered an external audit with support from the medical school’s dean, Goldschmidt, as well as UM’s president, Shalala. In October 2012, the consulting firm Transplant Management Group (TMG) was hired to conduct the outside audit.
Livingstone complained about the TMG audit to UM’s chief medical compliance officer who answered to Lord, according to his suit.
In early December
2012, TMG issued a preliminary report, finding that the surgery department’s organ testing lab “participated in duplicative billing” to Medicare; “engaged in inappropriate, unnecessary, and redundant testing”; performed many “routine” laboratory tests on [Jackson Memorial] patients when [Jackson] “offered identical services at a much lower cost,” according to Lord’s suit.
Concerned that his surgery department might lose the transplant lab testing services along with millions of dollars in revenue, Livingstone continued to pressure Shalala to end the outside audit, the suit says.
In December 2012, as tension rose among UM’s top doctors, Shalala shut down the external audit of the surgery department’s organ transplant testing and its Medicare billing practices. Instead, UM hired a law firm, Hogan Lovells, and another outside auditor to do the probe. The following year, the university agreed to reimburse $356,000 to Medicare regarding disputed bills for transplant lab tests by UM’s surgery department, records show.
According to the suit, Livingstone persuaded Shalala to terminate Lord. His suit claims “President Shalala, upon the advice and urging of Dr. Livingstone, terminated Dr.
Lord from all positions at UM to avoid the dissemination of the TMG findings identified in the
TMG Report.”
In a phone call on New Year’s Eve in 2012, Goldschmidt told Lord that Shalala was firing him, the suit says. Lord claims he was formally terminated “without notice or warning related to any issues” about his performance.
Jay Weaver: 305-376-3446, @jayhweaver