Friday, June 18, 2004

If it can happen to Harvard . . .

Alice Dembner reports in today's Business section of The Boston Globe that Harvard University and Beth Israel Deaconess Hospital "will pay $2.4 million to settle allegations that they misused four federal research and training grants, improperly billing the government for salaries and expenses, the US attorney's office said yesterday." Universities and teaching hospitals around the country need to wake up and smell the coffee. Regardless of the source of the federal grant money -- NIH, NSF, you name it -- the era of playing games with the actual use to which funds are put is over:
[T]he agreement specifically leaves open the possibility of further action against Dr. Jeanne Wei, the geriatrician who was the principal investigator for the grants. The agreement also requires the institutions to cooperate with "the government's investigation of individuals" involved with the four grants.

Wei, the former head of Harvard's division on aging and Beth Israel's division of gerontology, resigned from those administrative posts in 1999 and left Harvard Medical School and the hospital in June 2002. She is currently a professor and executive vice chairman of the geriatrics department at the University of Arkansas for Medical Sciences. She did not respond to a request for comment yesterday.

"This settlement should send a message that institutions who accept federal grant money, no matter who they are, must strictly adhere to the terms and conditions of those grants," said US Attorney Michael J. Sullivan in a statement.
The press release from the U.S. Attorney's office details the misuse:The use of the federal False Claims Act is particularly noteworthy for those school officers who may not think compliance is a big deal. Anyone with knowledge of the wrong-doing can bring a whistleblower (or "qui tam") action under 37 U.S.C. ยงยง 3729-3730, and if the fraud is proved, the whistleblower (technically, "the qui tam relator") almost always shares in the government's recovery, which may be up to two times the amount of damages actually sustained by the government. The whistleblower's share may be 15-25% of the recovery if the government took over the litigation of the suit, or 25-30% is the government declined to litigate the claim and the qui tam relator had to go it alone. In the Harvard/Deaconess case, if there had been a qui tam relator (which it appears there was not), her share (if she'd litigated without the government's assistance) would have been as high as $720,000. Small wonder that private qui tam actions under the False Claims Act constitute one of the fastest-growing areas of federal litigation around. (The Fried Frank firm's web page is a great resource for information about the Civil War-era statute and the litigation it has spawned.) And all the more reason why large grant recipients who don't invest in a compliance officer to make sure they stay clean are penny wise and pound foolish.
posted by tommayo, 6:53 AM

Health care law (including public health law, medical ethics, and life sciences), with digressions into constitutional law, poetry, and other things that matter