LOS ANGELES (Legal Newsline) - A would-be whistleblower who was on the job for less than six months convinced California insurance regulators a detoxification center ran up tens of millions of dollars in improper bills but a trial judge was correct to dismiss her claims for lack of evidence, an appeals court ruled.
Mary Lynn Rapier was hired in April 2016 as director of clinical services at Serenity Recovery Center, an adult detox center operating within Encino Hospital. She had no prior experience with adult recovery centers and was discharged in August 2016. In November, she filed a qui tam whistleblower lawsuit against 10 defendants including Serenity, claiming they billed without the proper license. In 2018 the California Department of Insurance elected to intervene, claiming up to $180 million in damages and penalties.
The case proceeded to trial before a judge after Rapier and the state failed to pay jury fees on time. The judge rejected all claims, finding Rapier’s witnesses unreliable and no evidence Serenity had operated without a license or that it had made any attempt to deceive insurers. The judge also rejected claims Serenity had paid anyone to steer patients to it. Rapier’s theory was a long-term facility referred patients to Serenity in exchange for Serenity’s agreement not to interfere with their transfer to the long-term facility.
But “there was no evidence Serenity or Encino Hospital either received compensation for referring patients to residential treatment centers or paid for referrals to the Serenity program,” wrote the Second Appellate District Court, Division One, in a Jan. 20 decision. “Little to no evidence” supported California’s theory that it was unusual or illegal for patients to enter an acute detox center with pre-planned transfer to a long-term facility, the court said.
The trial court expressed concern that even after California took over the case, Rapier’s attorneys were actually in charge. She was represented by Waters Kraus & Paul and Bartlett Barrow. The trial court found that Rapier’s testimony on key issues was not very credible, and “overall, Rapier did nothing to advance CDI’s case.”
The appeals court upheld $20,000 in costs for the winning defendants for copying trial exhibits.