Whistleblowers accuse Erlanger of illegal billing for concurrent surgeries that left patients unsupervised

A federal whistleblower lawsuit filed against Erlanger Health System accuses hospital leaders of illegal billing practices by knowingly overlapping surgeries and allowing trainees to operate on patients without physician supervision, among other patient safety and compliance issues.

The complaint, brought under the federal False Claims Act and Tennessee Medicaid False Claims Act and filed in April 2021 in U.S. District Court, alleges surgeons who practice at Erlanger violated state and federal law by regularly billing for two or three different surgeries in the same timeframe while leaving residents and interns alone to complete operations without proper oversight or patient consent.

Medicare and Tennessee’s Medicaid program, TennCare, require a supervising or teaching physician to be present for the “key and critical” portions of each surgery in order to bill for the procedure and receive payment.

As a teaching hospital, Erlanger is supposed to use young doctors in training, known as residents, during surgeries. It’s up to the teaching physicians to decide what aspects of the surgery are key and critical because it can vary significantly depending on the individual patient, procedure or the skills of the resident.

“The surgeries were often scheduled to start within fifteen to thirty minutes of one another and, in the case of three overlapping bookings, two or more surgeries frequently occurred entirely within the duration of a third,” the suit alleges. “This routine practice meant unwitting patients were subjected to longer-than-necessary operating-room times and charges, often under anesthesia, often in the care of trainees, and nearly always without the backup of a properly qualified surgeon, despite legal requirements.”

The plaintiffs — Erlanger’s former chief information officer, Dr. Stephen Adams, and orthopedic surgeons Dr. Julie Adams and Dr. Scott Steinmann — say in the suit that they raised those concerns about patient safety and compliance with Erlanger leadership, which ultimately cost them their jobs.

“Erlanger deliberately turned a blind eye to the problems, deciding, instead, to focus negative attention upon those who dared to raise such issues,” the suit alleges.

The three are also seeking payment for damages they claim came as part of a “malicious and unlawful campaign of retaliation” under former Erlanger CEO Dr. Will Jackson, according to the suit.

The False Claims Act is a longstanding statute that allows individuals with non-public information to bring a suit in the name of the government to allege false statements or fraudulent representations have been used to secure government payment.

The law offers financial incentives for those suits as a way to safeguard public funds spent on critical services, such as health care, military support, infrastructure and disaster relief.

If successful, the whistleblower — also known as the relator — typically receives a portion of the recovery ranging between 15% and 30%, according to the U.S. Department of Justice website.

By law, those suits must be filed under seal to afford the government an opportunity to investigate the allegations and decide whether to take the case forward — which occurs in about 20% of cases filed. If the government declines to intervene, the whistleblowers have the option to proceed themselves.

Erlanger spokesperson Blaine Kelley said in an emailed statement that the state of Tennessee has already declined to intervene in the case. Erlanger officials are still awaiting confirmation of the U.S. Attorney’s office’s decision, she said.

“Erlanger has worked with and otherwise fully cooperated with the government’s review of the claims as they relate to Erlanger over the past 18 months,” Kelley wrote. “Erlanger disputes the merit of the allegations.”

She added, “No instances of patient harm relating to these allegations have been identified.”

Reuben Guttman, an attorney representing the whistleblowers, said his clients are unable to discuss the case.

“The three renowned physicians and professors of medicine have alleged issues of significant public importance, and they look forward to a full airing of their concerns in court,” Guttman said by email. “They hope that whatever comes out of this litigation will ultimately lead to better medical care for the vulnerable and the voiceless.”

Dr. Stephen Adams is board-certified in both family medicine and medical informatics and is a professor in the department of family medicine at Erlanger’s academic affiliate, the University of Tennessee College of Medicine Chattanooga, where he has worked since 1997, according to the suit.

Dr. Julie Adams and her husband, Steinmann, are leaders in their field and were recruited in 2019 to join the college of medicine faculty and Erlanger. At the time, Steinmann was appointed chairman of the Department of Orthopedic Surgery. He is now an emeritus professor of orthopedics at the Mayo Clinic College of Medicine.

In fiscal year 2022, whistleblowers filed 652 False Claims Act suits, with health care fraud representing the most common type of cases, according to the Department of Justice.

