In an Oct. 24 session at the 20th Annual Ambulatory Surgery Centers Conference in Chicago, Jeffrey C. Clark and David Pivnick, both attorneys at Chicago law firm McGuideWoods, discussed recent trends surrounding litigation involving ASCs.
The federal government recovered $4.9 billion under the False Claims Act in 2012, according to Mr. Pivnick, 60 percent of which came from the healthcare industry. Of the funds recovered from the healthcare industry, two-thirds came from pharmaceutical and device manufacturers, and one-third came from providers.
Additionally, the government has increased its budget for healthcare fraud enforcement by 20 percent to about $300 million annually, according to Mr. Pivnick. The increased investment is due to the politically unobjectionable nature of fraud enforcement and also due to the high returns the government has been seeing — estimates vary, but most analysts say the government is making between $17 and $25 for every $1 spent on fraud enforcement, he said.
“The numbers are substantial and the threat is real,” said Mr. Pivnick, especially for cases brought forth by whistle-blowers. In 2012, 647 FCA claims were filed by whistle-blowers alone. “And a whistle-blower can be anyone,” he said, from a former employee to a local competitor. “Some want money, some want revenge… and some might have genuine, practical concern about something at the ASC.”
To ASCs, Mr. Pivnick advises fully investigating any discovered or reported issues involving fraudulent billing. If there is an issue, the ASC should devise and begin to implement a corrective plan, both to avoid a suit or mitigate a suit’s negative outcomes. “Sometimes during a FCA suit the government will approach the defendant and if they have a compliance plan or an ongoing internal investigation it’s easier to get a settlement,” he said.
Another area that has seen increased litigation recently is physician buyouts. “Even if you vote someone out and buy them out under redemption, lawyers will say even though you said you did it without cause, there’s an underlying improper motive, like they’re not producing,” said Mr. Clark. “Even though you followed the contract they’ll say you violated the policy.”
To avoid a suit of this nature, Mr. Clark recommends ensuring staff reductions do not target low producers. He also recommends educating physicians and other members of the ASC’s leadership to be careful making any offhand comments about firing someone for low volumes or any other illegal reason. “There will always be offhand comments at meetings, and even though those didn’t drive the decision [to buy out a physician] that testimony is devastating in these kinds of cases,” he said.
ACOs: Recognizing the Opportunity for Your ASC
Is ASC Litigation on the Rise?
5 Surgery Center Joint Venture Models
The federal government recovered $4.9 billion under the False Claims Act in 2012, according to Mr. Pivnick, 60 percent of which came from the healthcare industry. Of the funds recovered from the healthcare industry, two-thirds came from pharmaceutical and device manufacturers, and one-third came from providers.
Additionally, the government has increased its budget for healthcare fraud enforcement by 20 percent to about $300 million annually, according to Mr. Pivnick. The increased investment is due to the politically unobjectionable nature of fraud enforcement and also due to the high returns the government has been seeing — estimates vary, but most analysts say the government is making between $17 and $25 for every $1 spent on fraud enforcement, he said.
“The numbers are substantial and the threat is real,” said Mr. Pivnick, especially for cases brought forth by whistle-blowers. In 2012, 647 FCA claims were filed by whistle-blowers alone. “And a whistle-blower can be anyone,” he said, from a former employee to a local competitor. “Some want money, some want revenge… and some might have genuine, practical concern about something at the ASC.”
To ASCs, Mr. Pivnick advises fully investigating any discovered or reported issues involving fraudulent billing. If there is an issue, the ASC should devise and begin to implement a corrective plan, both to avoid a suit or mitigate a suit’s negative outcomes. “Sometimes during a FCA suit the government will approach the defendant and if they have a compliance plan or an ongoing internal investigation it’s easier to get a settlement,” he said.
Another area that has seen increased litigation recently is physician buyouts. “Even if you vote someone out and buy them out under redemption, lawyers will say even though you said you did it without cause, there’s an underlying improper motive, like they’re not producing,” said Mr. Clark. “Even though you followed the contract they’ll say you violated the policy.”
To avoid a suit of this nature, Mr. Clark recommends ensuring staff reductions do not target low producers. He also recommends educating physicians and other members of the ASC’s leadership to be careful making any offhand comments about firing someone for low volumes or any other illegal reason. “There will always be offhand comments at meetings, and even though those didn’t drive the decision [to buy out a physician] that testimony is devastating in these kinds of cases,” he said.
More Articles on Legal Issues:
ACOs: Recognizing the Opportunity for Your ASC
Is ASC Litigation on the Rise?
5 Surgery Center Joint Venture Models