The hub of whis­tle-blower law­suits /

Whis­tle-blow­ers fol­low spot­light to Nashville

Modern Healthcare - - FRONT PAGE - Beth Kutscher

Mid­dle Ten­nessee, the na­tional hub of the for-profit hospi­tal in­dus­try, is at­tract­ing more whis­tle-blow­ers as the U.S. at­tor­ney in Nashville has made health­care fraud a fo­cus.

Al­though these cases are filed un­der seal— mak­ing the num­ber of suits un­known—the dis­trict by all ac­counts is see­ing in­creased ac­tiv­ity in pros­e­cut­ing vi­o­la­tions of the False Claims Act, which cov­ers fraud against gov­ern­ment pro­grams. And the num­ber of in­ves­ti­ga­tions is expected to rise.

U.S. At­tor­ney Jerry Martin con­firmed in an in­ter­view that the ju­ris­dic­tion has seen “ex­po­nen­tial growth” in both cases and re­cov­er­ies. His dis­trict ex­tends north and south from Nashville to the state’s bor­ders.

Martin noted that his of­fice has re­couped $130 mil­lion since 2011, com­pared with only $3 mil­lion in 2010. “I made fight­ing health­care fraud a top pri­or­ity,” he said. “We’re re­ally just get­ting started.”

Key health­care vic­to­ries for the dis­trict in­clude judg­ments of $82.6 mil­lion against Re­nal Care Group, Nashville, and par­ent com­pany Fre­se­nius Med­i­cal Care, Waltham, Mass., in May 2011 and $11.1 mil­lion against MedQuest As­so­ci­ates, Al­pharetta, Ga., in Oc­to­ber.

The dis­trict also set­tled with Bos­ton Sci­en­tific sub­sidiary Guidant, Nat­ick, Mass., for $9.25 mil­lion in Septem­ber and AmMed Di­rect, Nashville, for $18 mil­lion in April.

Health­care fraud has been a sig­nif­i­cant area of fo­cus un­der the Obama ad­min­is­tra­tion, which has re­ported record-break­ing re­cov­er­ies top­ping $10.7 bil­lion. In May 2009, the ad­min­is­tra­tion in­tro­duced the Health Care Fraud Preven­tion and En­force­ment Ac­tion Team (HEAT) ini­tia­tive, and the Pa­tient Pro­tec­tion and Af­ford­able Care Act also sets stricter penal­ties for fraud­u­lent ac­tiv­i­ties (See story, p. 14).

HHS and the U.S. Jus­tice Depart­ment launched a pub­lic-pri­vate part­ner­ship last month with health in­sur­ers to root out billing fraud us­ing so­phis­ti­cated an­a­lyt­ics and data shar­ing.

Yet Jen­nifer Weaver, a part­ner at Nashville­based law firm Waller, noted that the Mid­dle Dis­trict of Ten­nessee stands out as one of the U.S. at­tor­neys’ of­fices to par­tic­i­pate in a pi­lot pro­gram in which the in­spec­tor gen­eral’s of­fice has placed a spe­cial as­sis­tant U.S. at­tor­ney to fo­cus on crim­i­nal health­care fraud cases.

And she at­trib­uted the shift di­rectly to the ar­rival of Martin, an Obama ap­pointee sworn into of­fice in May 2010, who she said is be­com­ing a “na­tional fig­ure” in health­care fraud en­force­ment.

“That au­to­mat­i­cally at­tracts re­la­tors’ coun­sel,” she said, adding that she ex­pects to see more cases filed in the Mid­dle Ten­nessee Dis­trict be­cause of the dis­trict’s “suc­cess­ful track record” and “demon­strated will­ing­ness to in­ter­vene.”

“Qui tam” or whis­tle-blower suits can be brought in any ju­ris­dic­tion where a de­fen­dant “can be found, re­sides (or) trans­acts busi­ness,” or where the vi­o­la­tions of the False Claims Act oc­curred. Whis­tle-blow­ers are more likely to be suc­cess­ful if the gov­ern­ment in­ter­venes in their case, mak­ing it ben­e­fi­cial for plain­tiffs to seek out a ju­ris­dic­tion with an in­ter­est in fraud cases.

Ty Howard, a part­ner in the Nashville of­fice of law firm Bradley Arant Boult Cum­mings, noted that re­cov­er­ies in the Mid­dle Ten­nessee Dis­trict have “sig­nif­i­cantly in­creased” and more re­sources have been di­rected to­ward False Claims Act suits.

“We see these cases in­creas­ing ev­ery­where, but the Mid­dle Dis­trict of Ten­nessee is go­ing to be a leader in that,” said Howard, a for­mer as­sis­tant U.S. at­tor­ney who left the of­fice in March. “I think it is in­creas­ingly a qui tam friendly ju­ris­dic­tion.”

He added that Martin him­self is in­ter­ested in tak­ing on fraud cases. Be­fore be­com­ing a U.S. at­tor­ney, he fo­cused on col­lec­tive and class-ac­tion cases in­volv­ing share­hold­ers, con­sumers and em­ploy­ees in pri­vate prac­tice.

Martin has in­creased the num­ber of civil at­tor­neys in his of­fice, which now has four at­tor­neys and a full-time in­ves­ti­ga­tor de­voted to False Claims Act cases. “I think that the word has got­ten out,” Martin said.

Patrick Burns, di­rec­tor of com­mu­ni­ca­tions for the Tax­pay­ers Against Fraud Ed­u­ca­tion Fund, a group that fa­cil­i­tates the fil­ing of qui tam cases, also de­clined to say whether more plain­tiffs are fil­ing suits in the Mid­dle Ten­nessee Dis­trict. Yet he noted that Martin re­cently at­tended one of the or­ga­ni­za­tion’s meet­ings and “em­phat­i­cally and pub­licly asked us to bring cases.”

Burns also pegged U.S. At­tor­ney Preet Bharara, whose ju­ris­dic­tion in­cludes much of New York City, as tak­ing a sig­nif­i­cant in­ter­est in pros­e­cut­ing fraud cases.

Weaver noted that Martin’s win on sum­mary judg­ment in the Re­nal Care and MedQuest cases was un­usual be­cause the gov­ern­ment needed to pre­vail on each el­e­ment of its False Claims Act claim.

Most of these cases set­tle, she added, but the Nashville of­fice has been “proac­tive in go­ing out and rolling up their sleeves” to win cases.

The dis­trict’s lo­ca­tion in the heart of the for-profit hospi­tal sec­tor is also no co­in­ci­dence. Nashville is home to in­dus­try gi­ant HCA, and eight of the top 20 for-profit chains are head­quar­tered in the Nashville-Brent­wood-Franklin cor­ri­dor, a 20-mile stretch along I-65.

“I think that ju­ris­dic­tion plays a big role,” Howard said, adding that Nashville is in­creas­ingly not just a re­gional health­care hub but a na­tional one.


Martin, who said fight­ing health­care fraud is a pri­or­ity, noted that his of­fice has re­couped $130 mil­lion since 2011.

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