Columbus law firm plays role in $513 million whistle-blower settlement

A Columbus personal injury law firm played a central role in a $513 million out-of-court agreement by U.S. hospital chain, Tenet Healthcare Corp., to settle criminal charges and civil claims relating to a scheme to defraud the United States and to pay kickbacks in exchange for patient referrals.

The settlement was announced Monday by the U.S. Department of Justice against Tenet and two of its Atlanta-area subsidiaries, Atlanta Medical Center Inc. and North Fulton Medical Center Inc.

Pope McGlamry, with offices in Columbus and Atlanta, was associated by the Atlanta firm of Wilbanks & Gouinlock in 2013, prior to the intervention by the Department of Justice and the State of Georgia. The original civil case was filed under seal in 2009 in the Middle District of Georgia in front of Judge Clay Land.

In June 2014, Land denied a motion from the hospitals and its parent corporation to dismiss the case. At the same time, criminal investigation was underway in the Northern District of Georgia.

As alleged in the criminal investigation as well as civil complaints filed by the department and the state of Georgia in 2014 and 2013, Atlanta Medical Center along with North Fulton Medical Center, Spalding Regional Medical Center Inc. and Hilton Head Hospital paid bribes and kickbacks to the owners and operators of prenatal care clinics serving primarily undocumented Hispanic women in return for the referral of those patients for labor and delivery medical services at Tenet hospitals, according to the Department of Justice. These kickbacks and bribes allegedly helped Tenet obtain more than $145 million in Medicaid and Medicare funds based on the resulting patient referrals, the Department of Justice news release stated.

As part of the scheme, expectant mothers were in some cases told at the prenatal care clinics that Medicaid would cover the costs associated with their childbirth and the care of their newborn only if they delivered at one of the Tenet hospitals, and in other cases were simply told that they were required to deliver at one of the Tenet hospitals, leaving them with the false belief that they could not select the hospital of their choice.

The criminal information alleges that as a result of these false and misleading statements and representations, many expectant mothers traveled long distances from their homes to deliver at the Tenet hospitals, placing their health and safety, and that of their newborn babies, at risk, the Department of Justice news release stated.

Georgia resident Ralph D. Williams filed the whistle-blower suit under the federal and Georgia False Claims Acts. Williams’ attorney, Marlan Wilbanks, said his small law firm needed the support that came by bringing Pope McGlamry into the litigation.

“Tenant has dozens of lawyers all over the country and I knew if it was just our small firm, it would be a David and Goliath situation,” Wilbanks said. “I needed a firm with litigation expertise — though it never came to that — and was well known in that court.”

Pope McGlamry attorney Neal Pope was pleased with his firm’s role in the qui tam settlement.

“We are also pleased that Wilbanks & Gouinlock saw that Pope McGlamry’s trial expertise in prosecuting major civil fraud cases would be invaluable in exposing this pay-to-play scheme involving undocumented pregnant women,” Neal Pope said.

The two Tenet subsidiaries have agreed to plead guilty to the charges alleged in the criminal information and will forfeit over $145 million to the United States. That represents the amount paid to Atlanta Medical Center Inc. and North Fulton Medical Center Inc. by the Medicare and Georgia Medicaid programs for services provided to patients referred as part of the scheme.

Once the Department of Justice intervened in the matter, Pope McGlamry assisted the federal and state governments in prosecuting the case, Pope said.

Tenet agreed to pay $368 million to the federal government, the state of Georgia and the state of South Carolina to resolve claims asserted in the False Claims Act suit filed by Williams. The False Claims Act permits whistle blowers to file suit for false claims against the government entities and to share in any recovery.

The federal share of the civil settlement is $244.227 million, the state of Georgia will recover $122.88 million, and the state of South Carolina will recover $892,125. Williams’ share of the combined civil settlement amount is approximately $84.43 million.

“While Pope McGlamry was prepared to present this qui tam action to a jury, we are also pleased that by working closely with the Department of Justice’s Civil Fraud Division and the State of Georgia’s Medicaid Fraud Control Unit we were able to recover this money for the taxpayers,” Pope said.

It is the largest qui tam settlement for the State of Georgia.

“Tenet took advantage of vulnerable pregnant women in clear violation of the law by paying kickbacks in order to bring their referrals to Tenet hospitals,” Georgia Attorney General Sam Olens said in a statement. “Through this scheme, Tenet defrauded the Georgia Medicaid program, and reaped hundreds of millions of dollars. This is an unprecedented settlement for the state of Georgia, and reflects my office’s commitment to protecting Georgia taxpayers by uncovering Medicaid fraud and abuse.”

In addition to Pope, five other Pope McGlamry attorneys worked on the case: R. Timothy Morrison, Jay F. Hirsch, Kimberly J. Johnson, Caroline McGlamry and Wade “Trip” Tomlinson.

This story was originally published October 3, 2016 at 4:35 PM with the headline "Columbus law firm plays role in $513 million whistle-blower settlement."