Healthways’ $40 Million Whistleblower Accord Approved
2009-05-26 22:04:40.863 GMT
By Laurence Viele Davidson and David Beasley
May 26 (Bloomberg) — Healthways Inc. will pay $40 million to end a lawsuit alleging the company’s Diabetes Treatment Center of America received kickbacks for paying doctors to send their patients to hospitals that are the unit’s clients.
The Department of Justice approved the settlement on May 21, said lawyers in the case. The unit’s hospital customers paid “management fees” so patients would be steered their way, according to a whistleblower suit filed by Scott Pogue, who was dismissed from the company. The unit paid doctors to admit patients to the hospitals, which in turn paid the company, the suit said.
Pogue claimed in the federal suit that because the patients were covered by Medicare, the company was taking money from the federal government each time Diabetes Treatment Center paid a doctor and in return received money from the hospital. He filed the case on behalf of the U.S., and the DOJ declined to join the case.
“Now the taxpayers are not financially supporting” Diabetes Treatment Center, said Pogue’s lawyer, Scott Powell of Hare, Wynn Newell & Newton LLP, in Birmingham, Alabama.
The government will get $28 million from the settlement. Pogue will receive as much as $8.4 million from the government’s share, his attorneys said. The remaining $12 million goes to legal fees, according to his lawyers.
Bruce Middlebrooks, spokesman for Nashville, Tennessee-based Healthways, didn’t return a phone call or an e-mail seeking comment. Charles Miller, a DOJ spokesman, confirmed the department’s approval of the accord.
Healthways rose 26 cents to $11.97 at the close of Nasdaq Stock Market trading.
The case is U.S. v. American Healthcorp Inc., 94-cv-00515, U.S. District Court, Middle District of Tennessee (Nashville).
Other articles about the settlement:
Birmingham law firm Hare Wynn Newell & Newton has won $40 million settlement alleging health payola by HealthWays Inc.
Thursday, May 28, 2009
The Birmingham law firm Hare Wynn Newell & Newton has won a $40 million settlement to end a whistleblower lawsuit alleging a health care payola and kickback scheme.
A former employee of Nashville-based HealthWays Inc. filed the suit, saying patients of the company’s Diabetes Treatment Center unit were covered by Medicare. The payola arrangement between doctors, HealthWays and hospitals containing a Diabetes Treatment Center unit equaled taking money from the federal government, the suit said.
The government will get $28 million from the settlement agreed to by HealthWays. The former employee will get much as $8.4 million from the government’s share. The remaining $12 million will go for legal fees.
Alabama attorneys on $40 million settlement team
May 28, 2009
The company agreed to the settlement 15 years after a former employee, Scott Pogue, filed suit alleging he was fired in retaliation for corporate whistle blowing.
Pogue had accused the company of running a kickback scheme through its subsidiary Diabetes Treatment Centers of America.
The attorneys, who work for Hare, Wynn, Newell & Newton, joined the case in 2002.