At the Becker's Hospital Review Annual Meeting on May 18, three members of McGuireWoods in Chicago discussed recent trends in hospital litigation. Attorneys included in the panel were Jeffrey C. Clark, JD, Angelo M. Russo, JD, and David J. Pivnick, JD. The session was moderated by Scott Becker, JD, CPA, partner with McGuireWoods.
Mr. Becker pointed out the rise in lawsuits against hospitals. "In terms of government resource sin healthcare, investigation and prosecution have increased dramatically in the past several years," said Mr. Becker. Here are some other key questions and responses from the panel.
Question: What are common issues in litigation with non-compete agreements?
Jeffrey Clark: A typical situation is one in which one hospital system has hired away another hospital's physician, and the hospital pursues a claim of torturous interference against the hospital that hired away the physician. It's a difficult position for the hospital that hired away a physician, because it may have to try and challenge the validity of the non-compete, but it wants to do so without harming the validity of non-competes for itself. It's litigation in which you want to distinguish your non-compete and your situation from the non-compete you're hiring from.
Q: What are the logistics of claims between payors and hospitals?
JC: Payor provider dipsutes, a fair amount come up in the contracutal context. its' a broad array. in negotiation between payors and health systems, there is a lot of haggling and at some point in time the parties try to come together to reach some agreement. the more gray areas you have, is typically where down the line the hospital or payor will try and use that to boost its bottom line. the more complete the contracts ar at the onset, the better you are at the end.
Q: How badly does a hospital need to be excluded to think about if there are antitrust claims?
Angelo Russo: It's a very fact-specific situation. It's dependent on what experts define as a relevant market. If an expert defines that market as a tri-county area, and that hospital has a 65-percent share of that market, then it starts to raise questions.
Q: If you're trying to grow market share, at what point do you have to worry that your conduct can move from being competitive into being something you have to worry about in terms of anti-trust claims?
AR: What you can do is check to see what your discount relates to a hospital that might only provide secondary or primary. It's a tight line for the dominant hospital between what they consider to be aggressive competition and what their competitor might say is crossing the line.
Q: At what point does one hospital looking at acquiring another have to worry about potential monopolization claims?
AR: Right now, I'd say any hospital looking to merge or acquire another hospital should discuss this with their counsel. It's clear the FTC and DOJ have taken a fairly consistent approach to hospital mergers right now. They're looking at areas that are affecting consumer costs the most. The new acting attorney general, who was worn in at the end of March, said the division will concentrate on vigorous scrutiny over hospital mergers.
Q: How often are you seeing a hospital with a possible privacy breach?
JC: We also see HIPAA context, where the government has applied a lot more funds to step up its enforcement of HIPAA. What the government likes to see, especially when they're considering whether provider should pay a fine, is whether the provider took protective measures. That can range from something as innocent as leaving patient health information out overnight. A cleaning company threw the PHI in the trash, not through the shredder. When we counsel a client in that context, we tell them to do an analysis on the outset. Did it really constitute a capital "B" breach under HIPAA? Is it something that needs to be reported? On the other end, we've seen clients accessing certain information perhaps from acquired physicians and using it in a context where it wasn't really authorized. It's important at the onset to take a good hard look at what happened and do an analysis of what you need to do to fix it. Show the government that you took it seriously, handled it appropriately and ensure it isn't going to happen again.
Q: What trends are you seeing in false claims litigation?
David Pivnick: Some of the most recent trends we've seen in the false claims context is the implied certification. Situations where there is an allegation of stark or antikickback. The vast majority of claims are dropped by relators. It's actually doubled in the past 5 years -- the number of qui tam cases dropped by relators. The government is now getting involved in 40 to 50 additional cases annually. The people bringing claims are largely relators, and we're seeing a new breed of relators. One person won a settlement of millions from a qui tam suit, and now he has an entire company dedicated to researching hospital companies and filing suit against them.
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Mr. Becker pointed out the rise in lawsuits against hospitals. "In terms of government resource sin healthcare, investigation and prosecution have increased dramatically in the past several years," said Mr. Becker. Here are some other key questions and responses from the panel.
Question: What are common issues in litigation with non-compete agreements?
Jeffrey Clark: A typical situation is one in which one hospital system has hired away another hospital's physician, and the hospital pursues a claim of torturous interference against the hospital that hired away the physician. It's a difficult position for the hospital that hired away a physician, because it may have to try and challenge the validity of the non-compete, but it wants to do so without harming the validity of non-competes for itself. It's litigation in which you want to distinguish your non-compete and your situation from the non-compete you're hiring from.
Q: What are the logistics of claims between payors and hospitals?
JC: Payor provider dipsutes, a fair amount come up in the contracutal context. its' a broad array. in negotiation between payors and health systems, there is a lot of haggling and at some point in time the parties try to come together to reach some agreement. the more gray areas you have, is typically where down the line the hospital or payor will try and use that to boost its bottom line. the more complete the contracts ar at the onset, the better you are at the end.
Q: How badly does a hospital need to be excluded to think about if there are antitrust claims?
Angelo Russo: It's a very fact-specific situation. It's dependent on what experts define as a relevant market. If an expert defines that market as a tri-county area, and that hospital has a 65-percent share of that market, then it starts to raise questions.
Q: If you're trying to grow market share, at what point do you have to worry that your conduct can move from being competitive into being something you have to worry about in terms of anti-trust claims?
AR: What you can do is check to see what your discount relates to a hospital that might only provide secondary or primary. It's a tight line for the dominant hospital between what they consider to be aggressive competition and what their competitor might say is crossing the line.
Q: At what point does one hospital looking at acquiring another have to worry about potential monopolization claims?
AR: Right now, I'd say any hospital looking to merge or acquire another hospital should discuss this with their counsel. It's clear the FTC and DOJ have taken a fairly consistent approach to hospital mergers right now. They're looking at areas that are affecting consumer costs the most. The new acting attorney general, who was worn in at the end of March, said the division will concentrate on vigorous scrutiny over hospital mergers.
Q: How often are you seeing a hospital with a possible privacy breach?
JC: We also see HIPAA context, where the government has applied a lot more funds to step up its enforcement of HIPAA. What the government likes to see, especially when they're considering whether provider should pay a fine, is whether the provider took protective measures. That can range from something as innocent as leaving patient health information out overnight. A cleaning company threw the PHI in the trash, not through the shredder. When we counsel a client in that context, we tell them to do an analysis on the outset. Did it really constitute a capital "B" breach under HIPAA? Is it something that needs to be reported? On the other end, we've seen clients accessing certain information perhaps from acquired physicians and using it in a context where it wasn't really authorized. It's important at the onset to take a good hard look at what happened and do an analysis of what you need to do to fix it. Show the government that you took it seriously, handled it appropriately and ensure it isn't going to happen again.
Q: What trends are you seeing in false claims litigation?
David Pivnick: Some of the most recent trends we've seen in the false claims context is the implied certification. Situations where there is an allegation of stark or antikickback. The vast majority of claims are dropped by relators. It's actually doubled in the past 5 years -- the number of qui tam cases dropped by relators. The government is now getting involved in 40 to 50 additional cases annually. The people bringing claims are largely relators, and we're seeing a new breed of relators. One person won a settlement of millions from a qui tam suit, and now he has an entire company dedicated to researching hospital companies and filing suit against them.
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