Judith King, a registered nurse, was a heart transplant coordinator at Sharp Memorial Hospital in San Diego. Phillips & Cohen brought a qui tam lawsuit against her employer on her behalf, alleging the hospital had defrauded Medicare by filing fraudulent claims for reimbursement for costs associated with its heart and kidney transplant centers. Sharp agreed in March 2003 to pay $6.2 million to the federal government to settle the qui tam case. Below is an excerpt from a story about King that ran in the Report on Medicare Compliance (3/13/03).

Nurse turned whistleblower alleges hospital manipulated cost-report logs

Apparently the reimbursement savvy of Sharp Memorial Hospital heart transplant coordinator Judith King was wildly underestimated, because when she raised concerns to her superiors about Medicare cost-report misallocations, she was brushed aside. Reimbursement rules are very complex, the veteran RN, was told, and you wouldn’t understand.

But King understood plenty. She’d attended lots of transplant conferences, which have their share of sessions on regulations and reimbursements, and kept her eyes and ears open. King was aware of a fundamental rule in the world of Medicare reimbursement as it applied to her transplant center: Medicare pays hospitals a DRG for transplants and follow-up care, so hospitals can bill additional fees only for certain pre-transplant services. She didn’t need an MBA to know the hospital allegedly was violating Medicare rules when it recouped 100 percent of the salaries of nurses and social workers even though they spent only a portion of their time on pre-transplant services.

Eventually King got fed up with the alleged cost-report shenanigans and management’s refusal to correct them. She became a whistleblower and sued her San Diego employer under the False Claims Act, alleging cost-report fraud. The Justice Department took over the case. Sharp agreed to settle the false claims case last week for $6.2 million, though it denies wrongdoing. King, who has worked at the hospital for more than two decades, and her lawyers will collect $1.2 million of the settlement for their role in the case.

To get a copy of the entire story, please contact the Report on Medicare Compliance at www.AISHealth.com.

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