An Arkansas federal judge who ordered the reinstatement of a whistleblower terminated after implicating Bayer Corp. in a Medicare fraud scheme rebuked the pharmaceutical giant for attempting to reinstate the former employee to a job 500 miles away.
Bayer fired sales representative Mike Townsend in 2010 after he blew the whistle on a scheme by a major Bayer customer to defraud Medicaid by illicitly billing the program for intrauterine contraceptives.
Mr. Townsend had worked as a Bayer sales rep for six years when he caught on to a Medicaid scam he alleges was orchestrated by Arkansas physician Kelly Dean Shrum, at that time the biggest single-practice buyer of Bayer’s Mirena, a T-shaped, hormone-releasing device inserted in the uterus and left in place for up to five years to prevent pregnancy.
Dr. Shrum suddenly stopped buying Mirena in early 2008, and when Townsend asked why, “the doctor boasted about buying a cheaper version of Mirena from Canada and continuing to submit reimbursement claims to Medicaid despite the device’s lack of U.S. Food and Drug Administration (FDA) approval,” Law360 reported, citing Mr. Townsend’s complaint.
Mr. Townsend conveyed this information to his superiors in early 2009 and then reported Dr. Shrum to authorities. The doctor was later convicted of misdemeanor misbranding.
Bayer fired Mr. Shrum in 2010. He filed a whistleblower complaint against Bayer in March 2011, and won a $900,000 judgement against Bayer and back pay in November 2012. Mr. Townsend had sought front pay from the company, “but the court found that reinstatement was the appropriate remedy,” Law360 reported.
Bayer tried to comply with the reinstatement order by placing Mr. Townsend in a new position in Knoxville, Tenn., about 500 miles away from his home in Little Rock.
“The court finds that Bayer’s notification of the availability of the Knoxville position was not a good faith effort to comply with the court’s order mandating reinstatement,” U.S. District Court Judge James Moody Jr. said. “The Knoxville position was not a substantially similar or comparable position to that held by the plaintiff prior to the discrimination.”
The qui tam whistleblower provisions of the False Claims Act prohibit employers from retaliating against employees who blow the whistle on fraud, abuse, waste, mismanagement and other misconduct.