| James F. Alderson was a financial officer with a Montana hospital
when he was told that the hospital's management company routinely filed fraudulent cost
reports with Medicare. He was fired after he refused to file "aggressive" claims
that the company knew were not reimbursable. His False Claims Act lawsuit against that
company -- Quorum Health Resources Inc. -- and Columbia/HCA Healthcare Corp. helped lead
to the largest government investigation of Medicare fraud ever. The Justice Department
joined the qui tam lawsuit in October 1998. Below is an excerpt from a story about
Alderson by Kurt Eichenwald that appeared in The New York Times on Oct. 18, 1998.
("He blew the whistle, and health giants quaked.") James F. Alderson
maneuvered his nine-year-old Ford Tempo through the snow, parking beside the Federal
courthouse in Butte, Mont. Mr. Alderson, a small-town hospital accountant, left the heat
on, telling his wife, Connie, to wait in the car. He was sure it would only take a moment
to file his lawsuit on behalf of the United States, charging four giant hospital companies
with fraud.
For years before that January morning in 1993, Mr. Alderson stewed with the belief that
the companies -- the huge Hospital Corporation of America and three of its corporate
spinoffs -- had cheated the Government with bogus expense claims. While working at a
Montana hospital run by one of those companies, Mr. Alderson himself had been asked to
create a second set of books recording different expenses than those reported to the
Government. He had refused, saying it was unethical.
Then his world fell apart. Mr. Alderson was forced out of his job. No longer able to
afford the comfortable life of his resort hometown of Whitefish, his family moved to a
cramped apartment in rural Montana. Some college savings for his two teen-age children
were eaten up. His career in hospital financial management seemed to be dwindling to an
uncertain end.
Yet, he could not let go of his anger at the hospital giants for actions he felt sure
were illegal. So when a friend described the Federal whistle-blower law that allows
private citizens to file fraud actions on behalf of the United States, Mr. Alderson
decided to act, drafting his own lawsuit against the companies and then making this drive
to Butte to file it under seal in court. . . . The filing of his lawsuit -- known as a qui
tam, or false claims, case -- was the flash point for an almost six-year legal battle, one
that led to criminal and civil investigations that have rocked the entire hospital
industry.
Those efforts culminated this month with the unsealing of Mr. Alderson's lawsuit and
the announcement by the Government that it was
joining him as a plaintiff against the Columbia/HCA Healthcare Corporation and the Quorum
Health Group -- the corporate defendants that emerged from years of industry
consolidation.
Lost amid the tumult was the story of Mr. Alderson, now 52.
. . . "Here, a discovery made by one man at a small rural hospital ultimately
unraveled a nationwide, systemwide scheme," Stephen Meagher, a former prosecutor [now
with Phillips & Cohen] who was eventually hired by Mr. Alderson to handle the case.
"It shows how one person can truly make a difference."
To read the entire story, which provides details of James Alderson's
pursuit of the case, his difficulty convincing the government to join the lawsuit and the
role Phillips & Cohen played in "putting new life in the case," (as The
New York Times put it), see The New York Times, Oct. 18, 1998, Money &
Business section, p. 1. A copy of the story may be obtained from The New York Times for a small fee. |
