Mark Thompson v. Quorum Health Resources, LLC

485 F. App'x 783
CourtCourt of Appeals for the Sixth Circuit
DecidedJune 22, 2012
Docket10-5685
StatusUnpublished
Cited by3 cases

This text of 485 F. App'x 783 (Mark Thompson v. Quorum Health Resources, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mark Thompson v. Quorum Health Resources, LLC, 485 F. App'x 783 (6th Cir. 2012).

Opinion

JULIA SMITH GIBBONS, Circuit Judge.

Mark Thompson brought a retaliatory discharge claim under the False Claims Act, 31 U.S.C. § 3730(h), after he was suspended and later discharged by his employer, Quorum Health Resources, LLC, (“Quorum”) a healthcare company. A jury concluded that Thompson was fired in retaliation for filing a qui tam action against Quorum. Quorum now appeals the district court’s denial of its motion for a new trial or, in the alternative, for judgment as a matter of law. For the reasons set forth below, we affirm.

I.

Quorum contracts with hospitals to provide management services. These services include providing the client hospital with key management staff, such as a CEO and CFO. Thompson was hired by Quorum in 1994 to serve as CEO of Cumberland County Hospital in Burkesville, Kentucky. In 1999, Thompson was offered and accepted the CEO position at Monroe County Medical Center (“MCMC”), a Quorum-managed facility.

During Thompson’s tenure as CEO of MCMC, the relationship between MCMC and Quorum was governed by a management agreement. Pursuant to the management agreement, Quorum was paid an annual fee for its consulting and management services. Quorum was also paid a percentage commission based on the amount of goods and services MCMC purchased from Group Purchasing Organizations, or GPOs — vendors of hospital goods — with which Quorum had a relationship.

Shortly after he began working at MCMC, Thompson began having concerns about the manner in which his supervisor, Taylor Cook, was representing certain aspects of the management agreement to *785 MCMC’s Board of Directors (the “Board”). Specifically, Thompson was concerned with Cook’s representation to the Board that MCMC was switching GPOs, without disclosing to the Board that the decision regarding which GPO to use was one that the Board could make. Thompson was also concerned with Cook’s failure to bring the 2000 management agreement to the Board as a whole — rather, Cook directed Thompson to just obtain the Board Chairman’s signature on the contract. Thompson also believed that Cook had misrepresented to the Board that Quorum’s management fee was calculated based on the consumer price index, rather than the medical consumer price index. Finally, Thompson believed that Cook failed to disclose to the Board that the 2002 management contract required Quorum’s fee to increase by no less than 5% compounded annually.

As a Quorum employee, Thompson was bound by a Code of Conduct which required him to report any suspected violations of policy, procedure or law to Quorum. Each year he was employed by Quorum, Thompson certified his compliance with the Code of Conduct. On none of these Code of Conduct forms did Thompson indicate any concerns about Cook’s misrepresentations and omissions to MCMC. On November 19, 2002, Thompson called Quorum’s compliance hotline to report his concerns about Cook, but when he was asked to identify which hospital he worked for, he declined to provide the requested information and reported no concerns.

Thompson filed a qui tam suit pursuant to the False Claims Act on January 14, 2004. The complaint alleged that Quorum had defrauded the federal government by unnecessarily driving up MCMC’s costs— which were in turn passed on to Medicare — by improperly selecting hospital vendors and GPOs. Assistant United States Attorney Bill Campbell, who investigated Thompson’s qui tam allegations, advised Thompson not to disclose the existence of his qui tam lawsuit because it was under seal.

In 2004, MCMC’s independent accounting firm, Taylor, Poison & Company (“Taylor Poison”), conducted an audit of MCMC. As part of the audit, Taylor Poison sent certain MCMC Board members and executives, including Thompson, an audit questionnaire which asked about the potential for fraud at MCMC. Thompson received the audit questionnaire in May of 2004 and returned it to Taylor Poison in August. Thompson responded to several questions about the potential for fraud at MCMC as follows:

Question: “Do you believe Monroe County Medical Center has controls and systems in place to prevent a significant fraud from occurring in the Organization?”
Response: “No — Management Contract.”
Question: “Where do you believe the Organization is most vulnerable to significant fraud?”
Response: “Management Contract.”
Question: “Do you have any reason to question the integrity of any of your financial personnel?”
Response: ‘Tes.”
Question: “Do you have any suspicions of fraud that you believe we should consider?”
Response: “Yes.”

John Taylor of Taylor Poison requested a meeting with Thompson to discuss his questionnaire responses. On August 20, 2004, Thompson and his attorney met with Taylor. Thompson told Taylor that the management contract was not “being handled appropriately” and certain changes in the contract were not “being divulged as *786 [they] should have been.” (DE 145, Trial Tr. Vol. II, at 227.) Thompson expressed concerns about the Board’s approval of the management contract without having reviewed it and about the Board’s being misled by Cook. Thompson also expressed concerns about MCMC’s purchasing agreements with vendors.

On September 2, 2004, Taylor met with the Board’s Finance Committee to discuss Thompson’s responses to the audit questionnaire and his meeting with Thompson. The members of the Finance Committee expressed surprise at Thompson’s concerns and directed Taylor to notify MCMC CFO Rickie Brown about Thompson’s responses and to have Brown contact Cook. Cook then informed Joe Beck, Quorum’s corporate compliance officer, of Thompson’s responses to the questionnaire.

In October, Beck and Chris Kelly, Quorum’s General Counsel, traveled to MCMC to meet with the Finance Committee and Thompson to discuss Thompson’s fraud allegations. At the meeting, Thompson refused to answer questions about his concerns because his attorney was not present. Kelly then sent a letter to Thompson’s attorney, dated November 1, 2004, which stated that Quorum and the Finance Committee had been trying to meet with Thompson to understand his fraud concerns, but Thompson had been unwilling to meet with Quorum or the committee outside of the presence of his attorney. Kelly demanded that Thompson meet with Quorum and the Finance Committee by November 5, 2004. By letter dated November 5, 2004, Thompson’s attorney informed Kelly that Thompson would be in a better position to meet with Quorum and the Committee some time after November 18, 2004. On November 18, 2004, Beck sent a letter to Thompson informing him that he had violated the Code of Conduct by failing to report his fraud concerns to Quorum and by failing to cooperate in Quorum’s investigation of those concerns. Beck informed Thompson that these Code violations subjected him to potential disciplinary action, including termination. Beck then demanded that Thompson meet with Quorum representatives on November 29 or 30, or December 1, 2004.

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485 F. App'x 783, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mark-thompson-v-quorum-health-resources-llc-ca6-2012.