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Minnesota Hospital to Pay $846K to Settle Whistleblower Suit

John Commins, for HealthLeaders Media, January 5, 2010

Wheaton Community Hospital, the City of Wheaton, MN, and a physician at the hospital will pay $846,461 to settle whistleblower allegations that the hospital's admission practices violated the False Claims Act, the U.S. Justice Department said.

The government charged that from 1998 to 2004, WCH admitted some patients and kept others admitted to acute care when doing so was not medically necessary. The defendants then billed Medicare for the cost of these admissions, according to the DOJ.

The allegations against WCH arose from a whistleblower lawsuit filed in federal court in Minnesota. Whistleblower Steven Radjenovich, MD, formerly practiced at Wheaton Community Hospital with Stanley Gallagher, MD, a codefendant named in the settlement. Radjenovich will receive $203,150 as his share of the settlement.

Jesse G. Tisher, administrator/CEO at WCH, issued a statement Wednesday that said the tiny hospital with an active staff of four physicians, and 11 RNs, and an average daily census of five patients, was "pleased to have settled a lawsuit with the federal government without an admission of liability."

"The federal government's own reimbursement rules for hospitals like Wheaton Community Hospital are different to help ensure critical access hospital expenses are covered no matter what the number of patients served. The reimbursement rules do not encourage us to allow unnecessary admissions. Our expenses are subject to regular audit," Tisher said.

"In the end, the continued costs of litigation would have been more expensive than settlement. Wheaton Community Hospital determined that our time and effort was best spent providing quality healthcare to our patients and the medically underserved population surrounding us. We are committed to keeping our doors open to serve patients in need," Tisher said.


John Commins is a senior editor with HealthLeaders Media.

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