Columbus Regional to pay up to $35 million to end whistleblower lawsuit
Columbus Regional Healthcare System and Dr. Andrew Pippas have agreed to settle whistle blower claims that they incorrectly billed governmental insurers and violated the False Claims Act.
Dr. Andrew Pippas, medical director of the John B. Amos Cancer Center, has agreed to pay $425,000 to settle billing claims against him.
Columbus Regional has agreed to pay $26 million with the possibility the amount could reach a total of $35 million over the next five years.
Richard Barker, the former top administrator of the John B. Amos Cancer Center, filed the wide-ranging and detailed allegations under the Federal False Claims Act — also known as a qui tam action — in May 2012 in U.S. District Court, Middle District of Georgia. The case was under seal and Columbus Regional did not know of its existence until June 2013.
Barker filed a second, similar suit in December 2014, accusing Columbus Regional of overpaying Pippas.
The original suit was scheduled for trial in August, but U.S. District Judge Clay Land delayed the trial date in April so the sides could work toward a settlement. The details of that settlement, which ends both lawsuits, were made public on Friday.
“We have been dealing with this lawsuit the last two years,” said Columbus Regional President and Chief Executive Officer Scott Hill. “We entered into some discussions with the government at the beginning of the year, and we need to move forward as an organization. ... To continue to fight this litigation is costly for the organization, and ultimately the end result of going to trial is probably not one that is feasible for our organization at this moment.”
In addition to the settlement fee, Columbus Regional has spent almost $10 million in attorney fees with Atlanta-based King & Spalding and in other costs associated with the defense of the suit, Hill said.
As part of the settlement, Columbus Regional will enter into a “Corporate Integrity Agreement” with the U.S. Department of Health and Human Services, Office of Inspector General. It is intended to avoid and detect conduct similar to what was alleged in the lawsuit.
U.S. Attorney Michael Moore of the Middle District of Georgia said the settlement amount was appropriate.
“Access to health care is on everyone’s mind, especially with respect to rural communities,” Moore said in a statement. “The type of conduct alleged in this case puts that access at risk. The settlement, on the one hand, reflects the Department of Justice’s commitment to make sure that hospitals and physicians who commit violations of federal law are held to account, and on the other hand, especially with the requirement of the monitoring agreement makes sure we continue to have the appropriately functioning health care providers assessible to the wide array of the communities they serve.”
Columbus Regional has made an initial $10 million payment to settle the suit. It will pay $3 million per year for the next five years and an additional $1 million related to the recent purchase of Main Street Village, a commercial property off Veterans Parkway and adjacent to a hospital owned by Columbus Regional.
The remaining $9 million of the potential $35 million is contingent on Columbus Regional’s bottom line over the next five years. That money will be paid only if Columbus Regional meets certain revenue levels outlined in the agreement.
“That is a big number, but the way the settlement is structured is positive for the organization,” Hill said. “It is absolutely something that we can manage — there is no doubt about that.”
Columbus Regional, a nonprofit organization that operates Midtown Medical Center, among other facilities, has an annual budget of $450 million, Hill said.
Pippas’ settlement amount, which is a personal payment and not being paid by Columbus Regional, is due immediately.
The bulk of the money being paid by Columbus Regional and Pippas is going to the federal government. Of the $25 million Columbus Regional will pay over five years, the state of Georgia will receive $746,100. Of the $425,000 Pippas will pay, the state will get $12,860.
Pippas will continue in his role as the medical director of the Amos Cancer Center, Hill said. Pippas will not be available for comment, Hill said.
“Dr. Pippas is a great physician,” Hill said. “We’re glad he is in our organization and we want him to stay. He is caught up in this lawsuit — it is unfortunate. The settlement of the suit does not affect his employment status with us.”
The second Barker suit alleges that Columbus Regional was overcompensating Pippas and the other Amos Cancer Center physicians. As a result of that, Columbus Regional could have been responsible for all of the government-backed insurance claims that those doctors submitted, thus causing the hospital’s exposure to be $150 million or more.
