Federal Court Denies ETMC Motion
Linnea Rose, the Athens woman who filed a whistle-blowers lawsuit against
East Texas Medical Center Regional Healthcare System and ETMC Athens in 2005,
has received favorable news from a federal judge in Marshall.
Judge T. John Ward of the Eastern District of Texas in Marshall denied the hospital the relief it sought against Rose and her joint action with the U.S. Government in a memorandum opinion and order. Such relief, had it been granted for ETMC, would have quashed Rose’s “whistle-blower” case. Her suit, in which she is the designated relator for the U.S. government, claims the U.S. was bilked out of millions of dollars in an ETMC Medicaid scheme also involving the Henderson County Hospital Authority.
Rose’s case is now expected to go trial, unless the two sides reach some kind of agreement first. At stake are millions of dollars, of which Rose would be entitled to a percent of any award usually between 15 to 30 percent, according to information provided by several que tam attorneys advertising on the Internet.
When any of this might occur, is uncertain. “All this means is that it will go from a procedural battle on the issue of jurisdiction to the regular litigation procedures that are the same as with any other kind of case we would have to comply with,” said ETMC attorney Dean Davis from his law office in Austin this week. “The discovery and pleading process and depositions will have to follow,” he said, indicating a court date might be several months, or a year away.
The Cedar Creek Pilot’s attempts to reach Rose’s attorneys in Dallas were unsuccessful, and Rose said when contacted that those same attorneys had advised her not to comment on the case. ETMC’s court action had asserted that Rose was not a valid whistle-blower because the information she used in filing her case, had already been heard in Authority Board discussions, which the hospital argued were administrative proceedings.
Rose had filed the lawsuit on June 8, 2005 under the Federal False Claims Act, alleging “intentional and systematic abuse of the federal Medicaid matching program by ETMCRHS and East Texas Medical Center, Athens.” “I’ve been so busy doing other things, I really haven’t gotten back into it,” Davis said earlier this week. “We’ll just have to take a look at where we are going and take it from there.”
The case was pending under seal for more than a year so federal authorities could decide whether or not to intervene. It was unsealed in February of this year. The action of the government and Rose is referred to as a "qui tam" action and is essentially asserting a claim on behalf of the federal government through Rose (the whistle-blower) against the ETMC system and ETMC Athens, which leases its facilities from Henderson County.
Specifically, Rose’s complaint accuses the Henderson County Hospital Authority of being a conduit for making an intergovernmental transfer of funds to the State of Texas which, in turn, allowed East Texas Regional Healthcare System to receive federal matching funds. The suit alleges the scheme was designed to obtain additional Medicaid matching funds from the feds.
Rose has said in the past that ETMC Athens received millions of dollars of federal Medicaid matching funds to which the hospital was not entitled. Davis was quoted in February in the Athens Daily Review as saying he considers the lawsuit to have no merit. “This is a frivolous lawsuit filed by the same people who continue to try to interfere with our relationship with the Authority Board,” Davis said in February.
He also maintained at the time the hospital was acting in accordance with the Texas Health and Human Services Commission’s regulations and recommendations made by the Texas Organization of Rural and Community Hospitals, a consultant for rural hospitals. But Rose’s attorneys have argued, the UPL program was adopted in Texas for urban public hospital districts in Harris, Tarrant, El Paso, Ector, Lubbock, Nueces, Travis and Bexar counties, and also for some public hospitals in rural counties. ETMCRHS, it argued, is a large hospital conglomerate that owns and operates at least 12 private hospital facilities in East Texas. Rose’ suit wants ETMCRHS and ETMC Athens to make full restitution of the funds it alleges were fraudulently obtained. The case now headed to trial will determine whether any or all of the additional Medicaid matching funds will have to be returned to the government.