Mercyhealth's former VP, accomplice hit with fraud, tax charges following $3M kickback scheme

The Department of Justice has announced charges against a Mercyhealth marketing and public affairs executive who was fired by the system due to her alleged involvement in a $3 million kickback scheme. 

Former Mercyhealth Vice President Barb Bortner was charged Wednesday with wire fraud and tax evasion, according to the department's notice.

Ryan Weckerly, the owner of marketing agency Morningstar Media Group, with whom Bortner allegedly conspired, has also been charged with wire fraud and with aiding and abetting in the preparation of a false income tax return.

Both Bortner and Weckerly have agreed to plead guilty to the charges, according to the department

Bortner had been employed at the health system for more than 30 years prior to her termination, according to a mid-August staff memo from Mercyhealth CEO Javon Bea that was shared with Fierce Healthcare. In addition to her removal from the health system, Bortner has also been fired from her staff position at the Mercyhealth Development Foundation, its philanthropic arm.

“Our patients and the communities we serve expect us to conduct our business affairs with the highest degree of integrity,” Bea wrote in the memo provided by the system. “We are all deeply saddened and disappointed that a member of our team has betrayed that trust.”

While Bea's staff memo did not name the vendor or a time frame for the scheme, the Department of Justice's announcement said that the arrangement began in February 2015 and lasted until June 2020. 

Per the announcement, Weckerly allegedly submitted inflated invoices to Bortner for marketing work. Bortner allegedly agreed to rely on Weckerly's company as Mercyhealth's primary marketing agency and in return, received kickbacks funded by the improper invoices.

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Bea wrote in the memo that the scheme did not appear to touch the system’s medical supplies or impact the care of its patients, he wrote.

He said that Mercyhealth is cutting ties with the marketing company. The system is also looking to recover the $3 million wrapped up in the scheme and has hired a third party to review its internal financial controls, he said. 

"Our financial statements and internal control procedures are audited annually by an outside accounting firm," Bea wrote in the memo. "Nonetheless, we are engaging an audit and consulting firm to assist with a comprehensive review of our vendor management and invoicing procedures. We will take all actions necessary to improve the Mercyhealth procedures."

The charges against Bortner and Weckerly are the result of an IRS investigation. A date for their plea hearings has not yet been scheduled. 

Mercyhealth is comprised of seven hospitals and 85 primary and specialty care locations across northern Illinois and southern Wisconsin. Its business spans four core services—hospitals, clinics, post-acute care and retail—and includes a wholly-owned insurance company.