Judge refuses to dismiss whistleblower suit against Christiana Care

Associated Press

WILMINGTON, Del. (AP) - A federal judge has refused to dismiss a whistleblower lawsuit against Delaware's largest hospital system.

The lawsuit filed by former Christiana Care compliance officer Ronald Sherman and backed by the federal government alleges that the hospital system defrauded taxpayers by funneling Medicaid payments to independent doctors as kickbacks in exchange for patient referrals.

The judge denied Christiana's motion to dismiss the lawsuit after holding a hearing on Friday.

Related:Christiana Care asks judge to toss out lawsuit claiming kickbacks

Christiana Care argued that Sherman had no standing to file the lawsuit because he had previously executed a release discharging all causes of action against the hospital system when he was terminated in 2014.

Christiana also argued that Sherman, on behalf of Christiana Care, had disclosed the allegations contained in his complaint to the government through compliance disclosure logs submitted to the Department of Health and Human Services' inspector general's office.

Archives:Christiana Care pays $3.3 million to end whistleblower lawsuit

Christiana was required to submit the compliance disclosure logs to federal officials under a corporate integrity agreement entered into in 2010 following similar allegations of Medicare and Medicaid fraud. Christiana settled that case for $3.3 million.

Sherman argued that an analysis of the disclosure log entries and documents that he has accumulated and that Christiana has produced show that Christiana's disclosures were so far removed from its actual knowledge that the log entries were misleading and did not alert the government that fraud had occurred.