In February 2022, Massachusetts General Hospital — the renowned teaching hospital affiliated with Harvard — agreed to pay $14.6 million to settle a federal lawsuit alleging it fraudulently billed government insurers by overlapping surgeries as supervising surgeons worked in other operating rooms, according to a report in the Boston Globe. Just last month, the University of Pittsburgh Medical Center, University of Pittsburgh Physicians and one of the group’s leading surgeons agreed to pay $8.5 million to the United States to resolve claims over improper billing for concurrent surgeries.

Source: By Elizabeth Fite, Chattanooga Times Free Press.
Contact Elizabeth Fite at efite@timesfreepress.com or 423-757-6673.

Article available on-line at https://www.timesfreepress.com/news/2023/mar/27/whistleblowers-accuse-erlanger-illegal-billing-tfp/

Demanding more impact from impact litigation: lessons to be learned from multi-state opioid settlements

By Reuben Guttman and Liza Vertinsky, July 25, 2022

In the 1990s, state Attorneys General learned how to leverage their resources when they retained private counsel to sue the tobacco industry. The private attorneys worked on contingency, meaning they did not get paid unless money was recovered from the tobacco industry. For their part, the states were able to take on novel litigation and draw from private investments in legal innovation without putting taxpayer dollars at risk.

Since the Tobacco Master Settlement Agreement was signed in 1998, state Attorneys General have worked with private counsel in similar relationships to bring an array of healthsafety, and environmental suits focused on health impacts. These suits have included cases against drug companies, the most notorious of which featured opioid manufacturers and distributors.

In July 2022, 52 states and territories, along with many local governments, entered into a $26 billion multijurisdictional agreement with three major pharmaceutical distributors and a pharmaceutical manufacturer to settle claims arising from their opioid business practices. This multistate opioid settlement followed earlier ones reached with the now-infamous Purdue Pharma, as well as with McKinsey ConsultingMallinckrodt, and Insys Therapeutics, and was followed by settlements with two more opioid manufacturers. The result was a multi-state enforcement effort by Attorneys General that is the second largest in U.S. history, exceeded only by the Tobacco Master Settlement Agreement.

While the state Attorneys General who participated in these suits and settlements were quick to herald them as a major success, with more than $30 billion in settlement funds and future monitoring and restricting future opioid deliveries, it is a stretch to say these are industry-changing events. Too little was done to educate policymakers and the public about the nature and sources of industry misconduct and to address the remaining vulnerabilities in the pharmaceutical manufacturing and distribution system. The results did too little to change the market ecosystem that fueled the epidemic.

The opioid litigation, like many cases brought against pharmaceutical and device companies, challenged marketing practices that have caused products to be used in ways that place profits ahead of patients, often putting patients at risk of harm. These lawsuits exposed practices that have resulted in professional standards of care that seem to be influenced more by Wall Street promises than by medical necessity.

Yet far too often, these cases are resolved short of full fact finding — called discovery — or without a public trial and a published court decision. Multi-million-dollar opioid settlement resolutions are touted in press releases as major successes while the culprit corporations admit to nothing, simultaneously telling investors that the settlement was a business decision and will not affect the long-term bottom line. Indeed, history shows that when drug companies pay hundreds of millions of dollars — or even billions of dollars — to resolve claims of drug marketing derelictions, their price per share is not affected, or may even get a boost because investors believe the settlement was a cheap fee for a license to break the law.

As much as these cases have provided an inkling of the profit-motivated misconduct of companies that Americans depend on for health care and a safe environment, knowledge of the depth of corporate misconduct remains just that, an inkling. Confidentiality agreements — often executed to prevent delays in producing the documents required for civil litigation — keep the most sordid details secret. And when there is no trial, the public gets to learn little about identifying wrongful conduct and legislators have difficulty making laws that prevent it.

Supreme Court Justice Louis D. Brandeis famously wrote that sunshine is the best disinfectant. While recovering money for public programs is essential, state Attorneys General must do a better job of also making public the lessons learned from these opioid settlements. If the drug industry is using subtle marketing tactics to manipulate the prescribing habits of physicians, for example, the public — including legislators, regulators, the press, and even physicians — must know the details.

Impact litigation must be designed to effect changes in industry behavior. Just as the National Transportation Safety Board investigates and issues a public report when a train wreck occurs, and just as Environmental Impact Statements are required for federal projects that could significantly affect the quality of the human environment, state Attorneys General should treat corporate health and safety derelictions as deserving of detailed public reports. And they should make it clear to the attorneys involved — whether in-house or under contingency agreement — that confidentiality agreements cloaking the secrecy of wrongdoing are to be used only sparingly, to protect legitimate trade secrets that are not essential to reforming industry practices, and not to hide information that is important to the public.

