CORPORATE JAIL TIME

Our Department of Justice has released its guidance to various Assistant Attorney Generals involved in tax health care, anti-trust, and other matters indicating when individuals should be prosecuted for corporate wrongdoing.  Historically, wrongdoing done at the corporate level has resulted in fines, but seldom any jail time except in the most egregious circumstances.

This appears ready to change, as DOJ indicates a set of rules/standards/approaches for deciding when to pursue individuals working on or employed by corporations or LLCs.  The six (6) focus factors announced include:

• Does the corporation provide all relevant facts relating to the individuals responsible for the corporation’s misconduct?

• Corporate investigations should focus on individuals from the inception of the investigation.

• DOJ expects criminal and civil attorneys handling corporate investigations to collaborate.

• In most cases, DOJ will not release or ignore culpable individuals from civil or criminal liability.

• Corporations will no longer be able to settle their matter without an outline or plan or understanding with regard to handling the culpable individuals in these cases.

• The corporation’s attorney must focus on individuals and the company and decide whether to bring suit against an individual on behalf of the corporation.

On paper, this is a new and significant approach by DOJ.  The details will be interesting, but attorneys representing health care organizations need to adopt and adjust their investigative techniques to keep these new guidelines in mind.

TUOMEY SETTLEMENT

You may recall that Tuomey health care was found to owe the United States $237MM for its stark/anti-kickback violations.  The hospital previously may have made some ill-considered decisions on not only entering into certain contracts, but in its decision to go to trial with the government over the matter.

As a part of, and perhaps a result of, the litigation and settlement, Tuomey will be sold to South Carolina-based Palmetto Health.  While an extreme example, Tuomey will be remembered as a case of cascading errors and judgments that led to destruction of a health care system.

WHAT DO BOARDS DO?

Health system boards range from excellent safeguards and overseers to rubber stamps.  As the regulation of health care increases and as the stakes of bad decisions become more desperate, health system boards need to ask themselves “What do we do?”  I suggest that health system boards should:

• Decide what it is we do and what we do not do.  In other words, what is our mission, and what is the extent of that mission?

• How do we finance that mission, and how do we monitor our financial condition?

• How do we detect, measure, and supervise risk?

• How do we measure regulatory compliance, set standards for and monitor our mission, our hospital, our practice, our mission’s compliance?

• How do we maximize the quality of care while also maximizing the availability of health care?

• How do we prepare for what is next?  How do we look for, identify, and prepare for what is next?

EIGHT MILLION HERE, EIGHT MILLION THERE

Anthem has settled a California suit by paying $8.3 million dollars to the plaintiffs who claim that Anthem breached their insurance contract. Anthem was accused of increasing deductibles and prescription costs in the middle of the contract term and unfair business practices. Anthem did not “admit” liability but agreed to pay over 8 million dollars. There was no indication that Anthem executives took a cut in pay over this matter or the leaking of data on millions of its customers.

NARROW NETWORKS, AGAIN

A significant number of health plans on the Federal ACA exchange are narrow network plans. Questions regarding the adequacy of such networks continue to arise. A study from Harvard indicated that nearly 15 percent of the plans completely lacked in-network physicians for one or more specialties. This would appear to violate network adequacy requirements.

We can expect continuing questions in this matter. It is an important issue not only for consumers but also for physicians who have been shut out of such narrow network plans unless they agree to inadequate compensation rates.

The National Association of Insurance Commissioners has begun work on a new “model” network adequacy law. We hope for standards relating to balance billing, continuity of care, provider directories etc. as these issues move center stage under ACA network plans.

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 pwallace@joneswallace.com.