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False Claims Violations

Medical Staff Affairs Monthly, August 15, 2005

Dear Colleague,

It has been a hot summer in my home town of Philadelphia. While this is good news for my tomato plants, it has made our infamous Philadelphia lawyers more irritable than usual.

Our town hosts one of the most aggressive US attorney offices in the nation when it comes to health care fraud. And in a landmark event, it has just settled the nation's first case charging an acute care hospital under the False Claims Act for failure of care violations.

These federal attorneys have pioneered the use of the False Claims Act to find nursing homes liable for poor quality care. The argument goes that billing the government for services that are improper is a "false claim" under federal law. Improper services might be those that are clinically unnecessary or so substandard as to be indefensible. In the case of Central Montgomery Medical Center (which is owned by Universal Health Services) the government alleged illegal use of physical and chemical restraints on patients in medical-surgical settings.

The hospital denies the allegations and asserts its use of patient restraints was medically necessary and proper. However, it settled with the government for 200,000 dollars to avoid a "long, expensive and complicated legal battle." Perhaps it was also motivated by the fact that a state survey performed in the hot month of August 2002 found that in 91 of 91 cases, the hospital did not adequately document that it complied with Medicare policy on restraints or had skipped required steps. The government alleged that for a ten month period in 2002 bills rendered to those patients restrained were "false claims."

Many of you reading this column work with physicians to garner compliance with JCAHO, CMS and other regulations and many of us find it enormously frustrating to dot all of the "I"s and cross all of the regulatory "T"s in our clinical practices.

But it is not just the Joint Commission that we need to be concerned about if we fail to meet compliance nirvana. Nursing homes have been hit with false claims violations for years as federal investigators uncover compliance failure. Now it's acute care hospitals, and of course, physicians may be next when they bill for such services. Clearly effectively educating staffs to meet all government/accreditation requirements is becoming more important than ever.

There is one good thing that can be said for the decision of Central Montgomery to settle the case. In August we just can't afford more hot air and that coming from lawyers' orations can certainly heat up the environment. In London, England a lawyer representing the Bank of England has recently wrapped up a 119 day opening statement in what is believed to be the longest running presentation in the country's legal history. His opening speech smashed the previous seventy-three day record set by opposing counsel in the same case.

Best regards,

Todd Sagin, MD, JD
National Medical Director
The Greeley Company

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