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Whistleblower Tells Her Story In Washington

Nov 10, 2003 | South Florida Business Journal,

Sarah Grim, who raised questions about the bidding system at Florida's Agency for Health Care Administration (AHCA) in 2000, has the interest of the U.S. Senate Finance Committee.

The committee is interested in knowing if pressure from federal health care regulators led to Grim's contract as CEO not being renewed at the Missouri Patient Care Review Foundation (MOPRO).

A letter by Grim's attorney indicates that her whistleblowing in Florida or a case in Missouri may have irritated officials at the federal Centers for Medicare and Medicaid Services (CMS) and prompted questions to Grim's board about her qualifications.

A suit by Grim against MOPRO alleging improper termination was settled in September before a trial could commence. The settlement terms are sealed.

A deposition in that case says Grim wrote an e-mail critical of Ruben King-Shaw Jr., who had gone from being Florida's top health care regulator to a senior CMS executive.

Grim's allegations about a bidding process at AHCA, when King-Shaw was the agency leader, were the basis for The Business Journal's 23-part series, "Unhealthy Allegations."

In her wrongful dismissal suit, Grim alleged her firing was retaliation for telling the truth about criminal activities in the health care system.

Finance committee staffers are looking at leads involving CMS employees and the Florida and Missouri investigations.

"We have sent out document requests," said Emilia Disanto, a special counsel and chief investigative counsel for the Senate Finance Committee.

Disanto said she would not characterize the requests as an active investigation at this time. The committee had received some of the documents and staffers are assessing the contents and "poking at various things," she said.

A letter from Grim's attorney to Dean Zerbe, chief investigative council for the Senate Finance Committee, states Grim may have incurred the wrath of senior CMS officials for testifying in the Missouri case or exposing "possible criminal activity in Florida's state Agency for Health Care Administration."

Disanto would not comment on the scope of the document request, targets if any or when the exercise would be completed.

The office of U.S. Sen. Charles "Chuck" Grassley, R-Iowa, the chairman of the Senate Finance Committee, is interested in protecting whistleblowers who expose Medicare and Medicaid fraud. His office, Grim said, appears to be the moving force behind the document probe.

Grim is known in South Florida from her tenure as president of the South Florida Hospital and Healthcare Association from 1991 to 1993.

"When I was in Miami, someone threw a pipe bomb into my condo," she said. "I happened to be looking into an offshore insurance company that was missing $10 million."

She moved backed to Missouri, where she had been raised in Kirksville, a small town where her grandfather owned a hospital. After graduating from the University of Missouri, she worked as a lobbyist and reimbursement specialist for the Missouri Hospital Association. In 1984, she went to work for Baptist Medical Center in Kansas City.

Grim's testimony in the 1997 Baptist Medical Center kickback and fraud case resulted in four executives going to prison for 51 months and the U.S. government recovering $17 million, Kleiman's letter states.

"Although Ms. Grim left the hospital shortly after these deals were cut, she never forgot them. It was not until many years later, in 1997, that she was contacted by the FBI and asked what she knew about this scam," Kleiman letter states.

Grim initially thought her contract non-renewal at MOPRO was due to prolonged harassment springing from that case, but some MOPRO board members thought it might have stemmed from her whistleblowing acts in Florida, Kleiman's letter states.

In early 2000, when MOPRO's board asked her to seek additional oversight work outside Missouri, Grim looked to Florida and an upcoming Invitation To Negotiate (ITN) for a $25 million contract at AHCA.

Grim said MOPRO had been offered the contract if it paid a $1 million fee to two well-connected Florida lobbyists. One of the lobbyists told Grim his pull went "all the way to the top," Kleiman's letter states.

Shortly thereafter, the FBI started an investigation, called FL ITN. (The Miami FBI office refuses to say whether that investigation is closed or ongoing.)

Over the next few months, the bid was cancelled and the contract was ordered re-bid by AHCA executive director King-Shaw, who said lobbyists had no influence with his agency.

In a June 2000 interview with The Business Journal, King-Shaw said his agency had been cleared in an investigation by the agency's inspector general.

When The Business Journal asked for a copy of the investigation, King-Shaw said it was an "oral investigation." He said there were no notes, reports or lists of employees interviewed or questions asked. King-Shaw and his in-house counsel, Julie Gallagher, said the lobbyists were not questioned or interviewed.

After failed attempts to hire a new reviewer, the problem disappeared. A small item inserted by state Sen. Ron Silver, D-Miami, into an omnibus health care legislative bill in 2001 simply did away with any state-contracted peer review oversight of Medicaid funds.

That happened even though Florida is considered one of the epicenters nationally of Medicaid fraud because of its huge population of elderly residents.

AHCA was also reorganized and King-Shaw moved on to became COO in the renamed federal Centers for Medicare and Medicaid Services in July 2001. CMS oversees health care finance and oversight reviewers, among other things.

Board doesn't renew Grim's contract
MOPRO was one of those oversight reviewer companies. Grim's contract was not renewed in July 2001 after employees of CMS contacted MOPRO executives and board members to express their "concerns" about Grim, Kleiman's letter states. Just a few months earlier MOPRO had passed a CSM review with "flying colors."

Among those contacting MOPRO was Brenda Burton, a CMS regional official.

Earlier, Grim had sent Burton an e-mail critical of King-Shaw's federal appointment, a deposition by Burton in Grim's wrongful dismissal suit states. Burton said she shared the e-mail with a superior because it implied King-Shaw was corrupt.

King-Shaw said the Senate committee has not contacted him.

"Anything going on currently is probably just checking for confirmation that all issues were addressed," he said. "In my first two years at CMS, I recused myself on all issues related to Florida. I haven't heard from Miss Grim in probably two years."

After her contract was not renewed, Grim was unemployed for nine months, almost lost her home and had to take a job out of state which paid one-third of what she formerly earned, she said.

King-Shaw has had new roles this year.

On Jan. 16, The Business Journal reported he was leaving CMS to become senior adviser to the Secretary of the Treasury for health insurance policy. But on Feb. 5, King-Shaw was quoted in his CMS capacity in a press release by deNovis, a venture capital-backed software firm in Lexington, Mass. DeNovis announced a $50 million joint contract with IBM to help CMS design a better system to process Medicare claims.

"We've got the best minds in government, technology and health care working together to revolutionize our health care transaction system," King-Shaw said in the press release.

King-Shaw said he is now a strategic advisor to deNovis after serving as interim chairman earlier this year during its reorganization.

He still has Florida ties, too. In September, WellCare Health Plans of Tampa, which has about 500,000 members, announced King-Shaw had joined its board.

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