Alaska News

Executives say they lost their jobs at one of Alaska’s largest hospitals for reporting improper billing of Medicare, Medicaid

In a federal whistleblower lawsuit, two former officials for one of the largest hospitals in Alaska claim they lost their jobs for trying to stop illegal billing practices and raising other concerns.

The former executives accuse the Alaska Native Tribal Health Consortium of engaging in potential billing violations that resulted in the nonprofit receiving millions of dollars of improper payments from Medicare and Medicaid.

The tribal health organization, which runs the Alaska Native Medical Center in Anchorage, says the complaints are not true.

"Our staff and outside auditors routinely and thoroughly review our billing practices to ensure compliance and correct any inadvertent errors that are found," ANTHC wrote in a statement to the Daily News.

The hospital says the former employees' claims — which also allege problems involving security of health information — are misleading and incorrect.

The tribal consortium operates the 173-bed Alaska Native Medical Center, the third-largest hospital in the state. Both ANTHC and the medical center are named in the lawsuit.

Former ANTHC Chief Ethics and Compliance Officer Joan Wilson and former Chief Medical Officer Dr. Paul Franke assert the hospital double-billed for certain drugs and improperly billed for services delivered by ineligible providers, among other claims.


They accuse the tribal consortium and hospital of firing Wilson and failing to extend Franke's contract in retaliation for whistleblowing. ANTHC denies that accusation. Attorneys for the nonprofit would not say why Wilson and Franke lost their jobs but said ANTHC stands by those personnel decisions.

Based on their knowledge of day-to-day operations, Wilson and Franke say ANTHC and ANMC:

• "Improperly received" more than $20 million in federal information technology funds without taking required steps to secure electronic medical records of Alaska patients.

• Improperly billed for $7 million in services, as identified by Franke, that were not appropriately authenticated by providers.

• Declined to fix improper billing practices after Franke and Wilson flagged alleged problems between 2013 and 2016.

"(ANTHC executives) took no action to return funds received as a result of the improper billing," the complaint says. "These practices are still occurring today."

ANTHC has not yet filed a full response to the accusations because the judge is still considering a pending amendment. In a statement provided by an ANTHC attorney, the nonprofit said the former employees's claims are false.

"Our system like others can make mistakes in billing," the nonprofit said. "Whenever a mistake is discovered, we fix it, including any inadvertent over-payments."

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Wrongful termination complaint

Wilson worked as chief ethics officer at ANTHC for 20 months. Dr. Franke worked there for 3 1/2 years, including a stint as interim administrator at the Alaska Native Medical Center.

Wilson and Franke filed the lawsuit in fall 2016 under the False Claims Act. Also known as "Lincoln's law," the act entitles whistleblower employees of federal contractors to file lawsuits on behalf of the government. It also protects against retaliatory firing.

If the lawsuits are successful, the whistleblowers may collect a portion of the fines. Last year, False Claims Act complaints involving health care fraud and the health care industry generated more than $2.4 billion in settlements and judgments, according to the U.S. Justice Department.

The two former executives initially asked for a federal jury to find that ANTHC and ANMC committed billing fraud and to award hundreds of millions of dollars in damages to the U.S. government.

But the Justice Department declined to intervene in the case, according to a December motion.

"The Department of Justice had the allegations for 18 months and declined to take the case," ANTHC emphasized in a statement to the Daily News denying the ex-employees' accusations.

Federal attorneys did not say why they did not pursue the case. The Justice Department asked the judge for an opportunity to be heard before the judge granted any approval to settle or dismiss the complaint.


A record number of False Claims Act lawsuits are being filed, straining government resources, according to a Jan. 10 memo from the Justice Department to attorneys in the Commercial Litigation Branch, Civil Fraud Section.

"A decision not to intervene in a particular case may be based on factors other than merit, particularly in light of the government's limited resources," wrote Michael Granston, director of the Civil Fraud Section.

The ANTHC case became public when a judge unsealed a portion of the filings earlier this year.

