Whistle-blower to receive $2.4M for exposing hospital’s scheme

When residents of Wisconsin seek medical advice or care, it is important that they can trust their doctors. Trusting one’s physician means believing that he or she will make treatment recommendations based on knowledge and expertise. The news has been filled with stories lately of third-parties–such as pharmaceutical companies–clouding this doctor-patient relationship by offering kickbacks to doctors who help sell their products.

Recently, a whistle-blower brought to light a long-running scheme at a hospital in New Jersey. The hospital was allegedly illegally paying physicians to refer patients to its facilities.

The scandal began to unfold when a cardiologist filed a qui tam lawsuit under the federal False Claims Act, accusing Cooper Health System of improper compensation deals with physicians who were on one of the hospital’s advisory boards. The whistle-blower said that the health system was paying doctors to refer patients to its cardiology program, masking the kickbacks as compensation for their roles on the advisory board.

Although the hospital denied that it violated federal law against such kickbacks, after the U.S. Department of Justice and the New Jersey Attorney General’s Office investigated the allegations, the health system ultimately settled the lawsuit following three years of negotiations.

Cooper Health System has agreed to pay the federal government $10.2 million, and New Jersey $2.3 million. The whistle-blower will receive $2.4 million and Cooper will also pay his attorney’s fees.

The whistle-blower reportedly learned of the scheme when he was invited to serve on the phony advisory board. The qui tam provision of the False Claims Act allows citizens, like this man, to file lawsuits against businesses that receive government funds to accuse them of fraud or wrongdoing. As a reward for holding such businesses accountable, whistle-blowers are generally entitled to a piece of any resulting settlement recovered for the government.

Source: Forbes, “Whistleblower Lawsuit Yields $2.4 Million For New Jersey Cardiologist,” Larry Husten, Jan. 31, 2013

  • Our law firm in Milwaukee handles whistle-blower cases nationwide. While federal law protects whistle-blowers, there are great risks associated with filing a qui tam or whistle-blower lawsuit, including retaliation and job loss. It is important to seek legal counsel and proceed with caution when pursuing such a claim.

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