Whistle-blower filed qui tam in Columbia/HCA suit

Perhaps the most important lesson from the recent allegations against Columbia/HCA and Quorum is the power of the little guy: Everywhere throughout your institution are hundreds or thousands of people who each have the power to bring the full force of a federal investigation against you.

Remember that when you ask them to do things that might not be quite proper.

The allegations of keeping a double set of accounting books — one showing the true costs of care and one showing the inflated costs reported for reimbursement — all flowed from the qui tam lawsuit filed by James Alderson, a hospital accountant once employed at North Valley Hospital in Butte, MT.

Alderson claims that after the hospital was acquired by Quorum (a spinoff of Columbia/HCA) in 1990, he was instructed to create two sets of books. He refused, saying that two cost reports would be fraudulent and violate his code of ethics as an accountant.

Soon after, Alderson was fired. He filed a wrongful termination suit, and in the process, obtained copies of cost reports and reserve reports from Quorum. Alderson contacted the Justice Department in 1992 to advise that he was going to file a whistle-blower lawsuit alleging fraud and then filed suit in January 1993. The government immediately began demanding documents from the companies.

Identity just revealed

Alderson’s complaint and the documents obtained in the subsequent investigation played a major role in the feds’ much ballyhooed investigation of Columbia/HCA over the past couple of years, and it was a major impetus for the July 16, 1997, raid on Columbia/HCA facilities.

Alderson’s identity and motivation were not known until the government unsealed his complaint on Oct. 5, 1998, and announced the lawsuit against the companies.