Wheeling Hospital accuses a former executive of attempting to 'extort a settlement' and filing a False Claims Act suit as an act of revenge.
A West Virginia hospital has flipped the script and is countersuing a former-employee-turned-whistleblower who filed a false claims lawsuit against the hospital.
Wheeling Hospital Inc. has filed a lawsuit against Louis Longo, an accountant, former executive vice president at the health system, and a partner with Deloitte, claiming abuse of process and breach of fiduciary duty.
The hospital alleges that "at no time during his employment, or in his role as a partner at Deloitte, did Longo report any suspicions of fraud or violations of federal regulations to Wheeling Hospital's compliance officer."
"Longo owed Wheeling Hospital a fiduciary duty to refrain from threatening to bring false claims in an effort to extort a settlement," the hospital's suit reads.
Longo's whistleblower suit was taken up in March by the U.S. Department of Justice, which alleges that nonprofit Wheeling Hospital violated the Stark Law and Anti-Kickback Statute.
Those violations allegedly were caused by R & V Associates Ltd., Wheeling's contracted management consultant, and Wheeling CEO Ronald Violi, who the DOJ alleges had "dictatorial control" of the compensation agreements.
Wheeling Hospital has contested the allegations and vowed to fight the suit.
In its countersuit, filed in U.S. District Court for the Norther District of West Virginia, Wheeling Hospital described Longo as a bitter former executive looking to "extort a settlement" based on unwarranted claims that the health system paid kickbacks to physicians for referrals.
"The purpose of Longo's FCA Complaint is for Longo to obtain a pecuniary award and to inflict harm on Wheeling Hospital," the complaint read. "Indeed, based upon information and belief, Longo's FCA Complaint has been characterized by Longo and/or his associates as 'Lou's Revenge.'"
The hospital alleges that Longo approached Violi one month after Longo collected his last paycheck "and threatened that, according to his 'legal team,' he had some kind of case against Wheeling Hospital that could cost the hospital a lot of money unless Wheeling Hospital settled with him."
Wheeling Hospital said Longo's FCA complaint "falsely alleges that during Longo's employment at Wheeling Hospital, Wheeling Hospital 'defrauded...Medicare and Medicaid out of tens of millions of dollars of federal funds by paying certain physicians excessive compensation."
"The allegations in the Complaint are false and were made purposefully by Longo in an effort to receive a quick monetary settlement as a Relator," the suit alleges.
"In fact, in his capacity as a Relator, Longo failed to disclose key evidence to the government including, but not necessarily limited to, the results of a 2015 exempt organization audit conducted by the IRS in which physician compensation for the exact physicians named in his Complaint were reviewed."
Wheeling Hospital is seeking a judgement in excess of $75,000, along with punitive damages, attorneys' fees, court costs.
“The purpose of Longo's FCA Complaint is for Longo to obtain a pecuniary award and to inflict harm on Wheeling Hospital.”
Wheeling Hospital Inc., in its lawsuit.
John Commins is a senior editor at HealthLeaders.
Former Wheeling Hospital executive Louis Longo's whistleblower suit alleges that nonprofit hospital violated anti-kickback statutes by paying kickbacks to physicians for patient referrals.
In its countersuit, Wheeling Hospital described Longo as a bitter former executive who never reported any alleged violations during his time as a fiduciary.