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Court: Law protects ex-employees from whistleblower retaliation

On Behalf of | Apr 8, 2021 | Whistleblowers |

A federal court recently ruled that the False Claims Act not only protects current employees but former employees as well from retaliation in whistleblower cases. The U.S. Court of Appeals for the Sixth Circuit on March 31 made its ruling in the case of Felten vs. William Beaumont Hospital, a case with origins in Michigan.

The case centered on world-renown neurologist Dr. David Felton, the lead whistleblower in a kickback scheme involving his former employer William Beaumont Hospital in the Detroit suburb of Royal Oak.

Hospital paid $84.5 settlement three years ago

From 2005 to 2013, Felten worked at William Beaumont Hospital Research Institute as medical director. During that time, Felten observed and reported numerous questionable payment agreements between the hospital and other physicians, only to be met for years by ignoring administrators.

In 2010, Felten became the first person to file a whistleblower lawsuit against the hospital. Three more whistleblower lawsuits followed. According to the lawsuit, Felten alleged that the hospital paid kickbacks for referrals, overpaid eight doctors and provided them with free office space perks.

Later, Felten amended the lawsuit, alleging that the hospital blacklisted him. He claimed hospital administrators retaliated against him when by diminishing his duties, and Felten became a pariah for exposing the kickbacks and illegal behavior. After being forced to quit, Felten was unable to secure another job.

In 2018, William Beaumont Hospital agreed to pay $84.5 million in settling the whistleblower allegations that it maintained inappropriate relationships with the eight physicians. As a result of these relationships, numerous false claims were submitted to Medicare, Medicaid and Tricare between 2004 and 2012. The U.S. Department of Justice was involved in the settlement.

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