News & Insights
Dec 5, 2019
An abridged version of this Q&A appears in the Winter 2019 issue of the Nashville Post magazine.
As a former federal prosecutor, J.D. Thomas knows how to respond to criminal, civil, and regulatory matters, including government investigations and prosecutions, qui tam and False Claims Act defense and other enforcement actions. As a member of Waller's Government Investigations, Healthcare and Litigation groups, J.D. represents and advises companies and individuals in a broad array of criminal, civil, and regulatory matters.
Q: You're preparing to lead the health law section at the Tennessee Bar Association. What are the group's priorities for 2020? And how are those different from recent years?
A: First off, I have to say it is an honor to have been elected to serve as the chair of the Health Law section of the TBA and to have the opportunity to work with the talented attorneys in our section. The priorities for this year are to continue to produce the kind of quality educational content that the section has been known for year over year. Our annual Health Law Forum is one of TBA’s largest legal continuing education courses. Tennessee’s Health Law section gathers the largest group of health lawyers outside of well-known national conferences. This year, I hope to expand our year-long content offerings and hopefully host webinars on breaking legal issues.
Q: You've been with Waller since 2014. How have you seen the government's investigative priorities evolve?
A: Two ways: First, is the government's renewed focus on investigating and prosecuting individual providers. In September 2015, the Department of Justice issued a memo directing US Attorney's offices to focus on individual culpability. In the past couple of years, we've really seen the fruits of that directive here in Nashville and the rest of Tennessee with significant criminal prosecutions of individual doctors, pharmacists and other healthcare practitioners.
Second, the government has become increasingly comfortable with litigating health care fraud cases and, if necessary, bringing them to trial. We've seen this trend here in Nashville, throughout the state, and beyond.
Q: Can you talk about the investigative process and the length of time cases take to be brought? It seems like various opioids cases have taken form more quickly in recent years.
A: The typical length of a case really depends on whether it is civil or criminal. Criminal cases tend to move faster, since the government is usually investigating specific actions by individuals, rather than entities and is looking for evidence that can be proved beyond a reasonable doubt. Depending on the conduct being investigated, there can also be more resources or investigating agencies involved in criminal cases.
The recent flurry of opioid-related criminal prosecutions is a great example. They are a direct result of the resources being funneled into that area and the Department of Justice’s focus on those prosecutions. Nashville is home to the Appalachian Regional Prescription Opioid Strike Force committed to those efforts. It is comprised of dedicated prosecutors, data analysts and special agents with the FBI, HHS-OIG and DEA working in conjunction with other state and federal law enforcement agencies, including the Tennessee Bureau of Investigation, which is why we've seen so many prosecutions here in Tennessee.
Civil cases, on the other hand, are often brought against entities. They involve significantly more documentation and can revolve around questions of medical necessity or interpretations of complex regulations that are not always black and white. Often, these types of cases are brought by whistleblowers who are often pushing their own interpretation of those issues. These cases can take years to resolve and/or for the government to pursue and decide it doesn't want to intervene. Overall I think the length of prosecutions – both criminal and civil – have remained largely the same. We’ve just seen more of both is the time since I left the U.S. Attorney’s Office.
Q: Are you seeing emerging pockets of fraud as the health care sector continues to evolve? And how are you talking to clients about beefing up potential weaknesses in compliance?
A: We are seeing a lot of recent activity in the clinical laboratory, compounding and vision spaces. We are also seeing an increasing number of larger-scale False Claims Act cases brought against physician practice entities. As practices continue to expand and more capital is deployed, they become attractive targets for whistleblowers and the attorneys that represent them. Beyond that, the government has continued to focus on Stark Law and Anti-Kickback Statute investigations and prosecutions. It's always hard to say what the next area of focus will be, but a good bet is where reimbursement is growing, fraud investigations and prosecutions will follow. Behavioral and medication-assisted treatment are two areas where I think we can expect additional activity.
We work closely with our clients to help them understand this changing landscape and keep abreast of any changes in enforcement focus or guidance issued by the Department of Justice or HHS-OIG. We also talk to our clients about the importance of a good compliance program and the need for constant training, education, and monitoring to help identify and reduce risk. At the end of the day though, even the best program cannot completely reduce risk, so we also talk to them about how to respond if they find themselves involved in a government investigation.
Q: The requirements and market practices around reporting, sharing and using health care data have ballooned this decade. Has that made monitoring and investigating potential issues easier?
A: Data is a huge driver in government investigations. New reporting requirements have certainly made it easier for whistleblowers and others to identify suspected fraud waste and abuse and bring it to the attention of the government. That said, the government has been leveraging provider data for some time and is getting better at it every day especially in the post-acute space. For clients that have a good handle on their data, it’s also made it easier for them to manage compliance challenges. However, sometimes the data can be overwhelming or lead in the wrong direction. I always counsel clients who are audited by various Medicare and Medicaid contractors to make sure they take a close look at what data is requested and what other data may be available to support services billed.
Q: What are some notable cases around the country that you're tracking that could have repercussions for Nashville and/or Tennessee?
A: Two big ones:
United States v. AseraCare, a recent 11th Circuit decision involving medical necessity claims brought by the government under the False Claims Act. The court held that the government needs to show "something more than the mere difference of reasonable opinion" between two medical practitioners to establish that a claim isn't medically necessary and therefore false. At the end of the day, this decision is going to raise the bar for the government to prove that a claim is “false” because it lacked medical necessity. In short, it will require more than a difference of opinion between a government expert reviewing the claims after the fact and the treating physician. I like to refer to this requirement as "medical necessity plus" with the "plus" being something more, like pressure to make and admission, bonuses based on services rendered, to recognition internally that claims may not be medically necessary.
U.S. ex rel. J. William Bookwalter, III, M.D. et al. v. UPMC et al. is a 3rd Circuit case, where the court overruled a dismissal of a False Claims Act case brought on alleged violations of the Stark Law. The court held that the case should not have been dismissed and discovery could go forward because there appeared to be a connection between physician productivity-based compensation and the volume of those surgeons’ referrals for inpatient hospital services. One allegation the court focused on is that some of the physicians received compensation in excess of collections for the professional services they rendered. While this decision may be at odds with some of the proposed changes to the Stark Law and Anti-Kickback Statute, it’s still good law and is sure to invigorate some Stark Law-based False Claims Act cases. The UPMC decision is a bit disquieting for physician employers. While the court seemed to focus on the weight of all the allegations taken together, some of the allegations the court focused on are not uncommon for many facilities.
Q: Nashville General Hospital's class action vs. Momenta Pharmaceuticals was recently granted class-action status, marking the first time in nearly half a century that a city entity has done so. How unusual is it to see a publicly owned safety-net hospital in the lead of a case like this?
A: It is becoming more and more common. As hospitals face ever-tighter budgets, we've seen more and more of them turn to class action and other litigation to try to recover money they believe they improperly paid. Anti-trust actions like this one are particularly popular, and the benefits to Nashville General as the lead plaintiff could be substantial.
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