From com­pli­ance of­fi­cer to snitch

When com­pli­ance of­fi­cers blow the whis­tle

Modern Healthcare - - FRONT PAGE - Joe Carl­son

Govern­ment of­fi­cials and in­dus­try best prac­tices have long been push­ing hos­pi­tals and health sys­tems to es­tab­lish in­ter­nal com­pli­ance de­part­ments as a way to de­fray le­gal risks and po­lice them­selves.

But re­cent fed­eral law­suits raise the ques­tion of whether peo­ple hired to look for prob­lems may ac­tu­ally in­tro­duce their own risks—namely, that au­di­tors or com­pli­ance of­fi­cials could bring law­suits al­leg­ing im­pro­pri­eties that they un­cov­ered as part of their job.

Den­ver Health Med­i­cal Cen­ter agreed to pay $6.3 mil­lion this month to set­tle a False Claims Act law­suit filed by its former au­di­tor, Joanne Cur­ren. And Health Man­age­ment As­so­ci­ates in Naples, Fla., is bat­tling al­le­ga­tions in a wrong­ful-fir­ing law­suit from former com­pli­ance di­rec­tor Paul Meyer air­ing fraud al­le­ga­tions that the sys­tem says were pro­tected by nondis­clo­sure con­tracts and at­tor­ney-client priv­i­lege.

Last July, the 8th U.S. Cir­cuit Court of Ap­peals up­held a de­ci­sion to dis­miss a law­suit filed by Julie Ma­hony, a vice pres­i­dent of nurs­ing whose re­spon­si­bil­i­ties in­cluded com­pli­ance at her em­ployer, home-health agency Uni­ver­sal Pe­di­atric Ser­vices, West Des Moines, Iowa. Ma­hony claimed she was fired for pre-emp­tively blow­ing the whis­tle on a Med­i­caid billing scheme that would have been il­le­gal un­der the False Claims Act.

“It’s very chal­leng­ing be­cause we are see­ing an in­creas­ing num­ber of com­pli­ance of­fi­cers be­com­ing whis­tle-blow­ers, and they cer­tainly have ac­cess to the in­for­ma­tion to do it,” said Arent Fox part­ner Linda Bau­mann, the im­me­di­ate past chair­woman of the Amer­i­can Bar As­so­ci­a­tion’s Health Law Sec­tion.

De­spite the tim­ing of the cases, com­pli­ance of­fi­cials say in­stances of in­ter­nal re­view­ers try­ing to blow the whis­tle on their own em­ploy­ers are rare, con­sid­er­ing that the health­care in­dus­try em­ploys more than 7,500 of them.

“For ev­ery com­pli­ance of­fi­cer who de­cides to do what that former com­pli­ance of­fi­cer in Florida did, there are 1,000 who are find­ing and fix­ing prob­lems on a reg­u­lar ba­sis,” said Roy Snell, CEO of the Min­neapo­lis-based Health Care Com­pli­ance As­so­ci­a­tion. “It would be ironic for so­ci­ety to be­come frus- trated with com­pli­ance of­fi­cers when their track record is over­whelm­ingly pos­i­tive.”

Snell said the com­pli­ance as­so­ci­a­tion teaches mem­bers to fo­cus on re­solv­ing prob­lems within the ad­min­is­tra­tive hi­er­ar­chy, even if that means tak­ing ex­tra time and bring­ing in out­side in­for­ma­tion to

“We are see­ing an in­creas­ing num­ber of com­pli­ance of­fi­cers be­com­ing whis­tle-blow­ers, and they cer­tainly have ac­cess to the in­for­ma­tion to do it.” —Linda Bau­mann, Arent Fox

con­vince a CEO that a prob­lem ex­ists. “What we teach is to not give up. We try and teach a lot of tech­niques to re­solve the dif­fer­ence of opinion in whether or not some­thing is a prob­lem.”

For ob­servers look­ing for prece­dents, the Den­ver Health and HMA cases present sev­eral sim­i­lar­i­ties and some im­por­tant dif­fer­ences.

