Massachusetts health system fired CFO for voicing concerns over billing, lawsuit claims

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Berkshire Health Systems in Pittsfield, Mass., allegedly fired its newly appointed CFO after he voiced concerns about the potential for widespread billing errors, according to a retaliation and wrongful termination lawsuit filed Oct. 22. 

Sean Fitzpatrick was chosen as the new CFO of the health system in June 2020, after several rounds of interviews. In the interviews, Mr. Fitzpatrick was repeatedly told that Berkshire Health Systems had several systemwide financial and accounting issues that needed to be addressed and that they were looking for a CFO that would make the "difficult and necessary changes to correct systemwide problems," according to the lawsuit.

Less than four months later, on Oct. 5, 2020, Mr. Fitzpatrick was terminated.

Mr. Fitzpatrick claims that around 2018 the Office of Inspector General issued an audit report revealing that the health system had submitted erroneous claims for hyperbaric oxygen therapy. After the OIG report, the health system conducted an internal audit, which found an error rate as high as 97 percent. The health system earmarked that it would need to send the government $5 million in overpayments because of the billing errors.

According to the complaint, Mr. Fitzpatrick was concerned about the high error rate and that the health system may owe more than $5 million to correct the errors. He also voiced concerns that the health system may have other billing issues as well, including that Medicare patients were possibly being billed at an "inpatient" as opposed to an "observation" rate, which could mean that bills were inflated because inpatient rates are higher.

On Sept. 24, 2020, at a Berkshire Health Systems Audit Committee meeting, Mr. Fitzpatrick told committee members that based on his experience, the high billing error rate for hyperbaric oxygen therapy based on their small audit sample was "indicative of, at best, systemic errors requiring more substantial repayments to the government, or, at worst, knowing under-reporting."

He also advised Berkshire Health Systems administrators that they had an obligation to engage an independent auditor to get an accurate picture of the billing practices for hyperbaric oxygen therapy and identify the right overpayment amount and fix any systematic errors.

According to the complaint, Executive Vice President and former CFO Darlene Rodowicz became upset at Mr. Fitzpatrick's recommendations, as she had been responsible for implementing and overseeing the billing practices at the time.

A few days later, on Oct. 1, 2020, Mr. Fitzpatrick was called into the health system's human resources department to discuss an "amicable separation." When he expressed he was planning to stay at Berkshire Health System for about a decade, no agreement was reached. On Oct. 5, 2020, he was sent a termination letter.

Mr. Fitzpatrick claims he was fired for voicing concerns about the billing practices and is seeking damages, including back pay, front pay, emotional distress, and attorney's fees and costs.

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