During a recent teleconference hosted by McGuireWoods, Scott Becker, JD, partner at McGuireWoods and publisher of Becker's Healthcare, asked the speakers to discuss trends in healthcare litigation they're seeing. From the theories False Claims Act cases are being brought under to evaluating how to move forward once a hospital or health system discovers potential fraud at their organization, here are four major healthcare litigation trends and compliance tips that were presented.
1. Implied certification theory being used more frequently. Brett Barnett, JD, an associate at McGuireWoods, said he's seeing a lot of cases brought under the implied certification theory. "Almost every federal appellate court has adopted the implied certification theory," said Mr. Barnett. Under this theory, a court will hold a party liable under the False Claims Act when the underlying violation of law is sufficiently important to cause a court to view the claim as tainted — even though that party never directly certified its compliance to the government when submitting the claim. This allows whistle-blowers to base their qui tam actions on statutes and regulations outside of the False Claims Act.
2. Payer-provider disputes. Jeff Clark, JD, a partner at McGuireWoods, said he's seeing more disputes between managed care companies and healthcare providers. "A lot of these are basic payment disputes, and a lot of providers are trying to use ERISA to go after payers," said Mr. Clark.
3. Antitrust litigation. "The more consolidation there is, the more the smaller providers in the smaller markets are being squeezed," said Mr. Clark. There has already been an uptick in antitrust litigation in the healthcare industry, and Mr. Clark expects more of an increase in the future as consolidation continues.
Along with discussing some of the major trends in healthcare litigation, the lawyers also offered compliance suggestions for healthcare providers.
When a healthcare organization discovers a possible statutory violation, the hospital or health system needs to determine how deep the problems go, according to Mr. Clark. He said "the classic red flag" of an isolated incident is "a rogue employee that does something that is clearly outside of the company practice." However, a more difficult case is presented if there is something vague in a healthcare organization's practice and multiple people within the organization are engaging in practices that "aren't quite right," he said.
Mr. Clark specifically discussed the case involving Sumter, S.C.-based Tuomey Healthcare System. In its case against Tuomey, the government argued that the system entered into 19 contracts with 19 specialists that required physicians to refer their outpatient procedures to Tuomey, and, in exchange, paid them compensation that far exceeded fair market value. In this case, "the whole system all the way up to the board knew" about the issues, said Mr. Clark. "It's about how far the bad act spread and how well they were known."