Lying to the FBI
Dr. Vidil Sheen has pled guilty to obstructing an FBI investigation related to Medicare program billings. Apparently Dr. Sheen traveled from time to time but while he was traveling he created office notes with false entries reflecting that he had seen patients in his office using his electronic signature. This would be bad enough.
However, when Dr. Sheen was subpoenaed, he apparently produced false records to the FBI about office visits in similar matters. He is facing 20 years in prison and up to $50,000 in fines related to the false record production.
Our current Stark Law was enacted in 1989. At that time, there was great concern that healthcare decision making was being unduly influenced by the self interests of physicians. The concern was that when physicians have financial incentives to refer patients for healthcare services, those incentives may increase utilization, decrease patient choice and stifle competition. The Stark Law was intended to “disconnect a physician’s healthcare decision making from his or her financial interests in other healthcare providers and suppliers.”
Nearly 20 years later, is the Stark Law working? It certainly seems to have raised consciousness of physician financial arrangements connected to patient healthcare. On the other hand, the Stark Law and its accompanying rules and regulations have become so pervasive that even routine physician employment contracts often raise important Stark Law issues. When straightforward physician group contracts with hospital systems and renewals of physician employment contracts with health systems have expensive detours into reasonable compensation and fair market value issues, it may be time to rethink Stark.
Could the objectives of the Stark Law, to limit physician financial incentives and to limit over utilization of healthcare, be accomplished in a simpler and more efficient manner?
CMS is asking as it has issued a mid-summer request for information regarding Stark and asked for suggestions for improvement or replacement of the Stark Law.
Cerner Friend or Foe?
Cerner is an ultra large EHR vendor. Cerner has announced its entry into the Medicare Advantage market. This raises a key question regarding Cerner, is your vendor suddenly your competitor?
When you give Cerner access to your billing information, your productivity information and your insurance/payor payment rate information, will Cerner take this information and begin competing with you?
Dr. Paulus was a cardiologist that performed an extraordinary number of coronary angiograms and angioplasties at King’s Daughters Hospital. In fact, Dr. Paulus billed Medicare over $1 Billion Dollars from 2013 through 2016 for providing those procedures in Ashland, Kentucky.
HHS received a complaint regarding Dr. Paulus and unnecessary stent procedures. After an “independent” fraud contractor investigated, Dr. Paulus was charged with violations of the False Claims Act and Stark Law. Additionally, complaints were made to the Kentucky Board of Medical Licensure where Dr. Paulus agreed to retire after the investigation was opened.
After the investigations began, King’s Daughters paid over $40 Million to settle alleged False Claims Act and Stark Law violations against the hospital.
Dr. Paulus chose to go to trial. After a six plus week trial, there was much disagreement between the experts and Dr. Paulus with regard to medical necessity and medical appropriateness. The jury convicted Dr. Paulus of fraud and multiple false statements. Four months later the District Court agreed to acquit Dr. Paulus because the District Court believed CMS failed to prove the degree of stenosis is an objectably verifiable fact subject to proof or disproof.
The Sixth Circuit Federal Court of Appeals reversed the Order of Acquittal and reinstated Dr. Paulus’ guilty verdicts.
The District Court and the Appeals’ Court both wrestled with the difficulty in determining when an opinion becomes a lie. Dr. Paulus argued the degree of stenosis was a subjective opinion incapable of confirmation or contradiction. The Court however found that Dr. Paulus’ statements were not just opinion, but were so wrong, so often and so far away from the opinions of multiple experts that the opinions were not ever given honestly and, importantly, opinions may trigger liability for fraud when the opinion is not honestly held or when the speaker knows of facts that are fundamentally incompatible with his opinion.
In other words, the Court found there were objective facts and enough of those objective facts that were profoundly false and so often false that any opinion based on those objectively determinable false facts could not be honestly held.
This continues to be an area of interest to physicians who must often make life and death decisions based upon incomplete facts, or in some cases, conflicting facts. There will be ongoing questions about how to square the need for doctors to make these decisions and hindsight reviews that may or may not lead to criminal convictions.
This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years. Mr. Wallace assists physicians, practices and hospitals in contract items, federal legal compliance, practice entity creation, estate and wealth planning and similar issues. Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or firstname.lastname@example.org.