February 15, 2014

Whistle-blower finds himself fired

A whistle-blower runs afoul of a state agency, which says he should blow the whistle on his own time.

Joe Vincoli has made a name for himself as a whistle-blower, saving the state millions of dollars by pointing out examples of wasteful spending and lax oversight. Two years ago, a law strengthening whistle-blower protections was enacted because of his efforts.

But now Vincoli might have whistled himself out of a job.

Vincoli is fighting to keep his position with the state Department of Public Safety, petitioning an administrative law judge to put him back on the state’s payroll. He contends the agency fired him in December as retaliation for his persistent efforts to report theft, embezzlement or misuse of state property.

Vincoli, whose job focused on health care costs in the state prisons, was fired two months after the agency reclassified his position to make it exempt from the protections of the state personnel law. The move made it more difficult for him to appeal his dismissal. His attorney calls what happened a “sham” meant to cover up the department’s real motive.

The agency disputes that and says the position Vincoli held was redefined. The job and its qualifications changed, so the person who held the position had to change, said Pamela Walker, spokeswoman for the Department of Public Safety.

“There was and is no retaliation,” Walker said.

And while Public Safety is the agency Vincoli is battling now, his original beef had nothing to do with his own department. Rather, it involved his concern with state money that flowed to privately run Wake Forest Baptist Medical Center in Winston-Salem. The department wanted him to stop spending state time on the matter.

Vincoli’s attorney, Michael C. Byrne of Raleigh, says firing Vincoli was no way to treat someone who has saved the state money in the past and who has had the highest employee rating of “outstanding” and never been disciplined for anything.

“Why fire a guy this good?” Byrne said.

Prompting an audit

Vincoli’s road to whistle-blower has been a contentious one.

Vincoli’s battles began while he was the director of managed care at Baptist Hospital in Winston-Salem. He was fired in 2007 in a dispute that he believes was over federal pension issues.

He also says he told the hospital that it was being overpaid by the public health insurance plan for state employees and teachers.

Vincoli, who lives in the Forsyth County town of Clemmons, contends the hospital told him not to notify the State Health Plan about the overcharge and to “let sleeping dogs lie.” But in 2009, he did report the issue to the state.

The State Auditor’s Office looked into his claims and, in 2011, issued an audit that found the health plan had overpaid the hospital $1.34 million over five years. The hospital denied any wrongdoing and did not refund any money to the state. The state made no effort to recover the money.

The hospital sued Vincoli in early 2011, accusing him of “unjustified, vindictive, malicious and gratuitous” actions. Several months later, it dropped the lawsuit.

“Joe Vincoli is someone who, if he becomes aware that the state is being defrauded, he believes it is his duty to report it to the state,” his attorney at the time, Philip Michael, told The News & Observer for a 2011 story about the audit.

The state auditor expanded that original probe into a broader review of issues involving the health plan and determined in 2011 the plan might have overpaid as much as $49 million in medical claims over three years to multiple hospitals.

Saving the state money

The state’s whistle-blower law was written to protect employees, but it didn’t apply to tipsters who weren’t state employees.

In 2012, reacting to Vincoli’s role in the Baptist Hospital case, the General Assembly changed the law to extend protection to anyone alleging wrongdoing involving the State Health Plan. It was signed into law by Gov. Bev Perdue.

By that time, Vincoli was working for the state, hired by the prison division in 2010 to work on managed care and similar issues after a state audit found North Carolina had little control over skyrocketing inmate medical costs.

There, he helped implement two major cost-cutting measures: qualifying patient inmates for Medicaid and developing a formula to save the state about $45 million a year by paying hospitals a lower rate to treat prison inmates. He also helped with the opening of the new hospital at Central Prison in Raleigh and analyzed hospital bills.

Jennie Lancaster hired Vincoli at the state Department of Correction when she was chief operating officer. She retired in 2013.

“I would absolutely say Joe had a major role in cutting health care costs,” Lancaster said.

But Vincoli wasn’t done with Baptist Hospital. In 2013, noting that new Public Safety Secretary Kieran Shanahan sent out a directive to employees to report anything improper they knew about, Vincoli submitted a form to his supervisor suggesting the issue with the hospital and the health plan was more serious than just administrative procedures. He thought the State Bureau of Investigation should look into it.

According to emails obtained from the department, Vincoli didn’t hear anything back and so he contacted the state Department of Justice, which said it hadn’t received the information. When he tried to find out what happened, the public safety agency told him it had previously been referred to the SBI and didn’t need to be submitted again.

In 2012, the SBI had opened a preliminary inquiry into Vincoli’s concerns about the hospital at the request of the Forsyth County district attorney. An agent concluded that there was no fraud involved.

Wasting leadership’s time

When Vincoli persisted that he had new information – he said it was from emails obtained in the discovery process in his lawsuit with Baptist Hospital – Public Safety’s general counsel firmly replied that he should not spend any more work time on a matter outside the agency. State law requires employees to report theft, embezzlement or misuse of state property to their immediate supervisor; it doesn’t specify that the allegations must be confined to the department where the employee works.

Vincoli’s response was to email the director of prisons, questioning whether the agency lawyer, Ellis Boyle, had a conflict of interest because Boyle used to work for the large law firm that represented Baptist Hospital, although he was not involved in Vincoli’s issues.

Boyle was less polite in his next email to Vincoli in August.

“While I am certain you understood that my email yesterday was not a suggestion or a discussion point, let me clarify. You are NOT to waste any further government time on this issue,” Boyle wrote. “Every time you raise this topic, you force the leadership of DPS to waste time thinking about it and responding to you. Do not do it again.”

Boyle made it clear that he didn’t know if Vincoli’s allegations of fraud were legitimate or not, but said Vincoli could pursue it on his own time. Boyle added that he hadn’t worked at the law firm since 2010, and wasn’t involved in the hospital lawsuit against Vincoli.

In September, Boyle was promoted to deputy secretary of the agency, and retained his role as general counsel. In October, Vincoli was notified that his job was being declared exempt from the state personnel act because it was now considered managerial. The effect of the change is that Vincoli was considered a manager who could be fired at will.

In December, Vincoli was dismissed.

He challenged the firing in his petition filed last month, arguing his job was not managerial in its duties. He is waiting for it to come before an administrative law judge. If the judge rules that Vincoli was exempt from the personnel act, his effort can be dismissed. If that happens, Vincoli could file a lawsuit in Superior Court under the whistle-blower act.

Vincoli says he has applied for two dozen state jobs without luck. He believes he has been blackballed. Staff writer Joseph Neff contributed.

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