"60 Minutes" features story on Columbia whistleblower

The award-winning television news magazine show, "60 Minutes," featured on Dec. 27, 1998 a story on whistleblower James F. Alderson and his qui tam lawsuit against Columbia/HCA Healthcare Corp. and Quorum Health Resources Inc.

Correspondent Mike Wallace called it a "Goliath story," and possibly one of the largest cases of Medicare fraud ever. He described it as a "story of one lone hospital accountant from Whitefish, Montana, James Alderson, who blew the whistle on the hospital giant Columbia/HCA for allegedly cooking their books."

Alderson is represented by Phillips & Cohen. He charges in his complaint that Columbia hospitals throughout the United States and those managed by Quorum routinely made false claims in annual "cost reports" filed with Medicare to increase their reimbursements. Analysts have estimated that Columbia could face billions of dollars in liability as a result of the government's investigation into its Medicare billing practices. ( See " Government's probe of Columbia/HCA prompted by qui tam lawsuit." )

Among those Wallace interviewed were Alderson, attorney Stephen Meagher of Phillips & Cohen and Rep. Fortney "Pete" Stark, D-Calif.

"This was not a case of honest disagreement about gray areas (of Medicare billing)," said Meagher. "This was a case about systematic and persistent false claims submitted to the government year after year."

When he filed his lawsuit under the False Claims Act in 1993, Alderson said, "I knew I was up against some big odds." But he persisted, and with the help of his attorneys, convinced the Justice Department to join the case. The government filed a notice of intervention in October 1998.

Alderson had a "solid and core belief that this was wrong and a determination to do something about it," said Meagher. "It's a truly amazing example of how one man can make a difference."

In a related development, on Dec. 30, the Justice Dept. intervened in a second whistleblower lawsuit against Columbia brought by John Schilling. Schilling, a former reimbursement manager for Columbia in Florida, also is represented by Phillips & Cohen.

Four mid-level Columbia executives have been indicted on criminal charges in Florida largely as a result of evidence provided to the government by Schilling.

People who work for health care providers should take heed of this case, Stark said on 60 Minutes. "I want everybody in the business to think about it and think, 'Boy, I could be on the side of the good guys and win, or I could play with the bad guys and go to jail.' "