Medicare Compliance & Reimbursement

A hospital employee who blew the whistle on alleged stark violations in a hospital-physician practice lease deal will collect a big chunk of the settlement proceeds - and those proceeds represent the biggest Stark settlement ever. Rapid City Regional Hospital and Oncology Associates agreed to pay about $6.5 million to settle the qui tam action, which was initially brought by former RCRH employee Karen Johnson-Pochardt. The Department of Justice maintained that Johnson-Pochardt ought to get 16 percent of the proceeds for her role as qui tam relator - but a federal judge Feb. 26 ordered that she collect much more. U.S. District Judge Karen Schreier pointed out that Johnson-Pochardt did virtually everything the DOJ expects from a whistleblower. Schreier noted that Johnson Pochardt identified - and carefully documented - an alleged fraud the government otherwise never would have found out about. The judge emphasized - and this merits careful attention from health care providers - that she also reported the problem to her superiors, and made extensive efforts to get the problem resolved internally before turning to the feds. As a result, Schreier ruled in U.S. ex rel Johnson-Pochardt v. Rapid City Regional Hospital (No. CIV 2001-5019) that Johnson-Pochardt should collect 24 percent of the settlement trove, just one percentage point below the statutory maximum. In the ruling, Schreier emphasized that Johnson-Pochardt's work on the whistleblower case came at considerable personal sacrifice. She'll now be a millionaire. Lesson Learned: Health care leaders should listen - and take prompt action - when employees come to them with compliance concerns. Failure to do so can cost an organization big. To see Judge Schreier's decision, go to http://www.sdbar.org/opinions/DSD/2003/2003dsd003.htm.