In a recent article in Health Value Digest, Tiffany Hetland explored two items a hospital should have on its checklist when acquiring a physician practice: a billing and coding audit and a review of documentation practices. The article is below.
Hospital acquisitions of physician practices have been on the rise for some time. At…
On April 1, 2014, the Department of Labor’s Office of Federal Contract Compliance Programs agreed to the dismissal of its December 2008 complaint against Florida Hospital of Orlando. This action follows DOL’s March 11, 2014 agreement to a five-year moratorium on compliance and enforcement actions against Tricare service providers. These developments reflect a significant rollback of OFCCP’s prior position as to the scope of its jurisdiction. In his March 11, 2014 letter to Congress, Secretary of Labor Thomas Perez recognizes that Congress had intended to limit OFCCP’s jurisdictional authority over Tricare healthcare providers.
Read the press about Judge James Gwin’s decision in United States ex rel. Barko v. Halliburton Co., No. 1:05-cv-1276 (D.D.C. Mar. 6, 2014), and you might see it as the beginning of the end for the attorney-client privilege in internal investigations. While the ultimate implications of the decision remain to be seen, that’s not how we see it.
The attorney-client privilege and the work product doctrine are alive and well, as is their application to internal investigations. The FAR clause implementing the requirement for a Code of Business Ethics and Conduct preserves the contractor’s right to conduct an internal investigation subject to the protections of the attorney-client privilege and the work product doctrine. See FAR 52.203-13 (Dec. 2008). The Justice Department’s Principles of Federal Prosecution of Business Organizations explicitly states that a company is not required to waive privilege in order to get credit for cooperating with a government investigation. “[W]aiving the attorney-client and work product protections has never been a prerequisite under the Department’s prosecution guidelines for a corporation to be viewed as cooperative.”
On March 6, 2014, the District Court for the District of Columbia issued an opinion in United States ex rel. Barko v. Halliburton Company et al. requiring Kellogg, Brown & Root Engineering Corporation (“KBR”) to produce documents originally withheld on the basis of attorney-client privilege and the work product doctrine. The Court found that the documents, which related to internal investigations of possible violations of KBR’s code of conduct, were ordinary business records created to satisfy regulatory requirements and were not created for purposes of obtaining or receiving legal advice. The Court’s decision was based on the fact that KBR’s internal investigation was required under the Federal Acquisition Regulation and internal KBR policy, and that the investigation was conducted by non-lawyers. The Court’s holding raises significant questions about existing corporate compliance and investigation programs in regulated industries, including healthcare.
In Barko, the plaintiff brought a qui tam complaint alleging that KBR employees subcontracted to certain third parties who inflated invoices for substandard work, resulting in overcharges to the government. Barko sought, in the course of discovery, documentation from the internal review performed by KBR’s Office of Business Conduct into these allegations. After an in camera review of the documents at issue, the Court determined that the documents were not protected.
On March 10, 2014, the parties to U.S. ex rel. Baklid-Kunz v. Halifax Hospital Medical Center et al. entered into a Settlement Agreement to the resolve the claims in the United States’ Complaint in Intervention in this matter. Under the terms of the Settlement Agreement, Halifax must pay the settlement amount of $85 million by…
This morning, March 3, at what was to be the commencement of the jury trial in U.S. ex rel. Baklid-Kunz v. Halifax Hospital Medical Center (Case No: 6:09-cv-1002-Orl-31TBS), the parties informed the Court that they had reached a tentative settlement. The parties were given until March 10, 2014 for file a Joint Motion to …
A recent OIG Advisory Opinion (Adv. Op. 13-15) is, to a certain degree, more interesting for one of its footnotes than the body of the opinion itself. The footnote addresses a hotly debated issue, originally raised in an OIG Management Advisory Report (MAR) in 1991. That MAR took the position that an agreement between a hospital and a hospital-based physician group was a “suspect arrangement” under the Anti-Kickback Statute because the physician group was essentially required to split its revenue with the hospital–including requiring the group to provide uncompensated services to the hospital.
The OIG modified this position somewhat in the Supplement Compliance Program Guidance for Hospitals in 2005. In that compliance guidance, the OIG stated that an exclusive arrangement that required a hospital-based physician group to provide “reasonable administrative or limited clinical duties directly related to the hospital-based profession services at no or a reduced charge” would be permissible. The Compliance Guidance cautioned, however, that uncompensated or below-market-rate services would still be subject to “close scrutiny.”
On November 13 and November 18, the federal district court handed down separate rulings on summary judgment motions in a Florida Stark Law case that many consider the new Tuomey–U.S. ex rel. Baklid-Kunz v. Halifax Medical Center. In the first decision, the Court granted the U.S. partial summary judgment on the Stark violation with respect to compensation paid to certain medical oncologists employed by the hospital. In the second decision, the Court denied the hospital’s motion for summary judgment with respect to certain neurosurgeons employed by the hospital. Both decisions tee up important hospital/physician employment issues for trial.
The case stems from a qui tam False Claims Act lawsuit filed in 2009 in which Elin Baklid-Kunz, the former compliance officer, made allegations regarding Halifax Hospital Medical Center (“Halifax Hospital”) and Halifax Staffing, Inc. (“Halifax Staffing”) (collectively, “Halifax”). The compliance officer alleged that Halifax:
The Department of Justice chose to intervene in the lawsuit in 2011 with respect to the Stark Law issues. Halifax filed a Motion for Summary Judgment and the U.S. filed a Motion for Partial Summary Judgment with respect to the Stark Law issues.
Two different compensation arrangements were the subject of these decisions. In the first decision, the Court considered the Government’s motion for partial summary judgment with respect to compensation paid to the medical oncologist employed by Halifax and the resulting designated health service referrals from those physicians. The alleged Stark violations were the result of employment agreements entered into with six medical oncologists in 2005 that provided for an incentive bonus pool equal to 15% of the “operating margin for the Medial Oncology program” of the Hospital. Even though the physicians were permitted to divide that pool among themselves as they determined, which they did based on individual production, the Hospital admitted that the pool included revenue from services that were not personally performed by the medical oncologists, such as fees related to the administration of chemotherapy.
New research shows that hospitals with higher nursing levels have fewer readmissions and lower penalties for excessive readmission rates. A new study, which appeared in the October issue of Health Affairs, found that hospitals with higher staffing levels had a 25 percent lower chance of being penalized for readmission rates when compared to hospitals with lower staffing levels.…
When was the last time you thought about your compliance program? As we know, an effective compliance program is important for healthcare companies. It’s also important to review your compliance program periodically and update it according to the latest guidance. OIG guidance and recent Corporate Integrity Agreements (CIAs) are informative about what the OIG is…
