By: Charles B. Oppenheim, Robert L. Roth, and Patricia H. Wirth
The federal government sued Joseph Campbell, M.D. for alleged false claims submitted not by Dr. Campbell, but by a hospital. Dr. Campbell had an employment contract with the hospital for 20 hours of service per week. However, although Dr. Campbell did everything the hospital requested, he actually provided far fewer services.
The government claimed the contract was a scheme to pay Dr. Campbell for patient referrals in violation of the “Stark” Law. This violation would prohibit the hospital from billing Medicare for the services it provided to Dr. Campbell’s patients. Therefore, the hospital’s claims were alleged to violate the False Claims Act (“FCA”), which imposes civil liability upon any person who knowingly presents, or causes to be presented, a false claim for payment.
Dr. Campbell argued that even if the hospital’s claims were false because they violated the Stark Law, he did not submit the claims or “cause” them to be submitted to Medicare. Rather, the hospital submitted the claims. The government argued Dr. Campbell knew these were Medicare patients and if he referred them to the hospital, the hospital would bill Medicare. However, after a recent trial, the jury found Dr. Campbell did not violate the Stark Law so there was no FCA violation.
This seems like a happy ending since Dr. Campbell avoided harsh legal consequences such as substantial fines (which are not covered by malpractice insurance), potential exclusion from the Medicare and Medicaid programs, and possible suspension or termination of his license. However, Dr. Campbell actually paid a high price for this “victory.” He undoubtedly spent a lot of his own time, and money in legal fees, to defend this case. The case might have harmed Dr. Campbell’s professional reputation and disrupted his practice as well.
This prosecution could have been avoided. Dr. Campbell was an easy target because he did not provide the type or amount of services required by the contract. Instead of doing just what the hospital asked him to do, Dr. Campbell should have provided, and documented, 20 hours of service each week.
Was Dr. Campbell’s prosecution an aberration? Will Dr. Campbell’s victory discourage the government from bringing similar lawsuits? While the answers remain to be seen, it is likely this case signals a more aggressive enforcement approach by the government to target physicians for prosecution in ways that were unthinkable a few years ago. For example, the Medicare Recovery Audit Contractor (“RAC”) audits are being extended to physician offices which could provide an easy avenue to discover potential false claims or overpayments. Also, under a new law, physicians could be targets of FCA cases if they fail to refund Medicare overpayments within 60 days of discovering the overpayment.
Physicians should consider Dr. Campbell’s case a warning to prepare themselves for increased enforcement activity. While it is good practice for physicians to verify that they satisfy applicable Stark Law requirements, a document that on its face is in regulatory compliance is no defense if it is not carried out according to its terms. Physicians must actually provide the services required, and verify the compensation they are receiving is fair market value for those services. Similarly, if physicians are renting space or equipment from or to hospitals, physicians should be sure the rental is at fair market value.
Physicians also should review their office practices to be sure they have compliance programs and policies in place that respond to new regulatory matters. Again, physicians must actually be using and following these programs and policies. A compliance program that sits on a shelf and is not followed will be no help to defend an alleged violation. It might even be used against a physician to show knowledge of a particular problem.
Finally, if a physician becomes aware that he or she is under investigation by a governmental agency, the physician should consult qualified legal counsel immediately. If another party is involved, such as a hospital, the parties could have adverse interests and should consider using separate legal counsel from the outset.
Charles B. Oppenheim, Esq. is a principal in the Los Angeles office of Hooper, Lundy & Bookman, P.C., and has been a healthcare lawyer for over 20 years. He can be reached at firstname.lastname@example.org. Robert L. Roth, Esq. is the managing partner of the Washington, D.C. office of Hooper, Lundy & Bookman, P.C.. He can be reached at email@example.com. Patricia H. Wirth, Esq. is an associate in the Washington, D.C. office of Hooper, Lundy & Bookman. She can be reached at firstname.lastname@example.org.