Government Joins Whistleblower Case Alleging Six Health Systems and Medical Centers Defrauded the Department of Defense

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DOJ Joins Whistleblower Lawsuit Against Major Health Systems

Washington, DC—The U.S. Department of Justice (DOJ) today joined a newly unsealed whistleblower lawsuit filed by Phillips & Cohen LLP that alleges six health systems and medical centers, and the alliance they established, defrauded the Department of Defense out of hundreds of millions of dollars intended to provide health care to military retirees by retaining payments they knew the government paid in error. 

Defendants Named in Healthcare Fraud Case

 The defendants are Johns Hopkins Medical Services Corporation, based in Maryland; Martin’s Point Health Care, based in Maine; St. Vincent’s Catholic Medical Centers of New York, based in New York; Brighton Marine Health Center, based in Massachusetts; Pacific Medical Center, based in Washington state; CHRISTUS Health Services, based in Texas; and the U.S. Family Health Plan Alliance, based in Washington, D.C., the alliance formed by defendants to collectively negotiate with the Department of Defense (DOD). 


“The government, after methodically and thoroughly investigating our clients’ allegations, intervened in our case today,” said Amy Easton, a partner and whistleblower attorney at Phillips & Cohen. “We are fortunate to have such a strong team of DOJ lawyers pursuing this case.”

Background of the Alleged Healthcare Fraud

 The alleged fraud involved a unique government health program established by Congress in 1994, the Uniformed Services Family Health Plan (USFHP), which entrusted the defendant health systems and medical centers to provide healthcare to more than 100,000 military personnel, retirees and their families, in 17 states, enrolled in the plan. 


DOD payments to the healthcare defendants were pursuant to an agreed-upon formula which was based on many factors, including patients’ previous diagnoses. The “qui tam” (whistleblower) lawsuit alleges that unbeknownst to DOD, from 2008 until 2012, a government contractor made two significant errors in calculating payments under the formula. These errors made patients appear sicker than they really were, causing DOD to pay the healthcare defendants hundreds of millions of dollars more than they were entitled to. 

Legal Response and Whistleblower Involvement

 “The lawsuit alleges that the defendants were aware of these significant errors but chose not disclose the impact of the errors to the government despite their obligation to do so.  The Supreme Court’s century-old statement that ‘Men must turn square corners when they deal with the Government,’ certainly comes to mind,” said Jeffrey Dickstein, a whistleblower attorney and a Phillips & Cohen partner. 


This was in stark contrast to the way defendants disclosed other government errors to DOD – although none of those errors resulted in the enormous windfall that these errors did, the lawsuit alleges.         

Whistleblowers’ Courage and the Path to Justice

Phillips & Cohen LLP filed the qui tam lawsuit alleging violations of the federal False Claims Act on behalf of whistleblowers Jane Rollinson, a former interim Chief Financial Officer of Martin’s Point Healthcare, and Daniel Gregorie, a former member of Martin’s Point Healthcare’s Board of Trustees.  The lawsuit was filed under seal in federal district court in 2016, meaning it was not publicly available, as required by the False Claims Act to give the government time to investigate. The court unsealed the qui tam complaint today.


“Ms. Rollinson and Dr. Gregorie thought it was important that DOD healthcare funds were used for healthcare for military families in accordance with the rules,” said Emily Stabile, a partner and whistleblower attorney at Phillips & Cohen. “We are proud to represent Ms. Rollinson and Dr. Gregorie, who had the courage to speak up about this important matter.”


The False Claims Act allows private citizens who know of entities and individuals defrauding the federal government to file lawsuits against them and recover funds on the government’s behalf. The law offers whistleblowers protection against job retaliation and rewards for their information and assistance. When the government joins a qui tam case, whistleblowers are entitled to 15 percent to 25 percent of the recovery.

James B. Haddow of the firm Petruccelli, Martin & Haddow, LLP in Portland, Maine serves as local counsel in this lawsuit.


The qui tam complaint is: 

United States ex rel. Rollinson et al. v. Martin’s Point Health Care et al.  

Case No. 2:16-cv-00447-NT (D. Me. 2016). 

Complaint in intervention.

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