From worker to whis­tle-blower

In­form­ers weigh odds of suc­cess with ca­reer loss, chance of no set­tle­ment

Modern Healthcare - - Front Page - Gregg Blesch

As Bruce Moilan took his life on an ir­re­versible new course, he didn’t tell his wife of more than 30 years or their three grown chil­dren. Nor did he, or could he, tell his col­leagues at South Texas Health Sys­tem, the tar­get of his whis­tle-blower law­suit that trig­gered a se­cret, mul­ti­year fed­eral in­ves­ti­ga­tion and ul­ti­mately made him a mil­lion­aire.

Moilan has what would seem to be a suc­cess story to tell. The U.S. Jus­tice Depart­ment re­ported last Oc­to­ber that Moilan was in line to get $5.5 mil­lion of the $27.5 mil­lion his em­ployer agreed to pay the gov­ern­ment to set­tle the case (while adamantly deny­ing any wrong­do­ing). But even though he’s un­wa­ver- ing in por­tray­ing his de­ci­sion as the right one, he has a more con­flicted view of the ex­pe­ri­ence as an in­for­mant and how it ended.

“It’s a lonely sit­u­a­tion for a long pe­riod of time that’s filled with fear,” Moilan says. “I’ve got two mas­ter’s de­grees and two pro­fes­sional li­censes, and I’m un­em­ployed be­cause I chose to do the right thing.”

The set­tle­ment did not make him as wealthy as he sus­pects some might think, with his re­ward pared by his lawyers’ due and fed­eral taxes, and the pos­si­bil­ity of forced re­tire­ment from a well-pay­ing ca­reer at age 59.

The gov­ern­ment, to a large ex­tent, re­lies on whis­tle-blow­ers such as Moilan. They are per­haps the best tool for pro­tect­ing the money Medi­care and Med­i­caid pay for health­care each year (ap­proach­ing $900 bil­lion com­bined). They’re also a po­ten­tial drain on the time and re­sources of ev­ery health­care or­ga­ni­za­tion of any size, re­gard­less of whether the con­cerns are well-founded.

The Jus­tice Depart­ment starts about 250 new False Claims Act cases each year in­volv­ing al­leged mis­ap­pro­pri­a­tion of HHS money. The over­whelm­ing ma­jor­ity are trig­gered by whis­tle-blow­ers, known in the le­gal par­lance as “re­la­tors,” who file law­suits un­der seal to re­cover funds on the gov­ern­ment’s be­half. In 2009, whis­tle-blower law­suits gen­er­ated 85% of the $1.6 bil­lion in health­care dol­lars the gov­ern­ment re­cov­ered from set­tle­ments and judg­ments (a big num­ber that’s still a tiny frac­tion of what’s lost to fraud) and the re­la­tors col­lected nearly $164 mil­lion for their trou­ble.

And it is trou­ble, says Moilan and oth­ers who have been sim­i­larly suc­cess­ful, and they’re quick to point out that the odds of suc­cess should be weighed against the strong pos­si­bil­ity of los­ing a job or even a ca­reer while winning noth­ing in re­turn. The gov­ern­ment is about four times as likely to de­cline to for­mally in­ter­vene in a case, and those who pro­ceed without the gov­ern­ment’s help are far less likely to lead to a set­tle­ment or judg­ment. Even when a case is suc­cess­ful, it’s typ­i­cal that more than half the whistle­blower’s gross share cov­ers le­gal fees and fed­eral in­come tax.

No quick money

“It’s no fun,” says Craig Pa­trick, one of two re­la­tors who jointly filed a law­suit against Kyphon that yielded a $75 mil­lion set­tle­ment with Medtronic, which dur­ing the in­ves­ti­ga­tion ac­quired the maker of spine-surgery kits for $3.9 bil­lion. “If you do it be­cause you think you’re go­ing to get money quickly, you’re wrong,” Pa­trick says

Nev­er­the­less, the 45-year-old was shar­ing his ac­count the day af­ter he quit his postKyphon job with Bos­ton Sci­en­tific Corp. to ded­i­cate him­self to run­ning the Austin (Minn.) Bru­ins, a North Amer­i­can Hockey League ex­pan­sion team he bought. “The money we’ve got­ten is awe­some,” Pa­trick says. “You couldn’t do it oth­er­wise.”

Pa­trick teamed with an­other Kyphon em­ployee in the law­suit and split $15 mil­lion af­ter it was set­tled, and they may con­tinue to get paid as hos­pi­tals set­tle re­lated al­le­ga­tions— nine have done so al­ready. The other plain­tiff, Chuck Bates, just re­turned from a mis­sion trip to South Africa with a Chris­tian or­ga­ni­za­tion, some­thing the re­ward has given him the time and money to do. He took a sim­i­lar trip to China and has an­other planned to Hon­duras. Like Pa­trick, he’s done with health­care, in­stead play­ing a de­tached role in an in­vest­ment busi­ness he started with a friend.

The big­gest cases re­ally do bring rock-star money. John Kopchin­ski, a for­mer Pfizer sales rep­re­sen­ta­tive, was awarded $51.5 mil­lion in a 2009 set­tle­ment as part of a record $2.3 bil­lion agree­ment re­solv­ing a range of crim­i­nal al­le­ga­tions and False Claims Act law­suits pri­mar­ily

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