Damages Upheld For Medicare “Whistle-Blower” Employee


When Illinois anesthesiologist Michael Brandon was fired he was sure it was in retaliation for his efforts to uncover possible Medicare fraud. He sued his employer, Anesthesia & Pain Management Associates, Ltd., and won a jury verdict. That was not, however, the end of the legal wrangling.

Dr. Brandon had worked for APMA for about three years when he began to suspect that the firm’s owners were falsifying Medicare reimbursement claims. With complicated Medicare reimbursement rules the opportunities for abuse were substantial.

Anesthesiologists and anesthetists work together, with the doctors overseeing the anesthesia. When one doctor supervises more than four anesthetists at a time, the doctor can not bill Medicare for his or her own services—Medicare assumes that the doctor is not able to directly supervise that many different procedures. When the doctor personally performs the work in a given surgery, there is no billing for an anesthetist. But if the anesthesiologist “medically directs” fewer than five anesthesia administrations at a time, both the anesthesiologist and the anesthetist can bill for the same procedure.

That Medicare policy explains what Dr. Brandon suspected was going on at his firm. He wondered whether some doctors might not be falsifying their records to indicate that they were “medically directing” procedures that they had actually performed themselves. Others might have altered records to indicate that they supervised fewer anesthesia administrations in order to bill for their own time as well as the anesthetists’.

When Dr. Brandon contacted Medicare to find out what the regulations provided, other doctors in the firm became upset that he might have given too much information to the government agency. A few weeks later Dr. Brandon was told his work was unsatisfactory (despite the fact that he had recently received a raise and promotion) and he was discharged.

Dr. Brandon sued his former employer for “retaliatory discharge,” a cause of action intended to protect so-called “whistle-blowers” from job actions. Illinois (like Arizona) is a “right to work” state, and ordinarily an employee can be discharged for any reason. Public policy, however, protects employees from being fired in retaliation for pointing out wrongdoing. The question in Dr. Brandon’s case was whether Illinois public policy protected him from discharge for pointing out violations of federal law and regulations.

The jury in Dr. Brandon’s case believed his side of the story and awarded him damages. The judge overseeing the trial, however, reversed the jury’s verdict, finding that Illinois public policy does not extend to protecting federal whistle-blowers. On appeal the U.S. Seventh Circuit Court of Appeals disagreed and reinstated the jury verdict; it also ordered a new trial on Dr. Brandon’s claim for punitive damages, which the trial judge had refused to submit to the jury. Brandon v. APMA, Ltd., January 18, 2002.

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