The Office of Inspector General identified “reducing waste in . . . hospice care” as one of the “top management challenges” for the 2015 fiscal year. The federal government’s efforts to respond to that challenge are illustrated by several recent developments in False Claims Act (“FCA“) cases brought against hospice care providers. For example, the Robinson-Hill, Betts, and Gooch cases discussed herein underscore the attention given to hospice care providers and their alleged billing and personnel-related practices, and the high monetary settlements that can result from such attention.
In Tierney v. Advocate Health & Hospitals Corp., the Seventh Circuit recently affirmed the dismissal of a Fair Credit Reporting Act (“FCRA“) complaint and found that a hospital was not a “credit reporting agency” under the FCRA. Continue reading Seventh Circuit Finds Hospital Not A “Credit Reporting Agency”
The Stark Law, 42 U.S.C. 1395nn, places restrictions on lease arrangements between physician groups and hospitals for equipment owned by the physicians, leased to the hospitals and then used by the same physicians to treat patients at the hospital. Under the Stark Law, such leases are prohibited unless the arrangement complies with the equipment rental exception, 42 U.S.C. 1395nn(e)(1)(B).
One requirement of the equipment rental exception, which is both statutory and regulatory (42 C.F.R. 411.357(b)), is that the rental charges be “set in advance.” In a recent case from the D.C. Circuit Court of Appeals, Council for Urological Interests v. Burwell, the court considered whether a “per-click” or “per-use” fee could be considered “set in advance” and otherwise meet the criteria for the exception. In an oddly constructed opinion, the court struck down a regulatory prohibition on per-click arrangements, but remanded under terms that would permit the restriction to be re-instated. Continue reading “Per-click” fees OK but don’t count on it
The Government and IPC The Hospitalist Company, Inc. (“IPC”) continue their False Claims Act (“FCA“) fight in court, now disputing the scope of discovery in light of the Northern District of Illinois’ partial denial of IPC’s motion to dismiss (detailed by Duane Morris here). The Government has moved to strike certain of IPC’s general objections to discovery: (1) IPC’s objection to producing documents from IPC’s nationwide operations and (2) IPC’s objection to producing documents dated after December 31, 2010 (“Motion“).
An orthopedic surgeon agreed on two separate occasions to an on-call coverage contract with a local hospital in which he warranted that no portion of his compensation was in exchange for referrals. When the contracts were terminated by the hospital after the surgeon invested in a competing surgery center, the surgeon brought a whistleblower False Claims Act action against the hospital, alleging that the contract was intended to induce his referrals.
The U.S. District Court for the Eastern District of Pennsylvania, in Cooper v. Pottstown Hospital Co., LLC, et al., dismissed the surgeon’s complaint. The district court’s description of the failure of the complaint illustrates the characteristics of on-call contracts that make them a permissible relationship between hospitals and physicians. Continue reading On-call coverage contracts are OK
A district court in the Northern District of Illinois recently partially granted a motion to dismiss the Government’s False Claims Act (“FCA”) complaint filed against IPC The Hospitalist Company, Inc. (“IPC”) and its subsidiaries and affiliates. The district court dismissed IPC’s subsidiaries and affiliates because the Government simply “lumped” those subsidiaries and affiliates in with IPC, and did not plead facts tying the subsidiaries and affiliates to the alleged fraud. The decision underscores an important defense available to FCA defendants, and highlights the nuanced pleading requirements that the Government must meet in an FCA case. Continue reading Certain FCA Defendants Dismissed; “Lumping” Defendants Together Is Not Enough To State An FCA Claim
A recent settlement between Mayo Collaborative Services d/b/a Mayo Medical Laboratories (“MML”) and Mayo Clinic (together with MML, “Mayo”) and a former Mayo executive, Dr. Franklin Cockerill, reveals the potential legal issues that may arise when health care executives seek new employment and the high stakes litigation that may ensue-regardless of which party may or may not be at fault.
As set forth in Mayo’s complaint, Dr. Cockerill was a former senior officer and director of MML and Chair of the Mayo Clinic Department of Laboratory Medicine and Pathology, where he managed several thousand medical professionals handling laboratory testing and intellectual property development for Mayo and MML. According to Mayo’s complaint, as a result of Dr. Cockerill’s various positions he had first-hand knowledge of confidential strategic, business, marketing, sales, pricing, and data management information from MML and Mayo. Eventually, Dr. Cockerill retired and obtained employment with a Mayo competitor.
On December 23, 2014, the Commonwealth Court of Pennsylvania logged another frustrating mile down the confused and confusing road of property tax exemption for purely public charities. In Fayette Resources, Inc. v. Fayette County Board of Assessment Appeals, the Court overturned a lower court finding that an operator of group homes for intellectually disabled adults satisfied the requirements for tax exemption as a “purely public charity.” The Commonwealth Court held that Fayette Resources failed to show that it satisfied the second requirement of the so-called HUP test (declared in Hospital Utilization Project v. Commonwealth, 487 A.2d 1306 (Pa. 1985)) — that it donate or render gratuitously a substantial portion of its services.
While this opinion may be viewed simply as Fayette Resources failing to make an adequate record below, the case also illustrates the confusion created by the Pennsylvania Supreme Court’s decision in the 2012 Mesivtah case, Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, 44 A.3d 3 (Pa. 2012), which held that non-profit entities must satisfy both the statutory requirements of the Purely Public Charity Act (“Charity Act”), codified at 10 P.S. 371-385, and the court-established HUP test. Continue reading Real Estate Tax Exemption Issue Muddied Again
When physicians are excluded from medical staff privileges because the hospital has entered into an exclusive agreement with other physicians, the element of “exclusion” often raises the suggestion that somehow the antitrust laws are implicated and competition has been adversely affected. The recent opinion of the United States Court of Appeals for the Third Circuit in Bocobo v. Radiology Consultants of South Jersey, P.A., et al. , No. 07-3142 (3d Cir. April 13, 2012)(not precedential), explains why the antitrust laws do not afford a remedy to an excluded physician when a hospital contracts with a provider group that does not include the plaintiff physician.