Whistleblowers Recover $3.7 Million from Adventist Health System in Medicaid Fraud Case

Whistleblower News Review

Adventist Health System will pay four US states over $3.7 million in a Medicaid False Claims Act case brought forth by whistleblowers Michael Payne, Gloria Pryor, and Melissa Church according to this news article in Whistleblower News Review. The settlement represents a further financial blow to Adventist Health, after it was forced to pay the Federal Government $115 million in connection with related allegations.

Medicaid Billing & Kickback Fraud Alleged in FL, NC, TN and TX

According to the lawsuit filed by the three former Adventist employees and a fourth whistleblower, Sherry Dorsey, who joined after the suit was in progress, Adventist Health System offered extravagant bonuses and rewards to physicians who referred patients within Adventist Health´s own network and ordered tests from the nonprofit healthcare provider´s labs. Medicaid was later billed millions of dollars for these services in the states of Florida, North Carolina, Tennessee, and Texas.

Adventist Health Physicians allegedly received luxury car leases, six-figure bonuses, and other incentives for the fraudulent self-referrals, which were in violation of Stark laws. The whistleblowers claimed they observed these unlawful practices and only proceeded to file the False Claims Act lawsuit when it was clear that their employer would not put an end to them voluntarily.

Whistleblower Sherry Dorsey was a corporate vice president at Adventist Health. One of her responsibilities was monitoring physician compensation. When she found several irregularities in the way the system rewarded doctors for referring patients to other Adventist hospitals, she felt “unwilling to stick her head in the sand and ignore the illegal schemes that impacted hundreds of physicians across the United States who were illegally paid to generate government money for Adventist," according to her legal representative.

Corporate VP, Risk Manager, Compliance Officer & Director Whistleblowers

Her fellow whistleblowers were also in positions where it was possible to observe Adventist´s dubious kickback scheme. Payne was a risk manager, Church was an executive director of of physician services, and Pryor was a compliance officer for physician offices. The three Adventist employees were based out of Park Ridge Health in Hendersonville, North Carolina. According to their legal representatives, they “went through internal channels at the hospital to get their concerns about deals with doctors and improper billing practices addressed for several years," but to no avail.  

Whistleblowers Eligible for Up to 30% Reward on Recovery

Adventist Health will repay $3.48 million to the State of Florida, $198,453 to the State of North Carolina, $66,897 to Tennessee, and $4,711 to Texas in connection with the alleged fraudulent Medicaid billing. The whistleblowers will receive up to 30 percent of the recovery as provided for in the various state False Claims Acts. The exact amount of the reward remains undisclosed at this time.

Florida´s Attorney General Pam Bondi expressed her satisfaction with the settlement. “Adventist maintained improper financial relationships with physicians and submitted claims to Florida Medicaid for services and items the physicians referred. The settlement resolves claims that Adventist submitted false Medicaid claims and awarded referring doctors based on the number of tests and procedures the doctors ordered,” said Bondi.

North Carolina´s Attorney General Roy Cooper was emphatic regarding the importance of the outcome of the settlement: “Cheating Medicaid wastes tax dollars and harms patients in need of medical care. Our investigators and attorneys will continue their work to root out fraud and abuse in the healthcare system.”


Medicaid Fraud Hotline: 888.742.7248 or Report Online