A federal judge will decide next week whether payments should be made to whistle-blowers who expose improper government billings made by public medical schools in the United States.
The San Francisco judge will hold a hearing on 16 August to determine whether four whistle-blowers should share part of $22.5 million paid by the University of California to settle lawsuits alleging that government health-care programmes were overbilled by hospitals at the university's five medical schools.
The four women filed the lawsuits several years ago under the federal False Claims Act, which permits a whistle-blower to receive 15–25% of the funds the government recovers after exposure of fraud or abuse.
The lawsuits alleged fraudulent billing practices on behalf of University of California faculty, who may have been involved in research, consulting or other activities when they were supposed to be supervising patient care by training physician residents.
The case will be watched closely by researchers at US medical schools. A decision supporting continued close government scrutiny of billing practices will be viewed by some physicians as inhibiting their ability to conduct research. But some non-physician researchers may welcome such scrutiny, which they think serves to level the playing field for all researchers in the medical schools.
The US Department of Justice is asking the judge to deny payment to the whistle-blowers, who are seeking $4.5 million of the settlement money that the university paid earlier this year to the government.
If the judge decides the whistle-blowers should not receive a portion of the settlement, both sides agree that the decision could prevent any future false-claims lawsuits against public medical schools. Private universities are not affected by the case.
Stephen Meagher, a San Francisco attorney representing two of the whistle-blowers, says the government has turned its back on his clients after they exposed extensive improprieties at the university. “The government wants people to expose abuse,” he says. “But they don't want to pay them; it won't work.”
Federal attorneys say the government does not have to share the settlement with the whistle-blowers because of a US Supreme Court decision last year limiting False Claims Act lawsuits against public entities, such as state universities.
Government audits of a five-year period to 1998 found that more than $200 million in excess payments were made to the University of California medical schools, a university attorney said. But the university disputes the audit conclusions, and admitted no wrongdoing in agreeing to pay the $22.5 million.
Late last year, the government discussed a $1 million payment to the whistle-blowers, Meagher says, but halted negotiations shortly after the Republican administration of President George W. Bush took office. Some Republicans have voiced scepticism about rewarding whistle-blowers and their lawyers for exposing the misuse of public funds, but they have been unable to repeal the False Claims Act.
The Association of American Medical Colleges, which represents the medical schools, asserts that its members have been unfairly singled out for government audits.
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Dalton, R. Whistle-blowers wait for overbilling verdict. Nature 412, 574 (2001). https://doi.org/10.1038/35088197
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