Here’s to an honest man
But you will find in him a stubborn honesty and perseverance, and considering what Alderson achieved, we all owe him at least a "thank you." The Montana whistleblower helped U.S. taxpayers save billions of dollars by exposing one of the largest cases of corporate fraud in U.S. history. He did it nearly alone and against incredible odds.
His fight began on a wintry day 11 years ago this month when he drove from his home in Whitefish, Mont., to a federal district courthouse in Butte. There, he filed "a whistleblower complaint" under provisions of the federal False Claims Act. Alderson was angry, even humiliated. He’d been a good accountant, he felt, but he’d been fired for refusing to go along with a phony accounting system initiated at North Valley Hospital in Whitefish. The system seemed clearly designed to overcharge federal taxpayers for Medicare services.
The billing system was put in place by the giant medical services provider, Quorum Health Group, a subsidiary of Hospital Corporation of America, (HCA), the now-notorious bilker of the government.
As Alderson, a career hospital administrator, tells it, he was ordered to keep two sets of financial ledgers: One documented expenses for services rendered; another inflated invoices to be submitted to government auditors for reimbursement.
Alderson was terminated for calling the practice into question at his hospital, but when he began checking elsewhere around the country, he uncovered the same fraud being committed at hundreds of for-profit hospitals.
When his decade-long quest for justice began, Alderson acted as his own legal counsel, facing three law firms representing Quorum and HCA, each with over 1,000 attorneys. Not only did he encounter a legal counterattack blitzkrieg, but by blowing the whistle he was also transformed into a pariah within the medical profession. No one would hire him.
Alderson drained his retirement and savings accounts while compiling evidence, and he moved 14 times with his wife, Connie, to make ends meet. Eventually, fearing retribution, he enlisted attorneys who convinced the U.S. Justice Department to intervene.
His case was aided mightily when another health-care insider, John Schilling, came forward and provided information which led to the FBI raiding 35 hospitals managed by HCA and Columbia Healthcare Corp. The raids netted loads of incriminating documents.
Late in 2003, after spending hundreds of millions of dollars fighting the case, HCA finally settled with the federal government, which gave Alderson and Schilling multimillion dollar rewards. HCA and Quorum have also paid the government nearly $1.7 billion in settlements. What’s more, experts say that blowing the whistle on the corporations’ illegal practices cut Medicare and Medicaid fraud by some $12 billion.
Looking back, this modest number-cruncher who is descended from a pioneer family in Bozeman, Mont., credits his family’s support and his membership in local Rotary clubs with giving him the courage to persevere.
In particular, Alderson points to Rotary’s famous Four-Way Test, which asks its members a quartet of moral questions when considering business and other dealings: Is it the truth? Is it fair to all concerned? Will it build good will and better friendships? Will it be beneficial to all concerned?
"Government can’t legislate good ethics," Alderson says. "That’s got to come from ethical individuals who run companies."
Another impetus for Alderson to do what he did was thinking about the values he was teaching his college-aged kids. "You see your kids, and you realize you may have lost your job, your career, most of your savings, everything you’ve worked for, but if you lose their respect, it’s something that cannot be replaced," he says.
"I wanted to be able to look my kids in the eyes and tell them that truth and honesty really do matter."