A former top executive at Community Health Network who claims he was fired in retaliation for raising concerns about an alleged fraudulent scheme to keep patients in the network will be allowed to pursue his case in federal court.
U.S. District Judge Richard Young this week threw out most of Community Health’s motion to dismiss a lawsuit brought by Thomas Fischer, who served as the hospital system’s chief financial officer for eight years before he was fired in 2013.
Young noted that both federal and Indiana laws prohibit retaliating against those who report violations of the False Claims Act. The law makes it a crime to file a false claim and defraud any federal health care program.
Fischer had “raised concerns about and objected to potential illegalities related to physician compensation levels” before he was fired on Nov. 28, 2013, Young wrote.
Fischer had pressed his superiors, including CEO Bryan Mills, over the high salaries and bonuses paid to physicians as the hospital system was trying to cut tens of millions of dollars’ worth of expenses and was laying off employees.
Mills first shifted Fischer to the position of chief operating officer and said he would search for someone to replace him as chief financial officer.
“Mills did not provide a reason for his decision but implied that he expected (Fischer) to be a team player and to stop asking questions about the legality of the physician contracts,” Young wrote.
Less than two months later, Fischer was fired.
Community Health on Friday to declined to comment about Fischer’s lawsuit or the judge’s ruling.
“While we are unable to comment specifically on pending litigation, Community is committed to upholding the highest regulatory and ethical standards in all our business practices. We are confident we have operated and continue to operate in a legally compliant manner,” the hospital system said in a statement.
It was the second legal setback in less than a month for Community Health. On Oct. 26, Young also threw out the hospital system’s motion to dismiss a lawsuit brought by the U.S. Justice Department in the matter.
The federal government last year filed a False Claims Act lawsuit against the hospital system, saying it knowingly submitted or caused submissions of false claims to Medicare from 2008 to 2017. The alleged scheme was the brought to light with Fischer’s help under a so-called “whistleblower” action.
In a lawsuit filed in 2014, which was unsealed last year, Fischer accused Community Health of paying dozens of physicians unreasonably high salaries and other incentives in a scheme to steer patients to Community Health facilities.
He said he began digging into the ownership arrangements between Community Health physicians and the system’s for-profit ambulatory surgery centers. He expressed concern that compensation received by the physicians was higher than average for the region, and this represented an “illegal transfer of funds” from the not-for-profit health system to the for-profit surgery centers.
In his lawsuit, Fischer alleged that beginning in at least 2012, Community Health paid and accepted illegal kickbacks and inducements to physicians to receive referrals to assorted care facilities.
He said he didn’t get a satisfactory answer when he raised questions.
“I cannot stomach this stuff,” Fischer said in his lawsuit. “…I am not going to jail for these people.”