What’s Scarier than a Compliance Officer Turned Whistleblower? A Whole Association of Them


On August 7 a federal court in New York dismissed a whistleblower claim against a hospital brought by a relator with the benign-sounding name “Corporate Compliance Associates.”

In U.S. ex rel. Corporate Compliance Assocs. v. N.Y. Society for the Relief of the Ruptured & Crippled the court ruled that the whistleblower failed to meet the False Claims Act’s requirement that allegations be described with specificity.  Instead, the whistleblower made generalized allegations that the hospital violated the Stark and Anti-Kickback Statutes by paying physicians for referrals.

If the hospital doesn’t sound familiar, it’s because it operates under a d/b/a: The Hospital for Special Surgery.  (Your hospital would use a d/b/a, too, if its legal name included “Ruptured & Crippled.”)  It’s one of the area’s most prestigious hospitals.  It was in the news last year when its former CEO pleaded guilty to wire fraud in connection with a kickback scheme.  But those kickbacks went to the CEO personally, and the hospital was a victim of the scheme.

In the case at hand, the whistleblower charged that the CEO’s misdeeds must have resulted in false Medicare and Medicaid claims, but it couldn’t explain how.  In dismissing the case, the judge noted that the claims were based at least in part on information supplied to the whistleblower by the hospital’s former Chief Compliance Officer.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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