(Mobile, Alabama) — A United States District Court in southern Alabama recently unsealed a False Claims Act case against LifePoint Hospitals, Inc. and various other individual and corporate defendants related to an alleged scheme whereby Vaughn Regional Medical Center in Selma, Alabama was staffed by unlicensed foreign medical residents in the hospital’s Emergency Room.  In addition to being unsupervised, unqualified, and unlicensed, the whistleblower Complaint alleges that the foreign medical residents were uninsured, leaving little recourse for patients who might have been defrauded or harmed by the allegedly fraudulent scheme.  The suit alleges that the foreign residents — while not licensed — had attended medical school outside of the United States and were ostensibly in the country to participate in a residency program associated with the University of Alabama at Birmingham.

The case was filed in 2014 by a physician whistleblower who discovered the alleged scheme and reported it to federal authorities through a qui tam whistleblower Complaint under the federal False Claims Act.  The Department of Justice investigated the case for five years and — determining that the allegations had merit — joined the suit in May, though the suit remained under seal until the Court’s recent order.

According to the allegations in the Complaint, local licensed physicians signed treatment records with which they had no involvement, fraudulently representing to federal healthcare programs that treatment was delivered or supervised by them when the treatments were, in fact, solely delivered by the unlicensed and unsupervised foreign residents who were surreptitiously paid in cash.

The Department of Justice intervened in the Complaint to prosecute the case, alleging that the foreign medical residents “examined patients, gave medication orders, gave treatment orders, and performed invasive procedures on patients” without supervision from licensed physicians and without the patients’ knowledge.  Furthermore, the Complaint alleges that the unlicensed foreign medical residents were secretly paid $50 per hour as a way to cover up the scheme, even though the federal government through Medicare and Medicaid paid many multiples of that amount to the hospital and its contractors to treat the patients.  Additionally, patients were allegedly charged fraudulent co-pays, believing that they were being treated by duly licensed physicians when they were not.  Pursuant to Court Order a stay of the case is set to expire on September 1.

The whistleblower in the action is represented by the qui tam firm of Frohsin Barger & Walthall.  Under the False Claims Act, whistleblowers may receive between 15-30%, depending on the circumstances, of any recovery made on behalf of the Government, which can be as much as three times the amount of the fraud plus penalties, attorneys’ fees, and costs.