Melissa L. Jampol, Member of the Firm in the Health Care & Life Sciences and Litigation practices, in the firm’s New York office, was quoted in COSMOS Report on Medicare Compliance, in “Surgery Hospital Settles FCA Case for $14M Over Contributions to Medical Group Foundation,” by Nina Youngstrom.
Following is an excerpt:
In a case about payments to a physician group’s nonprofit foundation and free clinic space, Dunes Surgical Hospital (DSH) in South Dakota, United Surgical Partners International Inc. (USPI) and USP Siouxland Inc. have agreed to pay $14.1 million to settle false claims allegations, the U.S. Department of Justice (DOJ) said Sept. 16. DOJ alleged their assistance violated the Stark Law and Anti-Kickback Statute (AKS). …
“When you look at the impact the referrals are having on the hospital, that’s a factor the government would be very interested in,” said former federal prosecutor Melissa Jampol, now with Epstein Becker & Green.
The settlement emphasized the cooperation of the Dunes parties, including making employees available for interviews. Attention has been drawn to cooperation credit in recent settlements, apparently to showcase the benefits of self-disclosure, Jampol said. And now DOJ has introduced a whistleblower awards program, offering money to people who report corporate criminal conduct. At the same time, if the corporation gets the whistleblower’s internal report and self-discloses to DOJ’s Criminal Division within 120 days and before DOJ contacts the organization, it will be eligible for DOJ’s corporate enforcement and self-disclosure policy even though DOJ has already heard from the whistleblower. In mid-September, several U.S. attorneys’ offices announced their own version of the whistleblower awards program.
All this activity “formalizes” the process of self-disclosure and “gives you the carrot and the stick of what will happen if you go down this route and if you don’t,” Jampol said. …
‘You Have to Get Into the Weeds’ of Donations
It’s unusual to see charitable donations flowing from a hospital to a referral source instead of the other way around, Jampol said. Whether they run afoul of fraud and abuse laws depends on the facts and circumstances. Foundations are something “OIG has grappled with for a long time,” she noted. OIG may object to donations under the one-purpose test (i.e., the AKS covers arrangements where one purpose of the remuneration is to induce referrals of federal health care program business). A 2004 OIG advisory opinion, however, green-lit a plan by a health system’s charitable foundation to make a series of cash donations to a hospice over five years. Although the donations could implicate the AKS if the intent were there, OIG said it wouldn’t impose administrative sanctions for various reasons, including the fact that referrals from the hospice to the health system had built-in time limits because patients are required to give up their rights to curative care. “It’s a totally different set of facts,” Jampol noted. Before considering a donation, organizations “have to get into the weeds and vet it very carefully.”
The other allegations—about free or discounted clinic space and staff—are a reminder for health systems to tread carefully with rental arrangements with referral sources, Jampol said. “Sometimes people think those cases have gone away and this case shows they haven’t. It’s not old news.” …
