Whistleblower Cases in the News


Sometimes, employees are forced to toe the line between doing their job and doing what is morally right. When an applicant applies for a position with a company, they believe the company is following all federal and state government regulations. When an employee gets hired and is subsequently asked to perform unethical duties, they are often confused. Many times, employees fear speaking out because they do not want to lose their job or put themselves or family members in danger.

Unethical company behavior becomes a toxic work culture. Employees are expected to follow these nefarious guidelines or face dire consequences. Workers that are uncomfortable with these practices risk being ostracized by workers and management or worse.

The term whistleblower is used to describe employees that reveal the unethical behaviors of a company or organization. Whistleblowers
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can be current or former employees. They usually have access to documents and files containing incriminating evidence.

Quest Diagnostics and Berkeley Heartlabs Scandal

Recently, three whistleblowers revealed unethical practices within the healthcare industry. Quest diagnostics was implicated in a suit claiming the medical testing agency was using kickbacks to influence doctors to order unnecessary and expensive tests.

Quest Diagnostics acquired Berkeley Heartlabs in 2011. The suit claims that Quest enlisted the company to pay physicians unsolicited “fees” to encourage them to order unapproved blood tests. Berkeley Heartlabs was also accused of waiving copayments for testing, which goes against federal law.

Quest Diagnostics was ordered to pay $6 million to the federal government. The whistleblower was a physician that revealed the nefarious dealings of two other companies: Health Diagnostics Laboratory and Singulex Inc.

CareCore National LLC

Carecore National has just settled a $54 million lawsuit with the Federal Government and nine other states. The diagnostic testing lab was under fire for ordering nurses to perform tests that were not medically necessary. The unethical system, known as ‘Process as Directed’ (PAD), required nurses to fulfill pre-authorization requests for tests even though the tests were not properly authorized by a doctor.

The $54 million settlement was divvied up between the U.S. government and the states. The whistleblower, a licensed practical nurse (LPN), was awarded $10.5 million in damages.

Dermatology Scandal in California

A former employee of a California dermatologist claimed her employer falsely diagnosed patients with skin cancer to pocket fees from surgery. The employee alleged the doctor would perform Mohs micrographic surgeries on patients that falsely believed they had skin cancer.

During Mohs micrographic surgery, a layer of the infected area is removed and the doctor uses a microscope to examine the specimen. The unnecessary surgeries were illegal because they forced Medicare to pay out higher fees for the treatments.

The whistleblower was protected by the False Claims Act, a regulation managed by the U.S. Department of Justice. The Act was created to protect the Federal government from false billing claims. Entities accused of falsely billing the government will be ordered to pay damages and a fine. The Act has been amended four times since its creation in 1863.

Medicare is a division of the Federal government and doctors who submit false claims to the insurance agency are liable for fraud. The dermatologist in this case was ordered to pay $2.6 million.

ABOUT THE AUTHOR: Sid Gold
Mr. Gold is the principal shareholder of the Pennsylvania & New Jersey employment law firm of Sidney L. Gold & Associates, P.C. in Philadelphia, which is a preeminent law firm in the field of employment law and civil rights litigation. His practice, as well as that of the law firm, is concentrated in the representation of both employees and employers in all aspects of employment related litigation in Pennsylvania and New Jersey, including claims under federal and state anti-discrimination laws and federal civil rights laws.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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