Ex-CCO Wins $12M Whistleblower Bounty

The former chief compliance officer of the largest hospital system in Delaware is set to receive a $12.1 million whistleblower award as his share of a False Claims Act settlement against his former employer. 

Ronald Sherman was chief compliance officer of ChristianaCare from 2007 to 2014, when he was fired and escorted out of the building supposedly for investigating concerns about the hospital system overcharging the U.S. government for the services of its neonatology unit. Sherman then filed a False Claims Act lawsuit against ChristianaCare in 2017, and the hospital chain agreed last week to pay $47.1 million to settle the case. 

After the U.S. and Delaware state governments get their reimbursements, as well as attorneys’ fees, Sherman’s share is $12.1 million, according to a statement from his lawyers. 

Radical Compliance last addressed Sherman’s case in 2019, as an example of retaliation against audit and compliance professionals simply for trying to do their jobs. We congratulate him now for his victory — but before anyone makes any quips about Sherman picking up the bar tab at the next compliance conference, we must also remember that Sherman went through a tremendous ordeal. What he did took guts. Everyone from the overcharged U.S. taxpayer to other compliance officers in similar situations, wondering whether they’re doing the right thing, owes him a debt of thanks. 

As to the misconduct itself, Sherman accused ChristianaCare of providing free nurses and other medical employees to a private medical practice, Neonatology Associates. Those neonatal specialists then billed the U.S. government for the cost of those support services. In exchange, the specialists then recommended ChristianaCare to their patients. That is a violation of the Anti-Kickback Statute and the False Claims Act.

“At ChristianaCare, we alleged that services performed by mid-level providers were billed for by private attending physicians who were in a position to make future referrals to the hospital. Put differently, we alleged that ChristianaCare paid kickbacks to the private physicians in the form of free employees,” said Dan Miller, Sherman’s lawyer and a partner at the law firm Walden Macht & Haran.

ChristianaCare had not made a statement about the settlement as of this Tuesday. 

One question now is whether other hospitals might face similar False Claims Act lawsuits for similar arrangements they might’ve made in their own operations. Miller hinted that this settlement was “the first in a series of cases which are likely to be brought against other hospitals across the United States.”

Let’s just hope those future cases don’t include whistleblower retaliation allegations, against compliance officers or anyone else.