Whistleblower of the Year Stands Up to Fraud at Florida Hospital

This past fall I was honored to sit at the same table as Elin Baklid-Kunz,
as she received the Whistleblower of the Year Award. Each year the
Taxpayers Against Fraud Education Fund holds an awards banquet, and recognizes a man or woman who has had the
integrity to stand up to fraud, despite the toll on relationships and
livelihood. Ms. Baklid-Kunz won this year for her courageous, years-long
battle to stop a Florida hospital from
violating the Stark Act.

Thanks to her tenacity, a Florida public hospital, Halifax Health, paid
the Government $85 million to settle allegations that it defrauded Medicare
by violating the Stark Act. Because she had filed a whistleblower lawsuit
under the False Claims Act, Baklid-Kunz received $20.8 million of the award.

Until recently, Elin Baklid-Kunz was the director of physician services
at Halifax Staffing; at one point she was also the hospital’s compliance
officer. According to Baklid-Kunz — and the Government, which intervened
in the case — Halifax was paying bonuses to medical oncologists
based on a percentage of their revenue minus expenses (more or less what
we think of as profit.) However, Halifax was beefing up those bonuses
by counting the hospital’s revenue from patients who were referred
by those oncologists. In other words, once the oncologist referred the
patient, the treatment the patient got at the hospital counted as if it
had been revenue for the doctor.

The oncologist could not bill Medicare or Medicaid for the other care,
because the oncologist was not providing it; instead, other doctors were
treating the patient, or pharmaceutical drugs were being sold to the patient
by the hospital’s pharmacy. Nonetheless, the hospital counted the
revenue from these other doctors and sources when it calculated the pool
for the oncologists’ bonuses. The bottom line, the court said, was
that a physician made money by referring patients to the hospital —
which is what the Stark Act seeks to stop.

DOJ issued a press release about the case,
Florida Hospital System Agrees to Pay the Government $85 million to Settle
Allegations of Improper Financial Relationships with Referring Physicians. Assistant Attorney General for the Justice Department’s Civil Division,
Stuart Delery, was quoted as saying that hospitals that compensate physicians
for referrals “encourage physicians to make decisions based on financial
gain rather than patient needs.” The result? “[T]the integrity
of our public health programs” is undermined, he said.

Baklid-Kunz gave a very moving speech about how it felt to be ignored and
then shunned in a job she had loved. She described what it felt like to
tell her boss that the bonus arrangement was illegal, but to be ignored.
Because she would not back down, she says the pressure on her grew. Other
employees became afraid to talk to her. She tried meeting one friend at
a lunch spot outside the hospital campus, but she says she was spotted,
and the friend was warned to stay away from Baklid-Kunz if she cared about
her job. Baklid-Kunz says she became isolated, and even former friends
would not speak to her.

Ms. Baklid-Kunz was represented by two good friends of mine, Marlan Wilbanks
and Susan Gouinlock. I also want to congratulate Marlan, who received
the well-deserved Whistleblower Lawyer of the Year award at the same banquet.

The Halifax case demonstrates that the Government will look beneath the
surface when it evaluates financial relationships between hospitals and
physicians. The hospital wasn’t forking over cash directly in order
to compensate the doctors for referring patients. But the Government concluded
that the hospital was accomplishing the same thing indirectly, in the
way it calculated the physicians’ bonuses.