The law­suits in­volve sim­i­lar al­le­ga­tions of im­proper con­duct on the part of the sys­tems. Cur­ren and Meyer al­leged their former em­ploy­ers ma­nip­u­lated how pa­tients were clas­si­fied as hos­pi­tal in­pa­tients as a way to boost re­im­burse­ments, since out­pa­tients and peo­ple in ob­ser­va­tion sta­tus bring in lower rates from Medi­care.

Den­ver Health of­fi­cials de­clined to com­ment for this story. Their set­tle­ment agree­ment stip­u­lates that it is not an ad­mis­sion of wrong­do­ing. A state­ment from the sys­tem noted that Den­ver Health had iden­ti­fied the is­sue as part of its in­ter­nal au­dits and was al­ready tak­ing re­me­dial ac­tion when the govern­ment ex­pressed in­ter­est.

HMA of­fi­cials, mean­while, ac­knowl­edged in their le­gal an­swer to the law­suit that Meyer did bring such al­le­ga­tions to them, but de­nied any wrong­do­ing and said the former com­pli­ance of­fi­cial had mis­char­ac­ter­ized the con­tents of an Aug. 19, 2010 memo in which he out­lined his con­cerns.

An­other com­mon­al­ity in the Den­ver and HMA law­suits is that both of the hos­pi­tal crit­ics were former govern­ment of­fi­cials.

Cur­ren’s com­plaint says she worked as a fi­nan­cial ex­am­iner in the Colorado Divi- sion of In­sur­ance from 1996 un­til 2005, when she joined Den­ver Health. In Florida, Meyer worked for the FBI for nearly 30 years, re­tir­ing in 2006 as the su­per­vi­sor of the bureau’s health­care fraud unit in Mi­ami in 2006. That year, Meyer started work­ing in HMA’S com­pli­ance depart­ment, be­com­ing its di­rec­tor in 2010.

The two cases also have a ma­jor dis­tinc­tion. The Den­ver case was a qui tam ac­tion filed un­der the fed­eral False Claims Act, and the whis­tle-blower, Cur­ren, shared in the $6.3 mil­lion set­tle­ment that re­solves the sys­tem’s li­a­bil­ity for the al­legedly fraud­u­lent con­duct. The HMA case, how­ever, is filed un­der Florida’s Pri­vate Sec­tor whis­tle-blower Act, and is seek­ing only ac­tual and pu­ni­tive dam­ages for what he calls his wrong­ful ter­mi­na­tion. That means it is not a case in which the govern­ment could in­ter­vene as a plain­tiff, and Mey­ers’ dam­ages would be cal­cu­lated based on harm to him, not losses to the govern­ment, Mey­ers’ at­tor­ney, Eric Isi­coff, con­firmed.

Meyer said he was fired Sept. 6, 2011, af­ter threat­en­ing to in­form govern­ment of­fi­cials about rev­e­la­tions he un­cov­ered dur­ing au­dits of three Florida hos­pi­tals, telling man­age­ment in an e-mail, “It is my in­tent that the right thing is done in this in­ves­ti­ga­tion.”

At­tor­neys for HMA tell a dif­fer­ent story, al­leg­ing in a counter-law­suit against Meyer that he was ac­tu­ally fired for fail­ing to re­turn orig­i­nal records that the sys­tem needed to com­ply with two sub­poe­nas from HHS’ of­fice of in­spec­tor gen­eral.

Su­san Toepfer, out­side coun­sel on the case for the com­pany, said Meyer was not fired for bring­ing al­le­ga­tions to light, but rather for in­sub­or­di­na­tion re­lated to not re­turn­ing the records. In the coun­ter­suit against Meyer, the health sys­tem claimed its former com­pli­ance of­fi­cial also vi­o­lated a nondis­clo­sure agree­ment that he signed when he joined the com­pli­ance depart­ment.

Meyer re­sponded in court records that his con­sti­tu­tional right to in­form the govern­ment of vi­o­la­tions of fed­eral law su­per­sedes tort and con­tract rights.

Toepfer, a share­holder in Stearns Weaver Miller Weissler Al­had­eff & Sit­ter­son, said that de­fense won’t fly in court. “Paul Meyer was in a po­si­tion where he had ex­ten­sive ac­cess to confidential and priv­i­leged in­for­ma­tion, and the con­tract that we are su­ing him un­der re­quired him to use that in­for­ma­tion for the ben­e­fit of his job.”

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