For his efforts uncovering a Medicaid fraud that the government couldn’t, the veteran pocketed a $15 million whistle blower payout.

Richard West, a 63-year-old Vietnam vet living in New Jersey knew something was wrong when medical services he needed were being cut back because he had supposedly reached the spending limit. West has muscular dystrophy, is confined to a wheelchair and needs oxygen — but he’s nobody’s fool and knew the numbers didn’t add up.

A little digging into his records showed that Maxim Healthcare had overbilled for hundreds of hours of care he never received, from nurses he’d never met.

West contacted numerous federal agencies who all declined to help him. So he hired his own lawyer and went to court.

When all was said and done, Maxim had agreed to pay the highest financial settlement in history for home healthcare fraud: $121.5 million in reimbursements and penalties, $8.4 million to the Veterans Administration and a fine of $20 million. Under the whistle-blower laws, West gets to keep a cool $15 million of that. He said he plans to use the funds to buy a new van, make some improvements to his home and donate to charities for the disabled. He will however, lose his Medicaid eligibility as his lawyer noted.

What motivated him to keep up the fight? West told a reporter for the New York Post: “The more I uncovered, the more pissed off I got that someone was making money on my disability… From my wheelchair, on a ventilator and oxygen, I have spent the last seven years in this fight. Sometimes the good guy wins.”

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DaVita, a leading provider of kidney dialysis, is accused of using the wrong size vial of drug so it could get additional reimbursements from Medicare. For example, instead of giving patients an entire100 mg vial of the iron drug Venofer once or twice a month, the company allegedly gave more frequent, smaller doses — while wasting the excess medicine in the vials. Then Medicare would be billed for each 100 mg vial used.

Because Medicare reimburses slightly more than health care companies pay for the drugs, such waste can be profitable.

DaVita denies the allegations and said that all dosing decisions were made my doctors for medical reasons and that reimbursements didn’t play a role in that process.

The feds investigated the complaints for two years, but opted not to join the lawsuit.

Medicare has since changed the way it reimburses, so waste of drugs would no longer be a potential money-maker.

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The settlement is to be paid by University Internal Medicine Associates, and Health Alliance of Greater Cincinnati for two of its member hospitals (Fort Hamilton Hospital and The University Hospital).

The Dept. of Justice, alerted by a cardiologist at Fort Hamilton, alleged that the hospital referred patients to University Internal Medicine Associates at University Hospital, in return for those doctors performing specific surgical procedures at the hospital that were only allowed under a specific clinical trial.

The cardiologist whistle-blower will receive almost $500,000 of the settlement.

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A nurse who reported a doctor’s unorthodox-at-best techniques now finds herself facing criminal charges of misusing official information.

Last June, Anne Mitchell and Vickilyn Galle, two nurses at Winkler County Memorial Hospital in Texas, sent an anonymous letter to the Texas Medical Board detailing their concerns about Dr. Rolando Arafiles’ treatment of patients.

Mitchell and Galle each have more than 20 years of nursing experience and their duties included quality improvement issues. Mitchell also served as the hospital’s compliance officer.

The letter they sent to the board included relevant file numbers, but no patient names. They cited six specific problematic cases, among them: Arafiles had performed an unsuccessful skin graft in the ER without surgical privileges. In another case, Arafiles sutured a rubber tip to a patient’s crushed finger — a technique that the Dept. of State Health Services later deemed inappropriate care. The nurses also claimed that Arafiles had e-mailed patients, encouraging them to purchase an herbal supplement he sold on the side.

The nurses stated in the letter that they weren’t signing it because hospital administrators had already been alerted to the problems, had not acted, and the nurses feared retribution if their actions were discovered.

Harassment or Whistle-blowing?

Their fears appear to have been well-founded.

After Arafiles heard about the report from the medical board, he told the county sheriff — a personal friend who credits the doctor with saving his life after a heart attack — that he felt the report amounted to harassment.

In response, the sheriff got a search warrant, seized computers at the hospital, and eventually discovered that Mitchell and Galle were responsible. They were fired in June 2009.

Shortly afterward, the county prosecutor brought charges against the women for “misusing official information.” Eventually, charges against Galle were dropped, but Mitchell’s trial started this week. A third nurse who had reported Arafiles in her own letter to the medical board after resigning from the hospital was not charged.

Mitchell and Galle have countersued in federal court, alleging vindictive prosecution and a denial of First Amendment rights by the hospital, sheriff, prosecutor and Arafiles.

Public opinion seems to be with the nurses. The Texas Medical Board’s executive director warned prosecutors this trial could scare other clinicians from reporting malpractice. Several nurses’ associations have raised money for Mitchell’s legal fees. And most legal experts believe Mitchell’s actions fall under the state whistle-blower protection laws.

We’ll keep you posted on this case as it develops.

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