Select Medical pays $3.5 million to settle Phillips & Cohen whistleblower case

INDIANAPOLIS, INDIANA, Oct. 16, 2019 – Select Medical Corp., affiliated entities and an Indiana doctor have agreed to pay $3.5 million to settle a “qui tam” lawsuit alleging Medicare and Medicaid fraud, which was filed by Phillips & Cohen on behalf of three whistleblowers.

The qui tam lawsuit alleged that Select, an operator of long-term acute care hospitals nationwide, manipulated the length of time its hospitals kept Medicare and Medicaid patients – keeping some patients longer than medically necessary and discharging others before treatment was complete – as a way to increase the hospitals’ revenues from government healthcare programs.

Dr. Richard Sloan, chief medical officer of Select Specialty Hospital in Evansville, Indiana, also was named as a defendant in the qui tam lawsuit. The settlement covers the charges against Dr. Sloan as well as Select.

Phillips & Cohen filed the qui tam lawsuit against Select and Dr. Sloan on behalf of the whistleblowers in federal district court in Indianapolis, Indiana, in 2012. The case was filed under seal as required under the False Claims Act. It was made public in 2013 after a judge lifted the seal when the government declined to intervene in the case.

“We thought our case against Select was strong, so we decided to pursue it on our own even though the government declined to join the case,” said Colette G. Matzzie, a whistleblower attorney and partner at Phillips & Cohen. “We are glad that we were able to recover significant healthcare funds on behalf of taxpayers.”

The qui tam lawsuit was filed under the federal False Claims Act, which protects and rewards whistleblowers who expose fraud against the government.

If the government declines to intervene in a qui tam lawsuit, the “relators” (whistleblowers) are allowed under the False Claims Act to litigate the case on their own. The relators in non-intervened cases are entitled to 25 percent to 30 percent of the amount they recover on behalf of the government.

In this case, the whistleblowers will receive 30 percent of the $3.5 million Select is paying the federal government to settle the fraud charges, plus $3.1 million to settle their employment claims and an additional amount for attorneys’ fees and expenses.

“The decision by the government to award our clients a 30 percent share of the recovery reflects the substantial effort our clients and their counsel put into this case,” Matzzie said.

The whistleblowers also were represented by Korein Tillery and Siesky Law Firm PC.


About Phillips & Cohen

Phillips & Cohen is the nation’s most successful law firm representing whistleblowers. The firm’s cases have helped federal, state and local governments recover more than $12.3 billion in civil settlements and criminal fines. Phillips & Cohen represents whistleblowers in qui tam lawsuits as well as cases brought under the whistleblower reward programs of the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Internal Revenue Service.


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