False Claims Act Enforcement Against the Health Care Industry: A View From the Trenches

Posted on: October 28, 2007  |   Author: Kristen
Filed Under: Distinguished Speaker Series, Other   |   Leave a Comment

False claims litigation in the health care industry has increased exponentially in recent years. Originally intended to curb fraud following the Civil War, in 2006, 80% of False Claims Act recoveries were from the health care industry. Greg Luce, partner at Jones Day in Washington D.C., knows all too well the impact this has had on health care providers across the country. On October 9, 2007, Luce spoke with SLU students and faculty, portraying false claims litigation as one of the greatest obstacles facing the health care industry today in his presentation False Claims Act Enforcement Against the Health Care Industry: A View From the Trenches.

The False Claims Act (FCA) provides a mechanism for both the government and individual plaintiffs to hold physicians, facilities, and payors liable for “knowingly” presenting a false claim for payment or approval to the United States government. The most frequent situations include those where either an individual or corporate defendant has overcharged the government for goods or services. In the health care industry, these actions almost always relate to the provision of medical services to an individual as a beneficiary of either the Medicare or Medicaid public health programs. Although virtually unlimited in scope, the FCA does include one important limitation; although a charge of an FCA violation may be brought by either the government or an individual plaintiff, it must be brought by an “original source” having “direct and independent knowledge of the information on which the allegations are based.” 31 U.S.C. s 3730(e)(4)(B). In the health care industry, this generally limits private standing to the beneficiary or patient alone.

Luce’s presentation raised many important and, as yet unanswered questions. Will FCA liability force health care providers to change their basic structure and processes in an attempt to increase accountability and transparency? Will FCA liability replace private medical malpractice liability? And primarily, is the FCA merely a tool being used to target the health care industry? As FCA litigation continues to increase, the answers to these questions are becoming vitally important.

When It Comes To Regulations, What is the Difference Between Specialty Hospitals and ASCs?

Posted on: October 27, 2007  |   Author: Natalie
Filed Under: Other   |   Comments Off

During his presentation, Jay Christiansen asked why specialty hospital services are considered designated health services for Stark purposes but ASC services are not in light of the fact that physicians have the same incentives to refer their patients to ASCs they own as they do to specialty hospitals they own. Given that Medicare costs per case have not been shown to be lower at specialty hospitals than at community hospitals, I guessed that the answer to his question is that ASCs, unlike specialty hospitals, have been shown to lower costs for Medicare patients so the government encourages development and use of ASCs by excepting them from regulations that would otherwise limit their existence. If specialty hospitals do not save the government money, then they will not receive the same preferential regulatory treatment. While specialty hospitals have been shown to increase efficiency (e.g., shorter patient stays), when it comes to Medicare, this efficiency does not result in cost savings. Still, I wonder whether Medicare reaps the benefits of increased efficiency that specialty hospitals provide. If these hospitals provide higher quality care, then I would argue that Medicare does benefit from having beneficiaries treated at them because it is getting more for its money and potentially avoiding the cost of follow-up services that might be needed if the initial care is inferior.

Also related to Mr. Christiansen’s question about the disparate regulation of ASCs and specialty hospitals are the concerns about patient steering and cherry-picking that specialty hospitals raise. Are these concerns not applicable to ASCs? Don’t physicians have the same incentives to steer their well-insured patients to ASCs as they do to specialty hospitals? After all, as Mr. Christiansen said, the referral incentives seem to be the same for both.