Holland & Hart Healthcare Law Blog

GENERAL COUNSEL LIABILITY IN HEALTH CARE ETHICS AND COMPLIANCE OVERSIGHT.

It is not easy being General Counsel for a health care system and growing more difficult with the advent of Corporate Integrity Agreement and Public Securities Obligations.  It is also dangerous and unwise to accept responsibility for Chief Compliance Officer as well as Chief Legal Officer. The ongoing travails of Christi R. Sulzbach, Esq. former Executive Vice President and General Counsel and Chief Compliance Officer of Tenet Healthcare Corporation is a case in point. Ms.Sulzbach, who resigned her position at Tenet in 2003, settled a case brought against her by the Securities Exchange Commission. arising out of a Tenet scheme to defraud Medicare by over reporting its costs so as to increase Medicare payments under its enhanced payment program for “Outlier” patient conditions.  Tenet settled for 10 Million Dollars several years ago. 

Greg Piche' and Joan Ditges RAC Audit Audioconference Scheduled for June 18, 2009

Greg Piche' and Joan Didges, R.N. will present an audioconference on RAC Audits captioned "How to Guard Your Practice from Medicare RAC Audits." on June 18, 2009 at 1:00 P.M. ET. The Webinar is sponsored by Part B News and Decsion Health.  Further Information can be found at

http://www.decisionhealth.com/conferences/A1799/home.html

TWENTY-FIVE STEPS IN DEFENSE OF RAC AUDITS.

Recovery Audit Contractors (RACs) are in the process of saddling up for the nationwide roll out of their Medicare payment recoupment mission. Here are twenty-five recommended proactive steps to circle the wagons and defend the RAC threat.

1. Develop and implement a written audit defense plan- the government bounty hunters are coming your way and they will be looking for the  low lying fruit.

2. Select an audit team or responsible persons depending upon the size of your organization. Including if appropriate internal audit, billing and coding, medical records, risk management and the CFO.

3. Assign specific team member responsibilities in dealing with anticipated audit issues.

4. Consider running an internal pre-audit to identify vulnerabilities such as “medical necessity” and “duplication of services.”

Clink Awaits Record Shirking Shrink.

Maria Carmen Palazzo, M.D., PhD., MMM, will soon have some numbers to add to the letters behind her name as she likely will find herself behind bars for Medicare Fraud and for criminal failure as a clinical investigator to maintain records of clinical drug studies.  The New Orleans psychiatrist contracted with SmithKline Beecham to participate in clinical drug studies related the safety of Paxil in the treatment of children and adolescents with major depressive disorders and obsessive compulsive disorders. She failed to comply with the study protocols and failed to personally review all of the information in the patient charts. She apparently accepted about $5000.00 per study, for some patients at least who were never diagnosed with the conditions.

RECOVERY AUDIT CONTRACTORS (RAC) RETURN MARCH 1.

 They’re back!!!. After a brief intermission to allow the Government Accounting Office to deal with challenges to contract awards, the Government is again gearing up for the 50 state roll out of the Recovery Audit Contract Program where contingent fee contractors get to rummage through the records of hospitals, physicians, DME suppliers  and other Medicare suppliers to see if they can enrich themselves on the identification and recovery of Medicare overpayments going back 4 years.  The wildly successful six state pilot recoupment program implemented in New York, California, Florida, Arizona,  South Carolina and Massachusetts will be extended to a wider group of states divided into 4 regions, artfully described as A, B,C & D. From 2005 to 2008, the pilot contractors earned themselves a hefty $187,000.000.00 on $1.03,000, 000,000. in identified overpayments based upon their contingency ratios of 9 to 12.5%..

Exclusive Anethesia Arrangement Fails Personal Services Exemption Under Stark.

Normally, anesthesia services contracts do not receive a lot of scrutiny with respect to Stark or Anti-kickback Statute ("AKS") compliance. Recently, the federal 3rd Circuit Court of Appeals had a chance to review and reverse a summary judgment granted in favor of a hospital and its anesthesia providers who claimed that they were protected by the "personal services" exemption from Stark and the AKS. The Plaintiff in the Qui Tam lawsuit, United States  ex. rel. Kosenske v. Carlisle HMA, Inc., 3rd. Cir.,No. 07-4616, 2009), was a member of the anesthesia group which entered into an exclusive contract with the Carlisle Hospital for anesthesia services. The hospital provided free space and services to the anesthesia group, which is not an uncommon practice because that is generally considered part of the "arms length"negotiation price for the anesthesia services.

Getting Out of the National Practitioner Data Bank, Part I

Once a physician or other health care provider is reported to the National Practitioner Data Bank, he or she is normally there for life. It is extremely difficult to get out. Some physicians have remarked that it is like having a "record," which like in the criminal context can result in the denial of hospital privileges, denial of jobs and potentially the destruction of careers. All hospitals are required to access the data bank reports on physicians every two years during hospital privieges re-certifications. State disciplinary actions are required to be reported as well as malpractrice insurance payments (no matter the amount). Peer review discipline is also reportable, although their are some limited exceptions.

Physician Recruitment Mutual Mistake

This is an extension to our previous post on Physician Recruitment Fraud (January 24, 2007).  There is more and more litigation surfacing between hospitals and recruited physicians when hospitals lure physicians into a new startup practice in their market and the physician is unable to sustain a viable practice in the new community.  The physician is forced to move on to earn a livelihood and the hospital for regulatory reasons feels it is obligated to enforce its contractual obligation with the physician for the repayment of the money if the physician leaves before the forgiveness period (typically 3 years). The physician did not sign on for serving in an Americorp or Peace corps lifestyle and raises a number of defenses including fraud in the inducement and mutual mistake.

Physician Recruitment Fraud

There appears to be a growing trend toward the fraudulent inducement by some hospitals of physicians to relocate their practices and move to a new hospital cachement area based upon false representations as to the assistance the hospital can or will provide to establish the physician in the community, the "pent up need" for the physician's services in the community and the existence of a favorable payer mix in the community.  Many of these representations are made by head hunters out to score a "head" at all costs.  A physician with a useful specialty for the hospital moves or starts his or her practice in the community and frequently finds that he or she is treated pretty much an employee without the security of a salary.  The hospitals use the inducement of an "income guarantee" for the first year to help jump start the practice.  The income support usually runs for a year and then disappears.  The amount advanced in the first year is then converted into a loan with the balance to be forgiven over the next three years if the physician continues to practice in the community.

Health Law Lawyer Thinking Outside Box Ends Up In One.

After reviewing many official advisory opinions from the Department of Health and Human Services Office of Inspector General, one might be forgiven an occasional fantasy that one might be able to do it better.  Rare is it that one actually has the opportunity to act on the impulse.  On November 13, 2006, the United States Attorney's Office for the Western District of Michigan issued a press release announcing the successful apprehension and prosecution of Michigan health law attorney, Philip Stoffan for mail fraud in apparently forging is own advisory opinion on a mock up of HHS-OIG stationery.  Mr. Stoffan's efforts were in support of an anticipated joint venture between his client, a physician group and a physician therapy group. No doubt the physician group was negotiating a turn key arrangement with the physical therapy group to provide therapy the group's patients to be billed for by the group. Some touchy issues there.