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Federal Judge Rules Whistleblowers’ Case against Adventist Health System has Merit
By AT News Team
Last week United States District Judge John Antoon II ruled for the second time that a “whistleblower” fraud recovery lawsuit brought by a former employee and a physician at Florida Hospital in Orlando has sufficient merit that it must move ahead. Lawyers representing the nonprofit health care organization which is affiliated with the Seventh-day Adventist Church had argued that the two did not have adequate knowledge of the situation nor written evidence to back up their allegations and asked the judge to dismiss the case.
The first request to dismiss the case was refused by the judge in July last year. He ruled at the time that the allegations and supporting evidence met the requirements of the False Claims Act, a Federal law dating back to the Lincoln administration which has been used to recover $22 billion between 1987 and 2008, according to the Department of Justice.
This case was initiated in 2010 by Amanda Dittman, a compliance officer involved with third-party payments from 1996 to 2008, and Dr. Charlotte Elenberger, a physician who had privileges at Florida Hospital from 1995 to 2009. They charged that Adventist Health System engaged in fraud because it “routinely misused billing code modifiers to unbundle payments for bundled medical services, charging the government more than the bundled price,” reports Law 360, a legal news service.
A specific allegation in the legal complaint filed at the time was that AHS “misused a price file number for a 5,000 microgram does of the drug octreotide when only a 1,000 mcg dose was administered, overcharging the government by nearly $2,500 per dose.” The two women worked with a radiology practice that discovered that “AHS also routinely billed the Federal government for computer-aided detection software analysis of mammograms, even when no such analysis was done.” When the radiology practice “learned that it had received improper reimbursement [for services] supposedly preformed on behalf of AHS, it promptly refunded insurers and the government,” Law 360 summarized from the original complaint.
AHS refused to reimburse the government, the two whistleblowers allege. They believe that someone among AHS personnel was afraid that the refund would trigger a government audit.
This is not the only case that has been brought against AHS under the False Claims Act, nor the only whistleblowers who allege wrong-doing by the health care organization. In a different case last year, AHS agreed to pay $3.9 million to the Federal government along with 13 other health care organizations that participated in a total $12 million settlement.
One thing that makes cases of this kind controversial is that False Claims Act rewards “whistleblowers” with 15 to 25 percent of any money that is paid back to the government. “In a sense,” one attorney told Adventist Today, “these whistleblowers are like bounty hunters. There is potentially money to be made from this kind of lawsuit.” That is one reason why there are arguments before the judge as to whether or not the persons filing the complaint actually have sufficient first-hand knowledge to have really seen fraud perpetrated.
“I don’t know anything about these two people or this case,” another source told Adventist Today, “but sometimes these claims are from disgruntled former employees trying to get even.” Another possibility is much more complicated. The Federal government is engaged in a wide effort to reduce the cost of health care and one of the methods for doing this is to reduce waste and fraud. A source with knowledge of current trends in health care told Adventist Today that some in the government are encouraging lawsuits of this kind simply to pursue overall savings in health care costs.
“These are often settled without a determination of fact. The health care organizations involved simply decide that it is cheaper to pay a negotiated amount than to defend themselves. It is almost impossible to know what is really going on here.”
Health care is a life-and-death matter for every person and science has made wonderful advances possible in the healing arts. It is also a central piece in the mission of the Adventist Church. And it has never been more complicated and challenging.
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Maranatha
The end result adjustments up to 30%. One hospital was Adventist.
Did you read the article in Time? It's a must. How much of the overcharging falls on those who have *no* medical insurance or bills exceed what the policy will pay? How much is because the CEO must have extravagant salaries?
I don't recall ever hearing someone try to justify these excesses.
The high pay of a hospital CEO and overbilling of patients are unrelated and assuming or implying that an administrator would allow billing mistakes to pay their salary is a charge that can be made only by those who do not understand how a business works.
Why are administrators at Adventist hospitals paid high salaries when they used to be paid much less? Because they kept losing their top management to other hospitals offering higher salaries. Back in the mid-80s I got to know one of the deputy administrators at an Adventist hospital that shall go nameless here. After only 18 months on the job he took a job as deputy administrator of a larger hospital in the are at a salary almost four times what his boss was receiving at the first hospital. Such management losses became so great that Adventist hospitals had to start paying market rates for their administrators if they were to keep anyone with skill and experience.
Is it the responsibility of hospital managers to vigorously seek and implement methods so billing is more accurate? Absolutely. But billing is a complicated operation with numerous contributors so the chances for error are common and the contributors to errors not controllable to 100%. Overbilling is an issue for all medical facilities where the most common cause is duplicate entries by clerical personnel. For example, how many times in discussions on this site have you seen a comment repeated because the contributor didn't think the system was responding and they clicked "submit" another time? The same thing happens in entering items into the hospital billing system. For example, the unit clerk enters that the patient had another IV bag started during that shift, but the computer system is running slowly because the server is having to run an anti-virus sweep, or some other function that slows thing down and they hit "Submit" again. Now the patient is being billed for two IV bags. Or, if the clerk on the next shift goes through files from the previous shift and makes a new entry without knowing it is a duplicate. Software makers have tried functions that would flag the entry and ask for confirmation, but hospitals have largely rejected using them because of worker frustration and reduced productivity.
Management making a good faith effort to insure accurate billing is one thing, but failure to address reports of errors or to sanction errors is another. Apparently the court feels there is enough evidence to merit examination of the second.
There is no shortage of competent administrators in the market. I doubt there are many administrative types leaving positions in Adventist hospital systems today. Where else can someone with a four year degree in business graduate to a job paying millions per year?
“Biggest ‘nonprofit’ salary disclosed: Adventist Health CEO Don Jernigan’s $3.5 million. Yes, Florida Hospital’s parent company may be a ‘faith-based nonprofit,’ but that doesn’t mean it’s not profitable to work there. Tax records for this tax-exempt group showed that at least seven Adventist execs had annual packages worth more than $1 million. And Jernigan’s $3.5 million was more than the top administrators of the famed Mayo Clinic and Johns Hopkins Health System made … combined.” I have to question your broad statement about similar compensation in other Medical Centers.
I had not seen that report about executive pay and do not dispute it because averages often include extremes at either end of the measured range. While Jernigan may be the exception at the high end, salary data from 2009 shows that more than 70 hospital CEOs in the US were paid more than $1 million.
You and I know that it is unlikely the Health(Wealth) System will come up with any acceptable explanation. The love of money(not money) is the root of all evil. We all have to examine ourselves in this respect.
Maranatha
Sorry I cannot at the moment quote you a source but I have heard (maybe read) that the Health & Wealth System needs highly talented CEOS to run such a complex system who require high salaries. Why excessive salaries don't rise to a higher level of concern may be due to complacency while WO has a predominately cultural impetus; that's my view anyhow.
I can well remember when it was unusual for the wife of an SDA Pastor to work. Many will say that you can't go back but many of us believe it is high time to have the dedication and sacrifice that once marked many members as well as the clergy and the personnel associated with hospitals.
When the GC agreed to higher income for medically related personnel such as administrators it set up a caste system and we are reaping the baleful results with Time magazine showing the Florida Hospital paying an excessive salary.
Maybe some thought should be given to selling the large hospitals and setting up small clinics throughout the country that would teach healthful living. I have no doubt that the boys with the million $$ incomes would fight this tooth and nail.
Marnatha