The public has a right to know the details of a $7 million settlement between All Children's Hospital in St. Petersburg and the state and federal government. The agreement is the conclusion of a 2011 lawsuit brought by a whistle-blower who claimed the hospital was paying doctors outrageous salaries and bonuses to bring in more patients and Medicaid money. That practice would flout a federal law designed to keep doctors from benefiting financially from Medicaid referrals. There is no legal reason details of the All Children's settlement cannot be disclosed. The hospital and the government agreed to keep secret exactly what happened with taxpayer money at a beloved regional institution. The public has a vested interest and deserves to see everything.
Founded in 1926, All Children's has grown from a facility designed to treat children with polio and other crippling disorders to a $400 million, 259-bed pediatric hospital built in 2010. The latest construction project is, in part, why Barbara Schubert said she came forward with allegations of wrongdoing. Forced to find new ways to compete with other medical centers and to pay for the new building, All Children's went on a hiring spree and vastly overpaid doctors to come on board, alleged Schubert, who was director of operations for the doctors' practice at the hospital for more than 10 years. In a 2011 lawsuit, Schubert claimed the hospital hired 80 doctors in 10 specialities at inflated salaries. In 2010 alone, she said, the hospital overpaid doctors by $5 million. The newly hired doctors brought with them millions of dollars in Medicaid money under exclusive contracts to refer patients to All Children's, Schubert alleged. According to an annual report cited in the lawsuit, 70 percent or about $370 million of the hospital's patient care revenues in 2010 came from Medicaid.
All Children's denies any wrongdoing. In a statement to the Tampa Bay Times earlier this week, the hospital said it could not comment on the case or the settlement. But its $7 million payout speaks volumes. Under the terms of the deal, the hospital will pay the federal government $4 million. The state of Florida will receive $3 million. For her role as a whistle-blower, Schubert will get $1.9 million from the state and federal government. That kind of money is not routinely paid when all hands are clean, and this was hardly a nuisance lawsuit to be paid as the cost of doing business.
It comes as no surprise that All Children's wants to keep quiet whatever happened with hiring practices, high salaries and any improper recruiting techniques used to secure more Medicaid dollars. But there is no excuse for the state and federal government to withhold information from taxpayers. By sharing what it learned, the government would fulfill its responsibility to taxpayers and put hospitals on notice that they cannot pay their way out of full disclosure.
There already is enough public suspicion about the high cost of medical care, overutilization of hospital services and fraud in the Medicaid program. All Children's and the government should drop the confidentiality agreement and let taxpayers see how their money was spent. The whistle-blower performed a public service, and the public should see the full results of her courageous effort to expose the truth.