Workers to Split Millions-Whistle Blowers get Part of Settlement

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MONDAY, MARCH 26, 2001

TAMPA — Two former hospital administrators who filed a lawsuit accusing a national health-care chain of Medicare fraud will receive part of a $104.5-million settlement.

In December 1997, Gwendolyn Cavanaugh and Virginia Lanford filed a secret lawsuit against Vencor under the False Claims Act in federal court in Tampa. Cavanaugh, 66, and Lanford, 47, began to suspect fraud while working at Central Tampa Hospital.

Last week, Vencor announced it would pay $104.5 million to settle that suit and eight others alleging false claims submitted to Medicare and Medicaid. The two women will receive 15 percent of $54.68 million, the proceeds to settle their lawsuit, according to the Department of Justice. That means they will split $8,203,064.27 with their Fort Lauderdale attorney, Kenneth J. Nolan.

Cavanaugh, a former assistant finance administrator at the hospital, and Lanford, a former quality review manager, started to notice something amiss in the fall of 1997.

Vencor, which had recently bought Central Tampa Hospital, was changing the method for handling charges for respiratory services supplied to its nursing homes. The women thought Vencor was padding its reports to get bigger reimbursement checks from Medicare. When they brought it up to their supervisors, they were told not to be concerned.

Cavanaugh and Lanford resigned from their posts shortly after filing the lawsuit.

The whistleblower in this case is represented by Nolan & Auerbach, a law firm located in Ft. Lauderdale, FL.