4 Healthcare Whistleblowers Whose Stories You Should Know

Posted on February 11, 2021

Healthcare whistleblowers are more important than ever. The industry is poised to go through significant changes in the new administration, and it will be up to courageous nurses, doctors, coders, accountants, and other healthcare professionals to speak up if they see fraud at work.

Understanding the challenges of real-life whistleblowers can go a long way in helping healthcare workers set appropriate expectations. Whistleblowing is a very individual journey, but there are certain themes that can be expected to arise when reporting healthcare fraud. Here are four healthcare whistleblowers that made a positive impact on patients, taxpayers, and the industry as a whole.

1. The oncologist who saved patients from a deadly fraud scheme

In July 2013, Dr. Soe Maunglay had been working at Crittenton Cancer Center for about 11 months. Renowned Detroit oncologist Farid Fata was the owner of the largest oncology practice in the state, which included Crittenton.

Dr. Fata was thought to be extremely hard working. He was well respected in his field and had been educated at highly regarded medical facilities. There were some causes for concern, however.

Fata routinely disregarded professional standards such as requiring a physician to be present for all chemotherapy services. He was also known to prescribe particularly expensive forms of chemotherapy to his patients.

One day, Dr. Maunglay saw one of Fata’s patients who had been diagnosed with a rare, severe type of cancer. After feeling shocked by her diagnosis and terrified about the road ahead, this patient had received aggressive chemotherapy that caused her a serious injury. While examining the records of Fata’s patient for the first time, Dr. Maunglay realized that she didn’t even have cancer.

He started looking into the treatment of other Crittenton patients and saw that there was a recurring theme: Fata was falsely diagnosing patients with cancer and then administering expensive chemo to them. He informed the practice manager, George Karadsheh, and the two gathered diagnostic and treatment records to use as evidence. There was a clear discrepancy between patient symptoms and the treatments they were prescribed.

Karadsheh notified the FBI of the scheme. Shortly after, Fata was arrested and his clinic was shut down. It turned out that he had victimized over 500 patients with his scheme, causing severe injury and untimely death to many of them.

Fata’s scheme had been going on for years, and he was good at hiding it. Sadly, it is sometimes the most successful healthcare providers that are in the best position to hurt patients without scrutiny. If Dr. Maunglay hadn’t meticulously gathered evidence and spoken up to Karadsheh, even more patients could have been harmed.

Fata was sentenced to 45 years in prison in 2015. He was also ordered to pay back the tens of millions of dollars he stole from public insurance programs.

2. The pharma reps who exposed Johnson & Johnson’s illegal marketing tactics

When fraud schemes are perpetrated on a national level, it can take both impacted patients and whistleblowing employees to expose the fraudulent company. Though Johnson & Johnson built its image as a protector of families, the marketing tactics it used to promote anti-psychotic Risperdal did the exact opposite.

Risperdal was not originally approved for use in children or elderly patients with dementia, yet J&J aggressively marketed to those populations. Salespeople were dispatched to persuade nursing home staffers and child psychologists to prescribe the drug. Many of the young boys that took Risperdal developed breast tissue as a result and later had to undergo mastectomies.

In addition to the families who spoke out about their plight, several Johnson & Johnson employees blew the whistle on their employer. As is the case in many fraud schemes, the offenses were not committed by a few errant employees. They were encouraged from the very top of the company all the way down to the bottom.

After a long investigation, Johnson & Johnson pled guilty to the criminal charges and was forced to pay a $2.2 billion fine. The whistleblowers were rewarded substantially, which more was more than fair given the blacklisting that can take place for pharmaceutical salespeople who have blown the whistle.

3. The compliance officer who blew the whistle on Stark Law violations

The Stark Law, otherwise known as the Physician Self-Referral Law, makes it illegal for doctors with a financial interest in a “designated health service” to refer Medicare or Medicaid patients to that facility.

For example, if a doctor in a private practice also owns a radiology center, she would be prohibited from referring a Medicare patient for imaging at that facility. This law exists to prevent conflicts-of-interest from tainting public healthcare programs and to protect patients from doctors with unethical financial motives.

In 2009, Halifax Director of Physician Services Elin Baklid-Kunz filed a False Claims Act lawsuit based on Stark Law violations she allegedly witnessed at work. The hospital had apparently orchestrated a referral scheme where doctors were given enormous bonuses in exchange for their participation.

Baklin-Kunz previously worked as a compliance officer, so she knew that the actions she observed were against the law. She also alleged that neurosurgeons at Halifax facilities were being bribed to perform unnecessary procedures on patients.

The government intervened in her lawsuit in 2011, and Halifax allegedly retaliated against the whistleblower by taking away most of her professional responsibilities. Halifax also destroyed the patient records relevant to the lawsuit, though it was court-ordered to hand over those documents to the government.

Ultimately, Baklid-Kunz prevailed, winning a $20.8 million whistleblower reward. Though her life was forever changed, she was honored with Taxpayers Against Fraud’s “Whistleblower of the Year” award in 2014.

4. The whistleblower who went on to help other whistleblowers

In the ‘90’s, John Schilling was an accountant in the reimbursement department of national hospital chain Columbia/HCA. Columbia was, at the time, run by current Florida governor Rick Scott.

Schilling, who had access to the company’s financial records, discovered that Columbia was intentionally misleading the government about its Medicare-related finances. Specifically, it created internal and external cost reports that were completely different–the external ones showing, of course, much higher Medicare billings.

Schilling did what most whistleblowers do when they see something wrong: he tried to address the issue internally, and to no avail. He eventually decided to become a qui tam relator, and the investigation and litigation of his claims took over a decade to resolve.

Sure enough, Columbia had been fudging cost reports in multiple states. Rick Scott resigned from his post as CEO, the company paid around $1.7 billion fines and penalties back to the government. It was at that time the biggest healthcare fraud settlement to date, and it exemplified a turning point in the rampant healthcare fraud that plagued the ‘90’s.

Since his whistleblowing experience, Schilling has written a book called, Undercover: How I Went from Company Man to FBI Spy — and Exposed the Worst Healthcare Fraud in History. He is now a partner at a company that offers support and guidance to whistleblowers.

Weigh Your Options

Whistleblower lawsuits are fairly common in the healthcare sector. If you are a healthcare professional considering a qui tam lawsuit, it’s important to think about the big picture. Not only do your actions matter to taxpayers, but you could also be saving patient lives by blowing the whistle.

A great resource to hear more from whistleblowers themselves is The Whistleblower Interview Project. Learn more about healthcare fraud, waste, and abuse here.