Vanderbilt University has recently settled a whistleblower FCA lawsuit. Three doctors brought forth the False Claims Act suit, which accused the university’s medical center of billing Medicare at a higher rate than it should have been billed.

When physicians are present for procedures, the rates billed to Medicare are higher than the rates are when residents only are performing treatment.

Relators John D’Alessio, Alexander Fisher and Heather Hagerman reportedly will ask the court to dismiss the case against Vanderbilt University as soon as the details of the settlement are finalized.

Whistleblower FCA Lawsuit Finds Problems Back More Than a Decade

Vanderbilt’s hospital started overbooking its surgeons in 2003 at which time residents began performing the “critical” portions of the surgeons’ work in ICU and during anesthesia services, alleges the lawsuit.

The whistleblower FCA lawsuit states that according to federal law, a university must not submit claims for teaching physician services unless the teaching physician is present during ALL of the service in instances of surgery or anesthesia.

In other circumstances, the teaching physician must be present during the main portion of the provided service. Unsupervised residents allegedly performed services that were charged “attending physician rates.”

The whistleblower FCA lawsuit alleges, “Vanderbilt submits claims that falsely reflect the presence, supervision and direction of attending physicians in connection with the services of surgeons, teaching physicians in ICUs, and anesthesia services.”

When the three doctors told Vanderbilt University about the alleged violations, an internal audit followed in 2008. Those audit results allegedly were ignored, leading the university to find “ways to cover up” the improper practices and continue to illegally bill for unsupervised services at the higher attending physician rates.

An attempt by Vanderbilt to have the case dismissed because the relators were not “original sources” of the information was unsuccessful.

The trio of doctors argued “the claims are specific to Vanderbilt during the time period when they worked there as physicians and acquired first-hand knowledge of the fraud and steps by Vanderbilt to avoid detection.”

Fisher says the hospital asked him to leave his position after he voiced issues with the false billings. In addition to the whistleblower FCA lawsuit, he has also filed a retaliatory discharge claim against Vanderbilt University.

The False Claims Act prohibits retaliatory discharge for reporting false claims.

Whistleblowers Have Access to Suspicious Activity

According to the Association of Certified Fraud Examiners, 43 percent of fraud is found through tips provided by someone within an organization. Less than 15 percent of fraudulent activity is uncovered by management or internal auditors, and outside auditors find only three percent.

More than 55 federal laws protect or reward whistleblowers, and 44 states plus Washington D.C. provide further, albeit varying, degrees of legal protection.

The Whistleblower FCA Lawsuit is D’Alessio et al v. Vanderbilt University, et al, Case No. 3:11-cv-00467, in the U.S. District Court for the Middle District of Tennessee.