Allegations of Underpaid Debt Lands Big Healthcare Players in Whistleblower Hell

When physicians think about allegations of kickbacks in the context of large insurers, it’s generally related to how a carrier’s internal “claims cops” have alleged that some physician or other provider engaged in a kickback scheme, obviating the payor’s need to pay claims, or, even worse, supporting their demand for repayment.

In what some physicians might view as karmic or even dark comedic payback, a federal False Claims Act case against Humana, the nation’s third largest health insurance company, as well as against Roche Diagnostics Corporation and its affiliate Roche Diabetics Care, Inc., is moving toward trial.

The whistleblower lawsuit was filed by Crystal Derrick, a former Roche employee, who also alleges that Roche fired her in retaliation for raising concerns about the lawfulness of the underlying scheme.

In encapsulated form, Ms. Derrick alleges that Roche gave a kickback to Humana in order to keep its diabetes testing products on (and to keep their competitors off) Humana’s formularies for Medicare Advantage and other federally funded plans. The alleged form of the kickback? Dismissing millions of dollars of debt that Humana owed to Roche.

Just as schadenfreude can be satisfying to the psyche, indirect benefit, even deeply buried, can satisfy the remuneration requirement under the federal Anti-Kickback statute, which prohibits all remuneration, in whatever form, directly or indirectly, to induce referrals of federally funded healthcare program patients.

What will happen to Humana and Roche is yet to be seen.

While you’re waiting for the result, see what risk may exist in your own dealings.

Is hidden remuneration (cash, discounts, write-offs, contract rights, and so on) lurking in the shadows?

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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Alchemist Can’t Turn Outpatients Into Inpatients for Less Than $18.3 Million

As a frequent reader of the blog, you know that I strongly believe that the future of hospitals isn’t hospitals, it’s outpatient facilities. (In fact, if you haven’t already, grab a free copy of my 2016 book, The Impending Death of Hospitals, here.)

I’m not sure whether the folks at Banner Health read my book and (1) didn’t believe it, or (2) decided to prove me wrong, but either way it just cost them $18.3 million.

That’s the story revealed by the settlement earlier this month of a whistleblower case brought against Banner by Cecilia Guardiola.

Ms. Guardiola, a registered nurse, worked for Banner as its corporate director of clinical documentation back in 2012. She lasted three months before resigning over what she found to be improper charges to Medicare: billing short-stay, outpatient services that should have been performed on an outpatient basis as if they were more expensive inpatient services. She complained to other executives but they wouldn’t fix the problem.

Eventually, Ms. Guardiola found a pretty good gig as a whistleblower.

Her False Claims Act complaint lists the admission and discharge date/times on 679 cases, each a “zero day” case, many of which she alleged were billed as inpatient even though the patient was admitted to and discharged from the hospital on the same calendar day.

Her case just settled this month, with Banner paying $18.3 million to the government (but not admitting liability). Ms. Guardiola will receive around $3.3 million.

You might say that Ms. Guardiola had a banner day, but that Banner didn’t.

The fact of the matter is that every case that can be performed on an outpatient basis will be performed on an outpatient basis.

And, as Banner discovered, there’s a high price to pay for standing in the way of progress.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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The Business of Healthcare

Uncompensated Medical Directorship Leads to $3.2 Million False Claims Act Settlement

You may have seen their websites: Anesthesia “practice management companies” that advertise “no stipends!” to obtain facility contracts.

Or, you may have seen the RPFs, usually drafted by “consultants” or “management companies”  (and others specializing in perhaps unknowingly committing federal crimes) who promise the surgeon-owners of ASCs that they’ll get anesthesia groups to provide a plethora of coverage and directorship services for free.

Oops. Nothing just became $3.2 million. Plus legal fees. Plus the continued risk of being criminally prosecuted.

Yes, the type of stupid compliance mistake underlying these idiots’ thinking just led to a $3.2 million civil settlement of a False Claims Act (i.e., whistleblower) suit brought against (among others) an orthopedic surgery practice, Georgia Bone & Joint (“GBJ”) and its related surgery center, Southern Bone & Joint a/k/a Summit Orthopaedic Surgery Center (“Summit Surgery Center”), as well as against CRNA David LaGuardia (“LaGuardia”) and anesthesia entities Southern Crescent Anesthesiology, PC (“SCA”) and Sentry Anesthesia Management, LLC (“Sentry”).

The suit was initially brought by Sharon Kopko, the former practice/facility administrator for both GBJ and Summit Surgery Center.  Upon investigation by the U.S. Department of Health & Human Services Office of Inspector General, the FBI, and the U.S. Postal Service Office of Inspector General, the federal government took up the prosecution of the case.

From the settlement announcement of the U.S. Attorney for the Northern District of Georgia, the allegations against the defendants apparently grew from those originally contained in Ms. Kopko’s complaint to include  that LaGuardia, Sentry, and SCA provided a free medical director to Summit Surgery Center  in order to induce it to choose to perform more procedures at the surgery center rather than in the GBJ office.

In the words of the U.S. Attorney, “Kickbacks should never play a role in medical decision-making. It is critical to our health care system that patients seeking health care know that their providers’ recommendations are based on what is in the patient’s best interests and not influenced by illegal kickbacks or arrangements.”

Stay tuned. It’s yet to be seen who’ll now be criminally prosecuted.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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New Trigger of False Claims Act Liability

I know an attorney whose firm was subject to a disqualification motion by opposing counsel on the basis that one of their offices was in a suite that didn’t have a Certificate of Occupancy from the local building department. The motion was denied on the grounds, I believe, of being patently ridiculous.

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