Qui tam: 15-bed hospital agrees to $846,000 whistleblower settlement

A country doctor and the small, community-owned hospital he serves have agreed to pay the federal government more than $846,000 to settle allegations that they needlessly admitted Medicare patients and kept them longer than necessary between 1998 and 2004, the U.S. Department of Justice announced Jan. 4.

Dr. Stanley Gallagher and Wheaton (Minn.) Community Hospital admitted no wrong-doing, but said they agreed to settle to avoid a lengthy and costly legal battle, the Star Tribune reports. In all, the hospital will pay $563,461 toward the settlement and $469,539 in legal fees. Gallagher will pay $283,000. Steven Radjenovich, a physician who formerly practiced at the hospital, will collect $203,150 as part of the qui tam settlement.

Jesse Tischer, Wheaton's CEO, disputed the charges and alluded to a personality clash between Gallagher and Radjenovich. "It was well known within the community that the two had difficulties relating to one another," he told the Star Tribune. Radjenovich declined to comment.

The case hinged on 170 randomly selected patient records. The DoJ cited three cases in particular, including one in which an elderly patient was admitted for six days due to pain. He received only oral pain meds and physical therapy, prompting the government to determine that the lengthy stay was unnecessary.

The Wheaton case comes on the heels of the DoJ's Dec. 22 announcement that Tulsa, Okla.-based St. John Health System agreed to pay $13.2 million for allegedly paying kickbacks to physicians. Interestingly, that resulted from the hospital's own disclosure that its physician agreements may have run afoul of federal law.  

To learn more:
- read the DoJ press release
- read the Star Tribune article