Georgia Hospital Pays $13.8 Million for Fraud on Medicaid Program

(Thomasville, Georgia)–John D. Archbold Memorial Hospital (“Archbold”) has agreed to pay the federal government 13.8 million dollars plus attorneys’ fees to settle charges that it misrepresented itself as a government owned and government operated hospital to obtain federal funds under the Medicaid Program.

The settlement was the result of a whistleblower suit filed in 2008 by Dr. Wesley Simms through his counsel, Bryan Vroon. The settlement is one of the largest amounts ever paid by a Georgia hospital to settle charges of fraud on the federal government under the joint federal-state Medicaid Program. The Medicaid Program provides healthcare to families and individuals with low income and resources.

Dr. Simms filed his case under the federal False Claims Act. That law allows a private citizen with knowledge of fraud on the government to sue on the government’s behalf and receive a share of the proceeds. The False Claims Act was enacted under President Lincoln during the Civil War. Amendments in 1986, 2009, and 2010 have made the False Claims Act the government’s chief weapon against fraud on taxpayer dollars.

According to the First Amended Complaint filed under seal by Dr. Simms, Archbold submitted false certifications and false information to the Georgia Department of Community Health in a scheme to obtain federal matching payments under the federal-state Medicaid program. The Complaint alleges that Archbold’s scheme revolved around representing that it was owned and operated by a city hospital authority. According to the Complaint, Archbold manipulated “intergovernmental transfers” (IGTs) to obtain increased federal matching payments. State and local governments use IGTs to carry out their shared governmental functions, such as collecting and redistributing revenues to provide essential government services.

In the summer of 2007, Dr. Simms began his investigation and efforts to expose the issue of Archbold’s purported “government” status and relationship with the city hospital authority. From his experience working on staff as a physician at the hospital and from his former position as Chief of Staff at Archbold and a member of the Board of Directors, he knew that the hospital was not owned and operated by a county or city hospital authority.

Dr. Simms first filed a case under the Georgia Open Records Act to obtain documents regarding Archbold’s relationship with a government hospital authority. Dr. Simms’ determination and efforts led to the indictments of William Sellers, Archbold’s former Chief Financial Officer and Ken Beverly, Archbold’s former Chief Executive Officer. On August 29, 2008, Mr. Sellers was indicted in the United States District Court for the Middle District of Georgia, Case No. 7:08-CR-27-WLS. Counts One through Three are for falsification of records in violation of 18 U.S.C. 1519 and Count Four is for obstruction of justice in attempting to corruptly conceal documents in violation of 18 U.S.C. 1512(c)(1). On January 9, 2009, Mr. Sellers pled guilty to Counts One, Two, and Three for falsification of records.

In April of 2010, Archbold’s former Chief Executive Officer, Mr. Beverly, was indicted in the United States District Court for the Middle District of Georgia on charges of conspiracy to falsify records, falsification of records, and witness tampering(Case No. 7:10-CR-8-WLS). On December 8, 2010, Mr. Beverly was convicted by a federal jury in Valdosta, Georgia on all six counts of the indictment.

Archbold agreed to the 13.8 million dollar settlement with the U.S. Attorneys’ Office in Atlanta after more than two years of investigation and negotiations. The lead lawyers for the Department of Justice were Dan Caldwell, Assistant U.S Attorney in Atlanta, and Adam Schwartz of the Civil Fraud Section, U.S. Department of Justice in Washington, D.C.

“Dr. Simms has great determination and strong convictions to protect taxpayer dollars from fraud,” said his attorney Bryan Vroon. “He just wouldn’t give up or be silent. And his motivation was accountability and change for the better at the major hospital within the community where his family lives and works.” Vroon further stated, “Dr. Simms’ efforts led to a significant recovery for the Medicaid Program and providing medical care to families with limited income.”

Mr. Vroon stated, “The United States has faced escalating expenses within the Medicare and Medicaid Programs and there is a major amount of fraud on the government within these programs. It is extremely important to protect taxpayer dollars from fraud, and Dr. Simms has given great effort to do that.

Dr. Simms stated, “I am grateful to my family and friends in the community for their support during the Open Records Act cases. Without them, the adversity and ostracism would have been unbearable. I would also like to thank the U.S. Justice Department for their tireless efforts in investigating and resolving these matters. I applaud the Department of Justice for recovering these funds taken from the Medicaid Program which provides medical care for our most vulnerable citizens, the indigent patients of the State of Georgia.”

For further information, please contact Bryan Vroon at bvroon@vroonlaw.com, cell (404)441-9806. The First Amended Complaint filed by Dr. Simms may be found at Archbold Filed First Amended Complaint.
Mr. Vroon is an Atlanta attorney with a nationwide practice representing whistleblowers in healthcare fraud cases.