Ex-Cox doc files whistleblower suit against hospital

A Springfield pediatrician who claims CoxHealth fired him two years ago for reporting concerns about the hospital's billing procedures to federal authorities is now suing his former employer.

Dr. Frederick Faust has accused the Springfield-based not-for-profit health system of discharging him as retribution for acting as a whistleblower, according to a suit filed in U.S. District Court earlier this month.

Faust claims in the suit that he approached the U.S. Attorney's Office in April 2007 to report "allegations of Medicaid fraud, false billing to private insurance companies, and misuse of vaccine provided to Cox by the Vaccines for Children program." CoxHealth terminated his contract - slated to run through September 2008 - three months later, court records show. Faust has alleged in the suit that the hospital officials who fired him knew he had gone to authorities.

In July 2008, Cox agreed to a $60 million settlement with the U.S. Department of Justice to resolve allegations it committed errors in Medicare billing and contracted physician agreements, but a hospital spokeswoman said Faust's firing had nothing to with the investigation.

"This is an employment lawsuit and is not related to the government investigation which was settled a year ago," Vice President of Corporate Communications Laurie Cunningham said in an e-mail. "The allegations are completely unfounded, and we look forward to vigorously defending ourselves in court."

Digging into the dispute

Faust joined Cox in October 2003 and renewed his contract with the hospital in March 2006. About a year after losing his job, Faust joined Ozarks Community Hospital and now works out of the OCH North Pediatrics Clinic on West Kearney Street.

Faust referred questions about the lawsuit to Springfield attorney Eric Jensen, of the Law Firm of O'Reilly & Jensen LLC. Jensen declined to comment.

Court records, however, clearly spell out his grievances.

Faust has alleged in the suit that Cox violated the federal False Claims Act by submitting false claims for payment to state and federal governments. Under the law, someone with knowledge of fraud against the U.S. government may file a lawsuit on the government's behalf against the person or business that committed the fraud. And whistleblowers fired for reporting fraud are entitled to reinstatement and damages equal to double the amount of lost wages - two legal remedies Faust is pursuing.

Cox was hit with a similar lawsuit in June 2005 by former employees Roger Cochran and Dennis Morris, who also claimed they were fired for talking to federal investigators. Cochran and Morris, who managed the Cox-owned Ozarks Dialysis Services, claimed in their suit that they lost their jobs after taking concerns about potentially unlawful Medicare billing practices to authorities. The case was dismissed with prejudice in December - a sign that the parties likely reached an out-of-court settlement. For the duration of the litigation, Cox defended its decision to fire Cochran and Morris as "fully warranted and properly handled."

Faust, who has requested a jury trial, is seeking a judgment for double his lost wages and benefits as well as compensatory and punitive damages. He also has asked to be reinstated as pediatrician and medical director of Cox's Northside Pediatrics and Adolescents Clinic - the position he held prior to July 2007.

Faust is a board-certified pediatrician who received his medical degree from Case Western Reserve University School of Medicine and has been practicing medicine for more than 11 years, according to an OCH news release from June 2008.

Whistleblower protections

Workplace whistleblowers who aren't protected by the False Claims Act may find statutory shelter via the Sarbanes-Oxley Act or the Civil Rights Act, said Wes Scroggins, an associate professor of management at Missouri State University.

Scroggins said Sarbanes-Oxley, which primarily applies to publicly traded companies, protects employees who provide information to law enforcement, government agencies conducting inquiries or members of Congress. He also cited the Civil Rights Act of 1991, which considers retaliation against employees a form of discrimination.

Retaliation charges filed with the U.S. Equal Employment Opportunity Commission in fiscal 2008 accounted for 34 percent of all discrimination charges, second only to charges of racial discrimination.

"Unfortunately, it does happen," Scroggins said. "You do get employers that do retaliate against employees for blowing the whistle. That is one of the reasons maybe more employees don't do it."

While it's true that anyone can file a lawsuit, employers looking to reduce their legal liability should implement organizational policies that comply with state and federal employment law, Scroggins said. Those policies should be clearly communicated to employees, and employers should emphasize that those who report suspected wrongdoing won't face retaliation, he added.

Cunningham at Cox said by e-mail that the hospital's policy covers both issues.

"No member of CoxHealth who reports a compliance issue will be subject to disciplinary action or punished in any way for making a report," she wrote. "All new employees are educated about this policy when they join our team, and existing members of our team are reminded of this policy during their annual reorientation."

Scroggins' best advice, though, has little to do with legality: "I think the lesson is management needs to be ethical if you want to avoid these problems. You do what you know is right to begin with. And if you do that, then you don't have to worry about these kinds of things coming back to haunt you later."

Scroggins' employer, MSU, modified its whistleblower policy in 2007 by hiring a third-party vendor to handle anonymous reports of unethical or illegal activity. The university pays Portland, Ore.-based EthicsPoint Inc. about $4,000 a year to maintain a Web portal and hotline available to students and MSU employees who wish to lodge anonymous complaints.

MSU Internal Audit Director June McHaney said EthicsPoint creates a report for each complaint that is then forwarded to her office and the office of General Counsel Clif Smart. Those departments then follow up with the appropriate university officials, she said.

McHaney declined to say how many reports had been generated to date, but she said the reporting system has been a well-utilized, worthwhile investment.

"I was real pleased with the university's decision to utilize the hotline program because one of our key goals is modeling ethical and effective behavior, and this is another demonstration of that," she said.[[In-content Ad]]