Internal Investigations

Both in-house and outside counsel are often called to lead or assist with internal investigations at hospitals or in physician groups.  These necessary investigations need to be handled with care.

Management may assume that all communications that include counsel, in person or by email, are wrapped in attorney-client privilege.  Such communications may receive the benefit of attorney-client privilege but not automatically.  Courts have ruled that simply including the attorney in an email stream does not make that email stream safe from disclosure under the attorney-client privilege.  Such communications must involve the attorney in his role as a provider of legal knowledge or advice.

Courts have found the question of privilege of in-house counsel particularly troublesome since in-house counsel often wears several hats as a business advisor and as a provider of legal knowledge and legal advice.

Our advice, when instigating an internal investigation-make sure a memo or other communication outlines what steps are necessary to clothe communications with attorney-client or work product privileges.

Qui Tam Changes

The DOJ recently announced policy changes regarding False Claims Act cases.  A Qui Tam or whistleblower case is generally filed under seal alleging violations of the federal False Claims Act.  After filing, the government has 60 days to decide whether it wishes to intervene and take over the litigation or to decline intervention.

In the past, when the government decided not to take over or “intervene” in the case, it would simply file a notice of its decision.  The DOJ has announced that now when they decide not to intervene, they will likely seek to file a motion to dismiss the whistleblower’s case.  There is no indication of the DOJ’s thinking as to which cases it will seek to file a motion to dismiss in and which cases it will simply file a notice of its decision not to intervene.  Where a case is obviously frivolous, a motion by the DOJ to dismiss would be helpful to those defending against frivolous cases.  However, there should not be an automatic correlation between a government decision not to intervene and the filing of a motion to dismiss as the government may have policy reasons unrelated to its decision not to intervene that do not reflect on the underlying value of the case.

2018 will be interesting as we see this new policy take shape.

Other Medicare News

Following the DOJ announcement about Qui Tam cases discussed above, the DOJ also announced it will be seeking to resolve 2 open questions.

A recent Court decision (AseraCare Hospice) held if there is a dispute about medical necessity between a provider and a payor, and an expert testifies the care is medically necessary, the DOJ cannot prevail in a False Claims Act case.  This would seem to make sense since the Courts have previously held a determination of medical necessity is not simply objective, but depends on the situation and the needs of the patient involved.  In essence, the DOJ wants to be able to argue that even where experts disagree about medical necessity, it should be able to claim fraud for some unknown and unstated reason.

Finally, issues regarding statistical sampling used to make allegations of fraud in False Claims Act cases continue to cause issues in the Courts.  Depending on the methodology used, statistical sampling can be a very good or very flawed way of projecting False Claims Act case dollar amounts.  Hopefully the Courts will set forth a clear set of minimum standards that would have to be met by a payor, including Medicare, before statistical sampling is deemed appropriate and admissible as “evidence.”

Tat Me DNR

The New England Journal of Medicine recently posted a letter from Florida physicians who are faced with a DNR issue.  A 70 year old patient was brought to the physicians’ hospital in Florida with a history of COPD, diabetes, atrial fibrillation and other issues.  Tattooed on the patient’s chest in large block letters was “Do Not Resuscitate” with what appeared to be a signature underneath the DNR tattoo.

To make the case even more interesting, when presenting at the ER, the patient was unable to communicate, had no identification and the hospital could not locate any next of kin.  The physicians wrestled with the issue and contacted their ethics consultants to try to decide what to do about the DNR tattoo.  Eventually, they were able to locate a filed copy with the Florida Department of Health of a DNR order which was consistent with the tattoo and the signature under the tattoo on the patient.  The choice was made to honor the DNR and the patient subsequently died.

The physicians wondered whether the DNR tattoo accurately represented the patient’s present intention.  The tattoo could reflect that present intention or it could be a regrettable act from the past that did not indicate his current intention.  Since the patient had an elevated blood alcohol level, it is understandable why the physicians may have worried about the patient’s decision making ability and intent.  What would you do in a similar situation?

Indiana FCA

A recently unsealed lawsuit claims 62 hospitals in Indiana and a Georgia based IT company violated the False Claims Act.  The basis of this suit is that the defendants submitted false meaningful use attestations or data to obtain more than $324 million in federal EHR incentive payments.  The case was filed in US District Court for the Northern District of Indiana in September 2016.

Interesting note, this case apparently arose from two malpractice attorneys being frustrated that hospitals would not provide timely responses to medical records requests.  I assume the attorneys then noted the hospitals claims of inability to provide the records and compared them to their EHR meaningful use certifications.  In other words, it appears the hospitals may have been telling one story to the government for incentive payments and yet were unable to provide reasonably quick access to electronic medical records.  Interesting and probably unintended consequences by the hospital’s refusal to provide timely record copies

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.