When to Speak Up and Speak Out

Directly contradicting another person can carry the potential to feel antagonistic or rude. But in the realm of compliance, it’s also often necessary.

Rules are complicated, and smart people can interpret things differently. People are going to make mistakes, and experts might assign different levels of risk to a particular action.

You can probably tell I am about to disagree with the analysis of a fellow contributor. Last week on Talk Ten Tuesdays, Timothy Powell noted that Medicare Advantage (MA) plans are downcoding hospital claims. He’s obviously completely correct about that. But Tim asserted that a hospital that refuses to fight the downcoding faces risk under the False Claims Act (FCA).

On that point, I strongly disagree. There are legal and practical reasons that a hospital is unlikely to face FCA liability if it accedes to bullying by a MA plan.  

The False Claims Act requires proof of scienter, that is, intent to do something wrong. FCA liability requires proof that you knew you were doing something wrong, or you at least acted with reckless disregard of the truth. Imagine how difficult it would be to convince a jury that a hospital knew it was doing something wrong by being underpaid. “Herculean” is a word that understates the challenge of that task. 

There is an additional bar to a potential FCA action. False Claims Act liability generally requires harm, or at least potential harm, to the government fiscal condition. I am not aware of a single situation where under-coding has given rise to FCA liability.

Courts routinely require the government or a relator to show that a claim cost the government money – or would have cost the government money if it the claim had been paid. If a scheme is detected before the government pays the claim, the defendant can’t use the fact they were caught as the basis to avoid FCA liability, but there must have been the potential that the defendant was going to profit from the improper act. Here, the MA plan has already received its capitated payment.

The only question is how the established government payment is going to be allocated between the plan and the hospital.     

Now, I am not an expert on all MA reimbursement, but it’s possible that the current payments are a factor in future risk rating, so perhaps there could be a future governmental loss. But even to the extent that is true, let’s return to scienter.

It is extraordinarily difficult to convince anyone that a victim of an illegal scheme should be punished. A hospital’s decision not to appeal wrongful conduct by a MA plan is not going to result in the hospital incurring FCA liability. I totally agree with Tim that hospitals should fight back against this sort of bullying. I just don’t want hospitals already in the midst of a very trying time to unnecessarily add an unrealistic risk to the calculus of whether to challenge a MA plan.  

On a different topic, also part of the trying times, at least in Minnesota there is an unnecessary staffing crisis. Immigrants provide a significant share of healthcare, and right now in Minnesota anyone born elsewhere, and many people with darker skin, are terrified. Whatever your view of immigration policy, if you have a solid understanding of what is happening right now in Minnesota, I suspect you will be troubled. 

For example, I don’t think it is unreasonable to think we can all agree that if the government feels a nursing assistant is in the country improperly, before arresting them, they would validate that belief. If the information is not verified prior to an arrest, certainly before shackling the individual and flying them from Minneapolis to Texas, they would check.

And I hope that every sane person agrees that if the government flies a shackled nursing assistant who is here legally from Minnesota to Texas before it determined the person’s status, the government would, upon recognizing its misconduct, fly the person back to their home at the governmental expense.

But the U.S. Department of Homeland Security (DHS) apparently doesn’t agree, because all three of those things are happening, with alarming regularity. Minnesota residents legally in the country are being released in Texas and told to get themselves home. As a result, there are nursing assistants, nurses, and physicians who are here legally who aren’t going to work, because they are scared of being shackled and flown to Texas. 

Due process historically has been well-accepted in this country, but it isn’t universal in the world, and there are clearly some people who feel comfortable with its reduction or even elimination in America. I am very worried about what feels like the erosion of rights. I’ve lost two recent administrative law judge (ALJ) hearings despite having really strong legal arguments. 

I could be wrong, but I feel like the judge just deferred to the government’s position, a feeling supported as I talk with other lawyers and consultants who readily agree that the Medicare Appeals Counsel is reversing ALJs more frequently than it did.

A government that will dump a Minnesotan in Texas may also not care when a Medicare Administrative Contractor (MAC) denies physical therapy claims because the therapist recommended home exercise, or care if an MA plan says a three-day stay is outpatient.   

My message today is that sometimes it is important to disagree. It is best done politely. But whether you believe that a professional is making a bad recommendation or the government is taking actions in contravention of the law or common sense, speak up.