Whistleblower Lawsuit Filed Against Minnesota Department of Human Services – Demoted for Speaking Out

March 19th, 2014

A long-time hospital payment rates official at the Minnesota Department of Human Services (DHS), Paul Olson, filed a whistleblower lawsuit against his employer today. The complaint alleges that DHS upper management have conducted a “brutal” internal campaign of retaliation against him, among other things, for refusing to exempt the Fairview University Medical Center (FUMC) Amplatz children’s unit from a state-mandated reduction in Medical Assistance (MA) payments.

Representing Olson is the Minneapolis law firm Halunen Law – a firm known for its successful litigation on behalf of whistleblower clients. The lawsuit, filed in Ramsey County District Court in St. Paul, Minnesota, seeks damages in excess of $50,000 to compensate Olson for career losses and psychological distress. Olson is asking for a jury trial. A copy of the complaint can be accessed here: Complaint and Jury Demand.

“Paul Olson was just doing his job for the state of Minnesota by refusing to approve an illegal financial arrangement for Fairview’s Amplatz children’s unit,” says Clayton Halunen, an attorney with Halunen Law. “His superiors, for whatever reason, did not want to let Olson do his job. Instead, they found someone else they could bully into doing what they wanted and then demoted Olson to a demeaning position. But Olson didn’t just fade away into bureaucratic limbo. He continued to fight for what he believed was the right thing to do, and now he’ll have his day in court to prove it.”

Olson alleges that top officials at the DHS, including Scott Leitz, assistant commissioner of the DHS Health Care Administration, demanded that he exempt FUMC’s Amplatz children’s unit from the state legislature’s mandated 10 percent reduction in MA payments beginning in late 2011. Olson refused, stating that the exemption only applied to institutions like Gillette Children’s Hospital and would be illegal if granted to FUMC. In late 2012, DHS officials bypassed Olson and ordered another employee to implement the exemption, including a plan to retroactively reimburse the hospital for “under-payments” during the time that Olson withheld his consent for the preferential exclusion.

In January 2013, Olson also refused to approve a request for a rate increase for Behavioral Health Care Partners (BHP). As stated in the lawsuit, Olson argued that DHS would be in violation of federal law if it granted BHP’s specific request for an increase in reimbursement for certain bundled rates for mental health services.

One month later, Olson was relieved of his rates management position and reassigned to the post of “special projects.” Olson – still employed at DHS albeit in a much-reduced position, and now excluded from any meaningful work in his area of expertise – continued to challenge what he observed to be illegal conduct, including the exemption granted to FUMC. DHS finally launched an internal audit that concluded that the exemption given to FUMC was contrary to what the state legislature mandated, and therefore illegal. FUMC had already received $500,000 in Medical Assistance payments that it was not entitled to by the time of the investigation’s conclusion. State and federal taxpayers could potentially have overpaid FUMC by more than $11 million over a four-year period ending in 2015 if the exemption had gone unchallenged, according to DHS findings.

Besides Leitz, other DHS officials named in the lawsuit as having a role in the effort to silence Olson are James Golden, deputy assistant commissioner to Leitz, and Mark Hudson, division director of DHS’s Purchasing & Services Division.

For more information about Halunen Law and whistleblower retaliation, visit the firm’s website at halunenlaw.com.

Leave a Reply

Your email address will not be published. Required fields are marked *