“The challenge in the allegation is we paid Dr. Pippas too much,” said L. M. “Tripp” Layfield III, Columbus Regional’s senior vice president and general counsel. “What they are saying is merely because you paid him too much now you can’t bill anything. The way the penalty works, not only are they saying you must pay back what ever amount you received from Medicare or Medicaid, they triple it. They are not saying the treatment was not necessary or substandard. They are just saying we should not have billed for it.”
Pippas, in 2013, was paid $1.5 million by Columbus Regional, according to the suit. That contract was renegotiated in May 2014, Hill said.
“His salary does not reach those levels now,” said Hill, who declined to give Pippas current salary citing a personnel matter.
Jamie Bennett, the Maryland attorney who represents Barker, said the settlement made sense.
“It reflects the seriousness of the allegations, while it recognizes the financial difficulties that the defendant has right now,” she said.
Columbus Regional and Pippas admitted no liability in the settlement,
“That is what the defendant always says,” Bennett said. “Thirty-five million is a lot of no-liability.”
The allegations and settlement played out in a series of legal moves that started Friday morning.
Just before the terms of the settlement were disclosed on Friday, Moore, the U.S. Attorney, filed a motion for the Georgia and federal governments to take over the case for settlement purposes. Judge Clay Land immediately ordered that the state and U.S. governments could intervene.
A qui tam action is complex litigation in which a whistleblower initiates the legal case on behalf of the federal and state governments, and if the whistleblower is successful, that person shares in the money the government recoups.
Bennett said Barker was still in talks with the state and federal governments about the amount he will be paid.
“We have not reached an agreement with the DOJ, but we are entitled to the minimum 15 percent and we are trying to figure out where it lands, between 15 and 30 percent.
Barker’s allegations were against the Amos Cancer Center and Pippas, one of Columbus’ most prominent physicians. Barker became administrative director of the John B. Amos Cancer Center in late September 2011 and within two weeks of starting the job he met with his then-boss, Kevin Sass, chief executive officer for Doctors Hospital. According to the lawsuit, Barker told Sass about the alleged issues he uncovered with medical documentation of office visits, including that many of the medical oncologists’ patient encounter forms did not support the claims submitted on their behalf.
The suit alleged that the John B. Amos Cancer Center had a long-standing practice of improper coding and billing and that its five physicians working for Regional Oncology LLC “systematically” overcharged Medicare, Medicaid, TRICARE/CHAMPUS and the Federal Employee Health Benefits Program and “reaped” potentially millions of dollars of unearned fees.
The physicians filed bills for office visits at levels that were not supported by the documentation in the medical record and filed bills for services that were included within the reimbursement for the administration of chemotherapy and thus were not separately billable, the suit claimed.
Barker also sued Dr. Thomas “Jack” Tidwell and the Columbus Radiation Oncology Treatment Center, formerly the Tidwell Cancer Treatment Center. Columbus Regional purchased the Tidwell Cancer Treatment Center for $10.5 million in July 2010, and the suit alleges that Columbus Regional overpaid for the Tidwell Center, thus providing a kickback for Tidwell’s patient referrals.
Those claims were dismissed Friday morning.
How it unfolded
• July 2010: Dr. Thomas “Jack” Tidwell sells Tidwell Cancer Treatment Center to Columbus Regional Healthcare System for $10.5 million. Though not a Columbus Regional employee, Tidwell continues to practice at the center until his retirement in December 2012.
• February 2011: Columbus Regional Healthcare Systems President and Chief Executive Officer Larry Sanders announces his retirement, effective Sept. 30, 2011.
• Sept. 26, 2011: Richard Barker becomes administrative director of the John B. Amos Cancer Center.
• Oct. 4, 2011: Barker meets with his then-boss, Kevin Sass, chief executive officer for Doctors Hospital, a Columbus Regional entity. According to the lawsuit, Barker tells Sass about the alleged issues he uncovered with medical documentation of office visits, including that many of the medical oncologists’ patient encounter forms did not support the claims submitted on their behalf. According to the lawsuit, Sass agrees and admits that this was not the first time he has heard of this issue.
