Undercover: How I Went from Company Man to FBI Spy--And Exposed the Worst Healthcare Fraud in U.S. History

By John W. Schilling | Go to book overview

CHAPTER TWENTY-FOUR
Battling the Justice
Department

After the KPMG settlement was consummated, Stephen Meagher reminded me of the warning he had given me years before. He'd said that in the end, my toughest battle could be against the Justice Department. I hadn't taken his admonition to heart after the years I'd invested in educating, developing, and wholeheartedly assisting federal prosecutors and investigators. It was very disturbing and ironic to realize that government resources that should have been directed to fighting fraud were now being spent contesting my relator's share.

Quorum Health Group, the HCA hospital management company spinoff that had fired Alderson ten years earlier for refusing to participate in the company's dual cost report scheme, continued to vehemently deny wrongdoing. Like the Columbia/HCA lawsuit, Alderson's Quorum suit alleged that the company included costs that were not reimbursable by Medicare when filing its annual cost reports. Quorum routinely kept a reserve or dual cost report that specifically identified the improper claims so the funds would be readily available if Medicare auditors ever discovered the improper claims.

But on October 2, 2000—ten years after his battle began with Quorum—Jim Alderson's persistence finally paid off. Quorum announced the settlement it had agreed to three months earlier after lengthy mediations with the Justice Department. Alderson and his Phillips & Cohen attorneys had worked diligently for years against enormous odds, sometimes even

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