Whatever else happens this year on the healthcare law front will be overshadowed by The Big One: the Dec. 14 settlement between the U.S. Justice Department and HCA-The Healthcare Co.
Echoes from that $840 settlement, the largest healthcare fraud settlement ever, will reverberate throughout the legal system this year and beyond. Still lingering for Nashville-based HCA are the civil resolution of Medicare cost reporting fraud and physician kickback allegations, and individual criminal charges against current or former HCA executives.
Fort Lauderdale, Fla., defense attorney Gabriel Imperato of the firm Broad & Cassell says the number of federal prosecutors and investigators and FBI agents freed up after the HCA investigation concludes will allow the government to focus fraud enforcement efforts elsewhere.
The 2001 workplan for the HHS' inspector general includes kickbacks as a priority.
"I think there's going to be more enforcement against kickback arrangements, both criminally and what may be the newest aspect, civil monetary penalty enforcement when kickbacks can be proved," Imperato says.
He also predicted that more whistleblower lawsuits will be filed in the area of Stark law violations. "While it won't be a big government enforcement priority, it will be a ripe area for whistleblowers," says Imperato, who noted there are more than 50 Stark claim whistleblower suits in the legal system, most still under court-ordered seal.
Washington antitrust attorney William Kopit of the firm Epstein, Becker & Green in Washington says there will be increased use of private antitrust enforcement, or lawsuits filed by healthcare organizations against other healthcare organizations, as a means of addressing perceived unfair arrangements.
Kopit says because federal antitrust officials seem to be focusing so heavily on resource-consuming drug company investigations, there will be fewer bodies left to examine hospital mergers.
Kopit believes the unpredictable antitrust wild card will be the state attorneys general. "Some of them want to do more, but are constrained by resources," he says.
Washington healthcare tax attorney Thomas Hyatt says hospitals and healthcare organizations will monitor two important cases that should be resolved in 2001.
The Intermountain Health Care case currently litigated in federal tax court examines the basis for HMOs to qualify as charitable organizations. The Internal Revenue Service revoked the tax exemption for the not-for-profit Utah health system's HMO because it was providing a commercial insurance product the government said did not meet the IRS community benefit requirements for not-for-profits.
"It's an important case because if the Service prevails, a significant number of tax-exempt HMOs will have to revisit how they pay physicians," says Hyatt, who is with the firm Ober, Kaler, Grimes & Shriver.
Another tax case health systems will be watching is the appeal of the Redlands Surgical Center, a California surgery center jointly owned by a not-for-profit health system and a for-profit corporation.
"The tax courts have backed the IRS, and depending on what the appeals court does, it may or may not lessen restrictions on the ability of health systems to enter into ancillary joint ventures with (for-profits)," Hyatt says.