A nurse who filed a whistleblower retaliation lawsuit against her employer even though she wasn’t demoted, harassed or terminated, can move forward with her case, a federal appeals court ruled.
Sue Smith, a former nursing director for Louisiana-based home health care agency LHC Group Inc., filed the whistleblower retaliation lawsuit after she allegedly became aware of a scheme to defraud Medicare and Medicaid. Ms. Smith worked at LHC’s home health office in Lexington, Kentucky.
According to Business Insurance, Ms. Smith claims employees of the home health office routinely sidestepped federal rules and admitted patients into care without the clinical evaluation and documentation required.
When she complained to senior management about the practice, her concerns were ignored. One company official allegedly told Ms. Smith that the fraudulent scheme pulled in $6 million for the company annually.
Ms. Smith alleged that the company’s inaction left her no choice: she either had to ignore the fraud and effectively participate in it or resign. Because she did not want to be caught up in LHC’s alleged misconduct, Ms. Smith left the company and filed the whistleblower lawsuit, alleging LHC violated the whistleblower protections afforded by the federal False Claims Act and Kentucky state law.
A federal court in Lexington had previously dismissed her lawsuit on the grounds that LHC had not forced her to resign.
But on Friday, March 2, a three-judge panel of the U.S. Circuit Court of Appeals unanimously reinstated Ms. Smith’s whistleblower complaint.
“The question in this appeal is whether the plaintiff, Smith, adequately alleged that she suffered a discharge or adverse employment action when she felt it necessary to resign her job as Director of Nursing because her employer continued to defraud the government,” the ruling stated, according to Business Insurance.
“A jury could find that LHC created intolerable conditions by ignoring Smith’s complaint of illegal activity” and that “it is damaging to a professional to require her to engage in an activity she considers illegal and immoral with the threat of prosecution and loss of her nursing home license looming in the background,” the ruling explained.