The Qui Tam Team Blog Join In the Fight Against Fraud

Another Whistleblowing Doc

This post was written by Josh

Doctors are on the front lines of medicine, and, as a result, they often observe fraud first hand. The government spends a huge amount of money on programs like Medicare and Medicaid each year ($386 billion for Medicare and $201 billion for Medicaid in 2008, for example) and unscrupulous doctors and hospitals continue to steal funds from these programs--at the expense of patients and taxpayers.  A recent case illustrates the important role physicians play in identifying fraud and bringing it to the government's attention through qui tam suits.

Dr. Steven Radjenovich is a physician who now practices in Alexandria, Minnesota. In 2004, Dr. Radjenovich filed a qui tam suit against Wheaton Community Hospital, a small hospital owned by the City of Wheaton, Minnesota (also a defendant), and Dr. Stanley Gallagher, who was the hospital's chief of staff.  The suit alleged that the hospital had admitted some patients unnecessarily and kept others longer than necessary, with Medicare footing the bill. The hospital allegedly used the ill-gotten Medicare funds to pay for an addition to the building.

Although defendant Dr. Gallagher's attorney portrays him as a "country doctor," fighting against a draconian government bureaucracy that wanted to cut off care for elderly patients, the reality seems to be somewhat different. The Department of Justice announced that the hospital, the city, and the "country doctor" collectively will pay $846,461 to settle the qui tam suit. Dr. Gallagher's share is $283,000.  It's unclear what being "country" has to do with overbilling for unnecessary treatment.

Of course the defendants in this case deny any wrongdoing, but a review by government experts found that randomly selected patient records did in fact reveal unnecessary admissions. For example, several elderly patients were admitted to the hospital's acute care unit, but they only received oral painkillers.

Dr. Radjenovich observed all of this first hand, so he was well-qualified to identify the fraudulent activity. He will receive $203,150 out of the settlement, which is well-deserved. It takes a lot of courage to blow the whistle in a small community like Wheaton, Minnesota ("Home of the World's Largest Mallard"), but Dr. Radjenovich knew that there was something wrong and acted upon his knowledge.