• December 2011: Charles A. Stark, president and chief executive officer of Firelands Regional Health System in Sandusky, Ohio, is announced as the new president and CEO of Columbus Regional Healthcare System, effective February 2012.
• May 18, 2012: Barker files a False Claims Act complaint [--] or qui tam action [--] against Columbus Regional Healthcare System, The Medical Center, the John B. Amos Cancer Center and Regional Oncology LLC. The complaint, filed in U.S. District Court, Middle District of Georgia, is placed under seal by Judge Clay Land and the defendants are not aware it exists.
• Feb. 19, 2013: Sass leaves as senior executive officer of Doctors Hospital.
• May 10, 2013: Barker amends his False Claims Act complaint against Columbus Regional Healthcare System, The Medical Center, the John B. Amos Cancer Center and Regional Oncology, LLC. The amended claim adds Tidwell and Columbus Radiation Oncology Treatment Center, formerly the Tidwell Cancer Center, as defendants.
• May 28, 2013: Land issues an order to unseal Barker’s suit, but the complaint does not become public for almost three weeks.
• June, 2013: Barker, who had worked as administrative director of the John B. Amos Cancer Center while the suit was under seal, is placed on administrative leave with pay, says his attorney, Jamie Bennett.
• Sept. 30, 2013: Barker’s employment with John B. Amos Cancer Center ends.
• June 13, 2014: Stark resigns, effective immediately, as president and CEO of Columbus Regional Health.
• July 24, 2014: Scott Hill named president and CEO of Columbus Regional. Hill had served as Columbus Regional’s chief operating officer since November 2012.
• Aug. 20, 2014: Barker’s attorney argues in a hearing in front of Land that Columbus Regional, the cancer center and its physicians must supply material a Columbus Regional lawyer claims is protected under attorney-client privilege.
• Aug. 29, 2014: Saying that attorney-client privilege is not sacrosanct, Land orders Columbus Regional to turn over material its attorneys claimed was protected.
• Dec. 29, 2014: Barker files a second lawsuit that claims Columbus Regional overcompensated Pippas.
• Jan. 28, 2015: Land sets the trial date for Aug. 10, 2015.
• April 3, 2015: Land holds a telephone conference with attorneys. A settlement between the Columbus Regional defendants and Barker is reached. The case involving the sale of the Tidwell Cancer Center remains.
• July 1, 2015: Land gives attorneys for Barker and Columbus Regional a deadline of Sept. 4 to complete the settlement.
• July 6, 2015: Barker’s attorney dismisses the suit against Dr. Thomas Jack Tidwell.
• July 7, 2015: Attorneys for the State of Georgia and the United States of America file with Land’s court to enter the case.
• Sept. 4, 2015: Suit is settled with Columbus Regional Health agreeing to pay up to $35 million. Pippas agrees to pay $425,000. That ends both lawsuits.
What is the False Claims Act?: The False Claims Act is the government’s primary civil remedy to redress false claims for federal money or property, such as Medicare benefits, federal subsidies and loans and payments under contracts for goods and services. Amendments in 1986 strengthened the act and increased incentives for whistleblowers to file lawsuits on behalf of the government, leading to more investigations and greater recoveries.
What is a qui tam action?: In a qui tam action, a private party brings a suit on the government’s behalf. The government, not the private party, is considered the real plaintiff. If the government succeeds, the private party receives a share of the award. The federal False Claims Act authorizes qui tam actions against parties who have defrauded the federal government. If successful, a private party in a False Claims Act qui tam action may receive up to 30 percent of the government’s award.
Are qui tam actions common?: In fiscal year 2012, which ended Sept. 30, 2012, whistleblowers filed 647 qui tam suits. Of the $4.9 billion the Justice Department recovered from settlements and judgments in civil cases involving fraud against the government, a record $3.3 billion was recovered in the whistleblower suits.
— Sources: U.S. Department of Justice, Cornell University Law School
Columbus Regional settlement agreement
This story was originally published September 4, 2015 at 1:56 PM with the headline "Columbus Regional to pay up to $35 million to end whistleblower lawsuit."