Last week's $1.5 million civil settlement by New York-based accounting firm Ernst & Young for allegedly giving improper advice to hospitals is the latest government enforcement effort to track down not just healthcare providers but those who advise them on how to break the law.
"There are many of these cases floating through the system, and this settlement is a signal that the government will continue to look beyond providers to those giving advice," said Marc Raspanti, a whistleblower attorney with the law firm Miller, Alfano & Raspanti in Philadelphia.
Patrick Meehan, the U.S. attorney in Philadelphia, announced the Ernst & Young settlement on July 20, closing an investigation into alleged clinical lab billing fraud that dated back to 1991. The lawsuit, filed in U.S. District Court in Philadelphia, alleged that Ernst & Young gave bad advice about clinical laboratory billing to nine hospitals, which then used the advice to unjustly enrich themselves. Outpatient blood tests were performed and billed to Medicare but were not medically necessary, the government charged. The company settled without admitting wrongdoing.
All nine of the hospitals previously settled lab-upcoding claims. Five of the hospitals went to Ernst & Young from 1991 to 1995 to check the legality of advice they had received from billing consultant Harry Metzinger, who with his partner, William Ritter, settled civil allegations related to their billing advice in 1997. More than 200 hospitals entered into agreements with Metzinger Associates.
According to the U.S. attorney's office, Ernst & Young consultants approved the advice, leading to more than $900,000 in improper claims being paid. The company could have been liable for three times that amount, plus up to $10,000 per alleged false claim, which in this case amounted to more than 200,000 claims.
"This settlement relates to healthcare consulting services performed for a handful of hospitals from 1991 to 1995," Ernst & Young said in a news release. "It enables us to put this matter behind us."
Raspanti said the settlement continues a trend initiated by the U.S. attorney in Philadelphia that since has spread to U.S. attorney offices in such cities as Boston and Los Angeles. He said the government has broadened its reading of the federal False Claims Act to include consultants, accountants, attorneys and other hospital advisers among those who may "cause to submit" false claims.
"There's a cottage industry of Medicare reimbursement volumizers who advise providers how to collect the most money with the least amount of effort," Raspanti said. "And in some cases, the advice is so incredibly illegal that they, too, are becoming targets."
Meehan, whose office filed the lawsuit, said, "This settlement should provide a wake-up call, not only to healthcare providers, but also to the consultants on whose advice they rely."
The hospitals involved were: Community Hospital of Anderson and Madison County, Indianapolis; Conemaugh Memorial Medical Center, Johnstown, Pa.; DePaul Medical Center, Norfolk, Va; Good Samaritan Regional Medical Center, Pottsville, Pa.; Kane (Pa.) Community Hospital; Logansport (Ind.) Memorial Hospital; Norwalk (Conn.) Hospital; Pocono Medical Center, East Stroudsburg, Pa.; and Wishard Memorial Hospital, Indianapolis.
Associate U.S. Attorney James Sheehan, who began prosecuting the cases 13 years ago, said with last week's settlement the government has collected about $18 million from the various defendants.
"We're done now," Sheehan said. "This is it. The Metzinger case is finally over."