Madison Center whistleblowers to get reward, property

May 30, 2011

Madison Center is a mental health/psychiatric complex in South Bend, Indiana.  Kathleen McCoy and Jean Marie Thompson risked their careers by bringing a whistleblower lawsuit against the Center, exposing $10 million in Medicaid fraud.  


There will be a reward for two whistleblowers who exposed widespread fraud at Madison Center.

The discovery of some $10 million worth of Medicaid fraud on the part of the South Bend-based mental health care provider started when two employees came forward to report problems.

“These are two social service professionals who are very committed to their profession and who did so at personal risk to themselves,” said Attorney Shaw Friedman.

While Kathleen McCoy and Jean Marie Thompson didn’t do it for the money, they are degreed professionals who risked their careers and have lived with the emotional consequences of the case for nearly 10 years now.

“Fortunately here, there is some financial compensation, but it’s, it certainly doesn’t make up for the emotional and tangible investment that they made,” said Friedman.

An agreement accepted in St. Joseph Circuit Court this week calls for $150,000 of escrowed funds to be paid to the whistleblowers, who will also get title to a piece of property owned by Madison Center and valued at $250,000.

Friedman says his clients feel the real payoff is the strong message the case sends to the public at large.

“And they’re hoping that a strong message is sent about the need for oversight and accountability going forward, and particularly community board members who serve on a non profit need to take their responsibilities seriously,” said Friedman.

“It’s critical to ask the tough questions to probe deeply into the annual accountant’s report, to look at the management’s notes to see where the recommendations are. The warning signs were there, and you’ve got a board of directors drawn from, you know, pretty experienced sections of that community that looked the other way while Jack Roberts and his top management team presided over an empire that was essentially eating itself from within.”

The State of Indiana was also a party to the agreement.  According to Attorney General Greg Zoeller, "The settlement establishes with legal finality that the Madison Center corporation is withouth any funds whatsoever to repay the any of the disputed overpayments.  Federal regulation requires this final dissolution of a Medicaid provider as proof that hte state is unable to recover disputed overpayments."

Source: Mark Peterson, "Madison Center whistleblowers will get reward,", May 13, 2011.


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