The sentencing of Richard Scrushy late last month for alleged bribery offered a reminder to healthcare executives that state certificate-of-need programs are likely to remain under close scrutiny by enforcement agencies.
Following a judges decision to sentence the former HealthSouth Corp. chief executive officer to nearly seven years in prison and pay a $150,000 fine for his role in a bribery scheme, healthcare attorneys say that the CON process remains ripe for both abuse and the subsequent enforcement of state laws governing them.
The impact on the healthcare industry will be that it will continue to fuel individual prosecutions for healthcare fraud, said Marc Raspanti, an attorney with Miller Alfano & Raspanti in Philadelphia. I think youre going to see more criminal prosecutions continuing.
On June 28the eve of the one-year anniversary of Scrushys convictionU.S. District Judge Mark Fuller sentenced Scrushy to six years and 10 months in prison for allegedly bribing former Alabama Gov. Don Siegelman with $500,000 to secure rehabilitation services provider HealthSouth Corp. a seat on a state CON board when Scrushy led the company. Scrushy was fined $150,000, plus ordered to pay restitution of $267,000 to the United Way of Central Alabama. He must also serve 500 hours of community service. Scrushys lawyer said he will appeal the decision. Siegelman received a sentence of seven years and four months in prison and must pay a $50,000 fine.
The sentencing sends a clear message to healthcare leaders about proceeding with caution in the CON arena, which has a sordid past in some states (July 3/10, 2006, p. 12). In some states, CON has long had a reputation for being a political/regulatory cesspool, said Monte Dube, an attorney with McDermott Will & Emery. (The firm does work for Birmingham, Ala.-based HealthSouth) The message generally is when you jump in, you better play by the rules or be prepared to pay the price. Calling this decision garden-variety bribery, Dube said healthcare leaders should anticipate a higher level of scrutiny during the CON process.
Raspanti said this case is about more than just the CON process. The CON area has always been an area that has been subject to wild interpretations, he said. I dont think this particular case will stand for the case that CON laws need to be changedits more significant to executives, he said, adding that a way to eliminate the abuses in the CON process would be to make the laws more uniform. Even so, the message in this particular case surpasses the CON arena, according to Raspanti.