Those documents, discovered in a routine Daily News review of federal filings, show Wilson and Franke have continued the lawsuit with an amended complaint filed Aug. 15.

Wilson and Franke dropped the fraud accusations in the amended complaint but still allege they witnessed improper billing practices. The lawsuit now focuses on claims of wrongful termination.

"(ANTHC executives) fired Ms. Wilson on May 6, 2016, in retaliation for complaining internally about various violations of ANTHC policy and the law," the lawsuit says.

ANTHC said the hospital did not retaliate against the employees, calling the decision to end their employment "justified and proper."

The tribal health organization is simultaneously named in a lawsuit from Southcentral Foundation, which accused ANTHC of an illegal power grab that led to "lucrative" pay for top executives following a $153 million settlement from the federal government.


$283 million in Medicare, Medicaid reimbursements last year

ANTHC serves some 166,000 Alaska Natives and American Indians, with revenues of over half a billion dollars a year. Medicare and Medicaid are taxpayer-funded programs that provide health care to low-income and elderly patients.

In 2017, the Alaska Native Medical Center campus received about $283 million in Medicare and Medicaid reimbursements, including about $204 million managed by ANTHC, the tribal health organization says.

The process for billing Medicare and Medicaid includes signing a form that certifies the services were medically necessary for the health of the patient and were personally furnished by the doctor or by the doctor's employee at the direction of the doctor.

As an example of "double billing," the Wilson and Franke say Alaska Native Medical Center and separate tribal health facilities both bill the federal government for the same radiology services. In another example, the pair say a problem with the ANTHC electronic records system causes certain services to be billed twice when a patient moves from one level of care to another within the same hospital.

"This practice is evidenced by the duplicate ventilator charges for the same patient on the same day or charges on days the service was not provided," the complaint says.

The lawsuit says Andy Teuber, the ANTHC president, and chief executive Roald Helgesen "are aware of these issues and have taken no steps to stop the improper billing practices."

ANTHC denies that claim.

"ANTHC has a great financial and compliance team. They work hard to keep on top of the constant changes in the health care rules and regulations that apply to our hospital," the consortium statement says. "We have full confidence in them and the job they are doing."

Lost jobs

The lawsuit also claims that ANTHC "diverted funds that should be available for tribal health care by allowing first-class travel and double and triple booking of flights" for executives and board members.

ANTHC attorneys said that allegation "indicates a lack of understanding" of the sources of revenue for the tribal health organization.


"ANTHC receives both non-profit and for-profit revenue through a diverse portfolio, including interests in commercial real estate and hotel investments. ANTHC does not pay for first class or other travel with funds that could be spent on health care," a spokeswoman wrote.

"ANTHC's travel policy is compliant with federal standards that allow ANTHC to pay for first class travel only in very limited circumstances. ANTHC enforces these rules through all levels of the organization, including with leadership," the the non-profit wrote. Generally, if an ANTHC employee or director fly first class, they pay for their own upgrade, the nonprofit said. 

Wilson said that in the days before her firing, she raised billing and data security concerns with Helgesen, the chief executive. Prior to the firing she told Helgesen and an ANTHC attorney that she objected to being excluded from a meeting that dealt with Medicaid billing. She said she also objected to plans to make a report related to data privacy concerns confidential under client-attorney privilege.

The following month, Franke learned he would not have his contract extended as chief medical officer, the complaint says.

ANTHC disputes the former employees' version of events.

"Identifying, reporting and correcting issues were important parts of Ms. Wilson and Dr. Franke's positions. ANTHC did not retaliate against either of them," the nonprofit said in a written statement.


"ANTHC stands behind its employment decisions," the nonprofit says.

The lawsuit seeks a jury trial.

Kyle Hopkins

Kyle Hopkins is special projects editor of the Anchorage Daily News. He was the lead reporter on the Pulitzer Prize-winning "Lawless" project and is part of an ongoing collaboration between the ADN and ProPublica's Local Reporting Network. He joined the ADN in 2004 and was also an editor and investigative reporter at KTUU-TV. Email