Holland & Hart Healthcare Law Blog

COMPLIANCE CODE OF CONDUCT – CONTEXT OR PRETEXT

 In Mark Thompson v. Quorum Health Resources, Inc., 1:06-cv-001658, (W.D.Kentucky, Bowling Green Div , Dec. 7, 2009), the U.S. District Court rejected the Defendant Quorum’s motion for summary judgment in a retaliation action brought by a former Quorum hospital CEO, who claimed that Quorum terminated him in retaliation for his filing an earlier Qui Tam lawsuit against Quorum. Qui Tam suits are “private attorney general” cases brought to collect funds under the federal False Claims Act for fraud against the federal government.. In the Qui Tam case, Mr. Thompson asserted that Quorum fraudulently selected a Group Purchasing Organization for its hospitals which benefited Quorum to the detriment t of individual hospitals.  That case was dismissed with prejudice.

 

IOWA HOSPITAL COUGHS UP $4.5M TO FEDS TO SETTLE STARK CLAIM THAT IT OVER COMPENSATED EMPLOYED DOCS.

In 2005 a group of physicians from Cedar Valley Medical Specialists in Cedar Valley, Iowa raised concerns with Sen. Charles Grassley, then Chairman of the Senate Finance Committee and with the IRS that Covenant Medical Center in Waterloo, Iowa was over compensating some of its employed physicians. According to 990s filed by Covenant with the IRS orthopedic surgeons Dr. Gary Knudson and Dr. Richard Naylor were paid $2.4 Million and $1.00 Million respectively for their services in 2002.  Dr. Victor Lawrinenko received $2.1 Million.

TEXAS “WHISTLE BLOWER” NURSE INDICTMENTS RAISE EYE BROWS.

 Things happen differently in West Texas where it can rain red mud. In Winkler County Memorial Hospital in Kermit, Texas two nurses who consider themselves as “patient advocates” have been indicted by Winker County Attorney, Mike Fostell for violation of Texas Penal Code 39.06, the misuse of official information, a third degree felony with the possible sentence of ten years.  Their crime?  They filed an anonymous complaint to the Texas State Board of Medicine concerning Dr. Rolando Arafiles, in which they assert that Dr. Arafiles improperly encouraged patients to purchase herbal remedies from him and wanted to use hospital supplies for a procedure in the home of a patient.  The nurses provided medical file numbers of six patients to the board.  The action of the nurses was in direct violation of a hospital board requirement that all physician complaints be filed with the hospital first before being reported to a state agency.

 

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. 

15 Ways to Eliminate “Trust”In Health Care Organizations.

Trust" can be defined as confidence in the integrity, ability, character and truth of a person or thing. It is a dangerous commodity in a health care setting. Remember as the poet said,

As contagion of sickness makes sickness, contagion of trust makes trust.

Marianne Moore, In Distrust of Merits (1941) Trust is a frightful tool in the hands of the wrong party bent on influencing events.

A small dust of earth that walks so arrogantly, trust begets power and faith is an affectionate thing.

Id

. Trust can be contained and even eliminated in any labor intensive organization by following a few simple rules. Here they are:

1. Keep your focus on your self interest rather than diluting it upon your organization and its members. There can be only one number one.

2. Always claim every success whether it belongs to you or not. Everybody loves a winner.

3. Chase the short-term goals that generate immediate returns. After all, you may not be here tomorrow and that might be a good thing.

4. Promise them anything whether you can deliver or not. Memories are short and it’s impolite to say no.

5. Maintain a firm hand in command and control. Everybody needs to know who is in charge of their future and fate.

6. Accept no responsibility for failure. Nobody likes a loser. Make sure that it is adequately punished to stomp out unnecessary risk.

7. Carefully limit the authority of those around you so that they know that they must respond to the strings that you pull.

8. Divide and conquer by identifying and rewarding your favorite people. Loyalty must have its perquisites and to the victor belong the spoils.

9. Punish those that demonstrate free thinking and independence. They need to get on the same page as the rest of the team. That kind of conduct can be disruptive.

10. Keep hidden agendas hidden until you need them. Transparency gets in the way of political pragmatism.

11. Announce principles and values for others to follow but provide yourself dispensation because after all you are in charge or on your way up.

12. Ignore or minimize the contributions of the "others" so that they do not get a leg up on "us." Make sure you can identify "them" that are opprosed to "us" so that we can over time squeeze them out of the organization.

13. Keep people on their toes by keeping organizational goals fuzzy and constantly changing, making it more difficult to focus responsibility. You can’t be a target if you are not responsible and your contribution is not measurable.

14. Reaching consensus is a waste of time. Tell people where the organization is going and brook no dissent. Get on the bus or off the boat.

15. Reward mediocrity because it is non-threatening and comfortable. Tie others to failures and punish them quickly to minimize the damage.

Following these prescriptions you will find an effective antidote to the menace of trust in your health care organization. Good luck and God speed.

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.

CAN HOSPITAL DECLOAK ANONYMOUS CRITIC?

Last month a Texas Court of Appeals granted a limited mandamus to an anonymous blogger who was frequently critical of Paris (Texas) Regional Medical Center (PRMC"), a subsidiary of a hospital system known as Essent.  PMRC filed suit earlier in the year against the anonymous blogger who goes by the nom de guerre of Frank Pasquale and nine other anonymous contributors or commentators on his blog for libel. Since the PRMC didn't know the identity of Pasquale they sought an court order under the Cable Communications Policy Act of 1984 to force Suddenlink to disclose the IDP number and identity of Pasquale. To its credit, Suddenlink balked until the hospital agreed to permit Pasquale to be given notice and an opportunity to object. He appeared through and attorney and objected. When his objections were rejected by the trial court Pasquale filed a mandamus action to interdict the court's order.

Hospital Board Hijacks Non-Profit Hospital, Court Removes Board.

The line between governance and day to day management of a Non Profit Hospital Board can sometimes seem like a moving target and difficult to properly define. Tensions between management and the governing board can sometimes become combative if not downright hostile in undertaking their separate corporate duties in any given circumstances. The circumstances in a recent Tennessee Case may set a new mark for dysfunctional board-administration confrontation. The Tennessee Court of Appeals recently affirmed a trial court decision in Memphis Health Center, Inc., by Sadie Davis and Cornelia Berry, Directors, and Morristein J. Holman, Chief Executive Officer and Director  v. Gregory Grant, et al., in their capacity as the Board of Governors of Memphis Health Center, No W2004-02898-COA-R3-CV (July 28, 2006), to remove the defendant board of directors and return the management of the hospital to the CEO and two plaintiff board members.  This action followed a "derivative" action brought by the plaintiffs on behalf of the corporation against the rest of the Board.

American Bar Association Amends Model Rules of Professional Responsibility In Response to Sarbanes-Oxley Act of 2002.

The American Bar Association at its annual meeting last week in San Francisco voted to amend the Rules of Professional Responsibility governing the ethical behavior of attorneys to reflect the changing role of attorneys as a result of the Post Enron scandel and the reporting requirements of the Sarbanes-Oxley Act.

Simplified Board Meeting Procedure.

General Henry Martyn Robert was an engineer in the U.S.Army when he experienced the trauma of chaos in a church meeting that he was running. His frustration led him to the study of parliamentary procedure and the publication of The Pocket Manual of Rules of Order for Deliberative Assemblys on February 19, 1876. This became the first of 10 editions of Robert's Rules of Order which has formed the basis for managing meetings of "deliverative assemblys" ever since.