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Judge Orders Attorney Fees Dispute to Mediation in Qui Tam Action

January 8, 2020 | Posted in : Fee Dispute, Fee Dispute Litigation / ADR, Fee Entitlement, Hourly Rates / Hourly Billing

A recent Law 360 story by Khorri Atkinson, “Hospital, Whistleblower Told to Mediate Atty Fees in FCA Suit,” reports that Health Management Associates Inc. and a whistleblower, whose complaint against the now-defunct hospital chain helped the government secure more than $260 million to settle fraud charges, were ordered by a D.C. federal judge to mediate their dispute over an undisclosed amount in attorney fees.

U.S. District Judge Reggie Walton certified the case for two months of mediation during a brief hearing after attorneys representing HMA and whistleblower Bradley Nurkin admitted they're gridlocked.  The parties are battling over whether the fees racked up throughout the litigation should be calculated based on rates offered in Florida, where the suit was initially filed, or in Washington, D.C., where it was later transferred as part of multidistrict litigation.

If the hospital chain and Nurkin, a former CEO of HMA affiliate Charlotte Regional Medical Center, fail to reach a compromise after the 60-day timeline, Judge Walton told the attorneys he would send the case to the Middle District of Florida.  HMA attorney D. Hunter Smith of Robbins Russell Englert Orseck Untereiner & Sauber LLP initially urged for the case to be remanded immediately because all pretrial matters have been concluded and the only remaining issue is the attorney fees, which Nurkin is entitled to.

The attorney added that Nurkin wants to keep the case in D.C. only because his counsel would receive a higher hourly rate than what is offered in the Sunshine State.  Moreover, a portion of Nurkin's fees were incurred in Florida, Smith said.  But Edward Sanders of Sanders Law insisted that D.C. is the most appropriate location for his client, who filed the whistleblower complaint under seal in December 2011.  The suit alleged that HMA paid local emergency room physicians and pressured them to unlawfully bill false inpatient service claims and fees under Medicare and Medicaid.  The kickback scheme at that facility had cost the government between $100 million and $150 million, according to the complaint.

In response to the hospital chain's remand bid, Sanders said in a recent filing that after the U.S. Department of Justice intervened in Nurkin's case in 2013, and seven other similar whistleblower cases, the litigation was transferred to D.C. at HMA's request.  And because the DOJ reached the $280 million settlement with HMA in 2018 in the district, "qui tam rates commonly charged" in D.C. should be used to determine the attorney fees, Sanders said. Nurkin had received $15 million from the settlement.