Redding hospital's settlement opposed

Quick government deal cheats taxpayers, says colleague of embattled heart doctors

By Sam Stanton and Denny Walsh -- Bee Staff Writers
Published 2:15 a.m. PDT Tuesday, September 9, 2003

Charging that the federal government rushed into a settlement that cheated taxpayers out of hundreds of millions of dollars in the Redding Medical Center malpractice scandal, a would-be whistle-blower is asking for an open court hearing to determine how the $54 million deal came about.

A lawyer for Dr. Patrick Campbell, an internal medicine specialist at the hospital since 1993, is asking a federal judge to inquire into last month's settlement assessing the hospital's parent company, Tenet Healthcare Corp., for alleged unnecessary heart surgeries and tests.

Campbell and attorney David Rude claim the settlement should be for approximately $500 million.

"The government owes this court, Dr. Campbell, and, most importantly the public, an explanation as to why the government has settled at this early stage for what appears to be only a fraction of the total amount fraudulently claimed and collected by the defendants," Rude wrote in court papers.

While federal officials had heralded the pact as the largest-ever medical necessity settlement, Rude claims in court documents that it is dwarfed by earlier false claims resolutions and that the government settled for 12 cents on every dollar it could have recouped.

The assertion is in previously secret documents filed in Campbell's false-claims lawsuit against Tenet, the hospital and three of its doctors.

Federal officials said Monday that they were limited in what they could say because a criminal investigation is ongoing. But Assistant U.S. Attorney Michael A. Hirst, who negotiated the settlement on behalf of the government, said Rude is pulling "numbers out of the air without any apparent thought as to their accuracy."

"By any account, this was an extremely successful settlement," Hirst insisted. "The amount recovered was far more than any of us believed we could achieve."

U.S. Attorney McGregor Scott described the settlement as "a victory for the government on two fronts. First, we recovered for the taxpayers everything that was paid out, plus penalties. Second, we obtained a protocol to ensure the legitimacy of cardiac procedures in the future."

Tenet officials said they had no comment on Campbell's claims.

Tenet spokesman Steve Campanini said, "We will not comment on matters of private litigation, which it sounds like this Campbell matter is turning into."

Former U.S. Attorney Charles Stevens, who negotiated the settlement for the medical center, was out of the country and unavailable.

Campbell's information helped federal agents and prosecutors probe whether doctors and administrators at the hospital conspired to perform hundreds of unnecessary heart procedures to cheat the government out of hundreds of millions of dollars in Medicare, Medicaid and Medi-Cal payments.

The court filings provide the first lengthy and detailed look at the Redding Medical Center disaster from the standpoint of Campbell, who claims he was the first to approach FBI agents with information on unethical and unlawful practices in the hospital's cardiac-care unit.

Campbell claims he became concerned after he arrived in Redding in 1993 and referred a patient with chest pains to Dr. Chae Hyun Moon, who was director of cardiology.

Despite advice from another doctor that the patient be treated without surgery, "Dr. Moon prevailed in the debate and the patient underwent surgery," Campbell claims. The patient developed a blood clot several months later and died.

Campbell began consulting with other cardiologists and came to suspect a major problem. He approached the head of the hospital with his concerns, but his requests for a review were ignored, he claims, and he eventually went to the FBI.

Agents raided the hospital's medical offices in October, and Campbell filed his lawsuit nine days later seeking status as a whistle-blower, a designation that would have made him eligible for up to 30 percent of whatever Tenet eventually repaid the government.

His suit was filed in secret, in accordance with court rules, but it was ordered unsealed late Friday by U.S. District Judge David F. Levi.

Campbell claims he received "veiled threats" from the heart physicians who are now the primary targets of the criminal investigation -- Moon and Dr. Fidel Realyvasquez -- and that his career and standing in the community have been jeopardized by his efforts to force the truth into the open.

Attorneys for Moon and Realyvasquez, who are not currently practicing, rejected the claim of threats.

"That's nonsense," said Realyvasquez attorney Malcolm Segal.

"Dr. Campbell obviously has some professional envy of Dr. Moon," added Moon attorney Matt Jacobs.

"A good example of the trouble Dr. Campbell can expect as a result of having blown the whistle on the defendants is that in February 2003 the California Medical Board initiated complaint proceedings against his medical license for having provided confidential patient information to the FBI," the court papers say.

Those proceedings were suspended after Rude provided the board with a detailed explanation of Campbell's role.

There also has been a personal cost, with the investigation leading to the layoffs of 150 workers at the heart center and the imminent threat of the hospital losing its ability to treat Medicare patients.

"Many colleagues of Dr. Campbell, who suspect Dr. Campbell's role in the government investigation, blame Dr. Campbell for these unfortunate consequences of the government's actions," the documents state.

Campbell also is facing a big financial blow. His suit was dismissed Aug. 1, because the federal False Claims Act allows whistle-blower payments only to the first person to sue seeking such a designation, and Campbell's suit came three days after a similar one filed on behalf of a patient.

The patient, Redding-area priest John Corapi, was diagnosed at the heart center and filed his suit Nov. 5, seeking whistle-blower status.

Corapi attorney Dugan Barr said Monday that he had not seen the Campbell file and had no comment on the doctor's claims. But he added that his client was the first to go to federal investigators with suspicions about the medical center.

"It's my belief that they didn't even have a file open on this until he contacted them," Barr said.

Corapi's lawsuit also is subject to challenge by federal officials, who are expected to argue that Corapi, with knowledge of only his own medical problems, is not a true whistle-blower.

Campbell's role in the matter remained secret until the settlement with Tenet was announced Aug. 6, when The Bee disclosed details of his suit.

The settlement, which was approved by officials at the Justice Department in Washington, D.C., relieves Tenet of potential criminal charges against the company and the hospital, but a federal grand jury continues to consider evidence against physicians and administrators at the medical center.

Rude still hopes to convince a court that Campbell is a bona fide whistle-blower. He cites case law in arguing that the government should collect at least $450 million on Tenet's fraudulent claims, plus fines that would boost the total $500,000 or more.

But Hirst, the assistant U.S. attorney, said Monday that Rude's reasoning is flawed by his lack of access to all the evidence and the negotiations.

"The court has dismissed Dr. Campbell as a whistle-blower," Hirst said. "Clearly, he's frustrated that he won't receive a share of the $54 million, and we understand his frustration."