In the end, the public needs to know all the facts and policymakers need to act on the facts. A simple press release announcing a seemingly high-dollar settlement doesn’t achieve either of those objectives.


Reuben Guttman, a partner with Washington, D.C.-based Guttman, Buschner & Brooks, has litigated under the False Claims Act to challenge pharmaceutical marketing practices. Liza Vertinsky is a professor of law at the University of Maryland Francis King Carey School of Law. Their article “Public-Private Litigation for Health” was published in the Utah Law Review.

Source: Article available on-line at Statnews.com.

Reuben A. Guttman, District of Columbia Fellow, Co-Publishes “Pretrial Advocacy”

District of Columbia Fellow Reuben A. Guttman has co-authored a new book, “Pretrial Advocacy,” to be released by the National Institute for Trial Advocacy. (Now available in print and e-book here.) The volume, which was also written by Rutgers Professor J.C. Lore, discusses the “unwritten rules” of pre-trial preparation and grapples with the challenges of efficiently developing cases that can stand up to jury scrutiny in the face of overflowing demand, even though 90% of civil cases never make it to trial.

If anybody is qualified to talk about effective legal advocacy, its Reuben Guttman. The Guttman, Buschner & Brooks founding partner has spent his 36-year career releasing staggering sums of money from the grasps of oil refineries, pharmaceutical organizations, and prisons who have run afoul of laws such as the False Claims Act and the Federal Fair Labor Standards Act. Mr. Guttman, who started his legal career as counsel for the Service Employees International Union, AFL-CIO, is a whistleblower’s best friend—in 2015, he helped Florida’s Lynn Szymoniak gain an $18 million settlement after she uncovered a fraudulent foreclosure scheme that threatened to undermine her own housing and that of thousands of other homeowners.

In addition to being a legal superstar, Mr. Guttman is a familiar figure in the academy and the press. When he isn’t giving his time to Emory University School of Law as an adjunct professor, journal advisor, or board member, he’s writing for or being quoted in more than 30 journals and media outlets as varied as The New York Times and Peking University Public Interest Law Journal. Mr. Guttman’s international influence stretches from the U.S. federal government, where he has testified before Congress and advised President Clinton’s transition team, to as far away as China, where he has offered his thoughts on Chinese labor laws at the Dutch Embassy and lectured at universities in Shanghai and Beijing.

Source: American Bar Foundation.

Now Available in print and e-book here.

On the Rule of Law: Now is the Time to Rethink the Role of Law Schools

In his opening remarks to a Senate Judiciary Committee charged with reviewing his nomination to be Attorney General of the United States, Judge Merrick Garland noted that “communities of color and other minorities still face discrimination in housing, in education, in employment and in the criminal justice system, and they bear the brunt of the harm caused by the pandemic . . . .” All of these problems still exist over 150 years since the passage of the Thirteenth, Fourteenth, and Fifteenth Amendments; over sixty years since Brown v. Board of Education was decided; and over half a century since the civil rights legislation of the 1960s.

The truth is that we — as a mature nation — had a lot to overcome; today our nation remains tainted by an ugly upbringing, the history of which has too often been glossed over in palatable terms…

Read the full piece below.


Oglethorpe Inc. Agrees to Pay $10.25 Million to Resolve False Claims Act Lawsuit

Florida based Oglethorpe Inc. and it’s three Ohio treatment facilities will pay $10.25 million to settle allegations of illegal patient kickback provisions, unnecessary inpatient admission, and the resulting submission of false claims to Medicare. The suit alleged that Oglethorpe’s treatment centers, which include two inpatient psychiatric hospitals and one substance abuse treatment facility, provided free long-distance transportation to induce patients to seek treatment at the facilities. Claims submitted to Medicare or Medicaid for services provided to these patients violate the Anti-Kickback Statute and therefore constitute false claims. The government also accused Oglethorpe of submitting claims for medically unnecessary inpatient admissions and associated services, which are also false claims.

The civil settlement resolves claims that were brought under the qui tam or whistleblower provision of the False Claims Act. The whistleblower in this case, a former client advocate at one of Oglethorpe’s facilities, will receive a percentage share of the total funds recovered.

Read the DOJ press release here: https://www.justice.gov/opa/pr/ohio-treatment-facilities-and-corporate-parent-agree-pay-1025-million-resolve-false-claims

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