At Frith & Ellerman Law Firm in Roanoke, we handle significant Virginia whistleblower cases, particularly those involving healthcare fraud in the Western District of Virginia. A recent development caught our attention as it demonstrates the powerful impact whistleblowers can have in holding large healthcare organizations accountable.
Important Case Advances in Western District of Virginia
In a significant development for whistleblower litigation in Virginia, the U.S. District Court for the Western District of Virginia recently unsealed a complaint against Sentara Health. Three Charlottesville residents—Sara Stovall, Ian Dixon, and Karl Quist—initiated a case alleging that Sentara improperly inflated local insurance rates in 2018 and 2019.[1]
This healthcare insurance fraud case, which falls within our area of practice, illustrates the critical role that committed individuals can play in exposing potential fraud against government programs under the False Claims Act.
Allegations in the Case
The unsealed complaint, filed in 2020, accuses Sentara Healthcare, its Optima Health Plan division, and Seattle-based consulting firm Milliman of:[2]
- Imposing “knowingly fraudulent surcharges” on Virginia health insurance
- Falsifying calculations related to Affordable Care Act premiums
- Engaging in intentional cost shifting in healthcare billing
- Generating “massive illicit profits” through insurance rate manipulation
The whistleblowers seek to recover more than $200 million in damages and civil penalties on behalf of the U.S. government under the False Claims Act—legislation that forms the cornerstone of our Virginia whistleblower practice.
Department of Justice Intervenes
In what we view as a significant development, the U.S. Department of Justice announced its intention to intervene in the case. The government plans to file its own complaint (the within 90 days, focusing on allegations that Sentara and Optima violated the False Claims Act by making materially false statements in their rate filings.
This intervention represents a crucial milestone in the case. Our experience has shown that government intervention in qui tam cases often substantially increases the likelihood of a successful outcome in whistleblower litigation.
Virginia Healthcare Whistleblowers Show Remarkable Perseverance
The case highlights the complex journey that healthcare whistleblowers must navigate. Stovall, Dixon, and Quist initially raised concerns about Sentara’s premium increases in 2017, speaking with The New York Times[3] and filing complaints with state and federal regulators. Their identities remained confidential until the recent court unsealing.
One whistleblower, Sara Stovall, expressed that she is “completely thrilled” the Department of Justice is taking on their case after years of investigation—a sentiment we often see among successful Virginia qui tam plaintiffs.
Defense Position in the Case
Sentara Health denies all allegations, stating that they were “fully compliant with the law” and that they had issued over $98 million in rebates to Virginia policyholders for the 2018 plan alone. They maintain that their participation in the ACA market was in response to “historic market disruptions” and at the request of federal and state officials.[4]
Implications for the Healthcare System
For our clients and community members in Western Virginia, this case illustrates several important points:
- Whistleblower Impact: Individuals who come forward with credible information can drive significant accountability in the healthcare system.
- Local Healthcare Fraud: These issues affect local communities directly through increased costs and potential reduced access to care.
- Virginia Whistleblower Protection: The legal system provides mechanisms for individuals to report suspected fraud while maintaining confidentiality during investigations.
How Frith & Ellerman Law Firm Handles Healthcare Whistleblower Cases
At Frith & Ellerman Law Firm, we specialize in representing whistleblowers in healthcare fraud cases throughout Western Virginia. If you have knowledge of potentially fraudulent activities in the healthcare sector, we can:
- Provide a confidential consultation to evaluate your potential whistleblower claim
- Guide you through the complex qui tam legal process
- Protect your rights as a Virginia whistleblower
- Help you understand potential outcomes and whistleblower rewards
We understand the sensitive nature of healthcare fraud reporting and work closely with our clients to navigate these complex cases.
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[1] Janney, Josh. Whistleblowers in Sentara Insurance Investigation Revealed. Virginia Business (Mar. 12, 2025) available at https://virginiabusiness.com/whistleblowers-in-sentara-insurance-investigation-revealed/.
[2] Id.
[3] Pear, Robert. Middle-Class Families Confront Soaring Health Insurance Costs. The New York Times (Nov. 16, 2017) available at https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiums-middle-class.html.
[4] See supra note 1.