Yesterday, I blogged about a pending multi-million dollar False Claims Act (FCA) lawsuit agains Pharm giant Wyeth. Today’s news brings another example of how the FCA can be used to bring gross misconduct to light. This case, involving a western Pennsylvania psychiatric institution has settled for far less money than many of the more highly publicized FCA cases, but the shocking allegations are what really caught my attention.

The whistleblower in this case, Dr. Stefan Kruszewski, was a psychiatrist reviewing records of the Southwood Psychiatric Hospital. Southwood is a private facility that houses over 100 juvenile boys who are wards of the state. For the care of these kids, Southwood is paid through state and federal contracts. Dr. Kruszewski reported that Southwood, in order to inflate their government payments, “…held juveniles who did not require hospitalization, prescribed and administered unnecessary medication to increase government reimbursements, and billed the government for care that was not provided.” (Pittsburgh Tribune Review)

The Department of Justice has settled this lawsuit and Southwood is paying $150,000 and is being forced to make necessary changes to raise its standard of care and clean up its act. Under the settlement, Southwood is not admitting any wrongdoing, but it is unthinkable that a hospital would take advantage of, indeed abuse,  vulnerable young children in order to make a quick buck off of the taxpayers. The story also shows how valuable the False Claims Act can be in bringing to light all kinds of misconduct when government money is involved. Congress should continue to work to pass current legislation which is designed to strengthen the FCA.