To avoid lawsuits under the False Claims Act, Stark Law and Anti-Kickback Statute, it is necessary for senior leaders at healthcare organizations to understand how the law affects their organizations and current trends in the law.
In a presentation at the McGuireWoods Healthcare Litigation Conference in Chicago on April 8, Scott Becker, an attorney with McGuireWoods, said the types of FCA cases are changing.
Traditionally, lawsuits were brought under the FCA because a hospital or healthcare organization billed the government for services that were not actually performed, or the services were performed but the hospital miscoded the service, resulting in over compensation from the government.
Today, the majority of cases brought under the FCA are for Stark and AKS violations. The shift is partially due to the unification of the circuits in allowing any Stark or AKS violation to give rise to a FCA case.
According to Mr. Becker, the government is also getting its information from new sources, as the number of self-disclosures is increasing.
In the past, the government relied almost exclusively on relators, or whistle-blowers, to bring lawsuits under the qui tam provision of the FCA for information about improper billing and other possible FCA violations. Today, the government increasingly relies on information from organizations disclosing possible Stark, AKS and FCA violations.
"Self-disclosures are unpredictable, and hospitals do not know what the outcome is going to be when they take their self-disclosures to the government," said Mr. Becker. The benefit of self-disclosing is a whistle-blower is no longer able to bring a successful case under the FCA because no one is going to be an original source of the material, which is required under the FCA.
Mr. Becker said many Stark, AKS and FCA cases are settling today because of a changing legal environment. "There are law firms in the false claims business," said Mr. Becker. With whistle-blowers represented by experienced counsel, many cases end up settling even when there has been no wrongdoing by a hospital.
If a hospital hasn't committed a Stark, AKS or FCA violation, many times it will still settle the case because the exposure is so high if it chooses not to. By not settling, hospitals not only risk paying a large sum of monetary damages, but they also risk doing more damage to their reputation.
Compliance Efforts
To prevent Stark, AKS and FCA violations, Mr. Becker said constant compliance planning is essential. "Hospitals need to conduct constant billing and coding audits as part of an ongoing compliance plan, and senior leadership needs to be involved," said Mr. Becker. When healthcare organizations miss a few years of audits, they risk being caught by surprise with a lawsuit.
From a compliance standpoint, there needs to be valuation support for each of the hospital's relationships with physicians. "Hospitals need to make sure they are employing physicians for a true need rather than just for patient referrals," said Mr. Becker.
Any size health system should do an update or review of their compliance system every year, and healthcare organizations should also engage in a more detailed compliance review where they examine individual physician contracts.
Mr. Becker also said responding to all FCA issues is essential. Senior leaders of healthcare organizations need to take action on all potential FCA violations brought to their attention by employees, no matter how big or small the potential violation. If an FCA issue is brought forward, senior leaders need to inform the employee they will look into it right away and then follow through and conduct an investigation.
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