Whistleblower lawsuit against hospital dismissed

A whistleblower lawsuit filed against Shenandoah Memorial Hospital by a former ultrasound technician who said she was a victim of a retaliatory firing has been dismissed by U.S. District Judge Michael F. Urbanski.

Urbanski gave the plaintiff, Tonya Scates, a chance to revive part of the lawsuit by filing an amended complaint on one of the claims if she does so within 30 days.

Urbanski’s 19-page written opinion rejected Scates’ argument that she had been wrongfully fired under Virginia law and that the firing was done in retaliation for openly stating her belief that the hospital was using questionable billing codes for ultrasound procedures. Whistleblowers are protected against retaliatory firing under the federal False Claims Act.

Urbanski said Scates, who described herself in court documents as concerned that the billing codes could be construed as an attempt to defraud the federal government’s Medicaid and Medicare program, never mentioned potential wrongdoing during two conversations with her supervisor, James Ziner, about the billing codes.

“She only highlighted “inconsistencies” in billing practices and never asked SMH to change its ultrasound policies, objected to these policies nor mentioned her belief that SMH’s billing practices might be illegal,” Urbanski wrote. “To engage in protected activity, Scates must do more than raise broad questions of concerns about internal policies and procedures.”

Urbanski said Scates did not state that she had warned Ziner of possible fraud charges against the hospital until her attorney had filed a brief and appeared for oral arguments, both of which came after she filed her complaint.

“Thus, for purposes of this motion, the court will only consider the allegations that appear on the face of Scates’s … complaint,” Urbanski wrote. “Based on these facts, Scates fails to state a plausible claim that SMH had notice that litigation was a ‘reasonable possibility.'”

Telephone messages seeking comment for attorneys representing Scates and the hospital were not returned.

Contact staff writer Joe Beck at 540-465-5137 ext. 142, or jbeck@nvdaily.com