Feds to continue scrutiny of health care consultants
Unlike its celebrated case against two Kansas City attorneys two years ago, the federal government’s recent intervention in the lawsuit against the New York City-based consulting firm KPMG for allegedly preparing false hospital cost reports submitted to Medicare and Medicaid isn’t likely to be the last of its kind, experts say.
"In addition to the [KPMG] case, there are a number of ongoing investigations involving consultants, particularly in cost-report activity, around the country," reports health care attorney Gabe Imperato of Broad & Cassel in Fort Lauderdale, FL.
"Fortunately or unfortunately, they are mostly brought by the same counsel that represents all these whistle-blowers," he adds. "But it certainly has become a more significant potential threat than previously."
David Ogden, assistant attorney general of the Department of Justice’s Civil Division, says the Justice Department’s intervention in this suit demonstrates the government’s intention to combat health care fraud not only by providers but also by consultants who prepare false claims that are submitted to Medicare.
Consultants always have faced some liability for their involvement in questionable transactions. But lately, this liability has taken on new forms in the criminal and civil arena, Imperato says.
According to Imperato, the KPMG case breaks significant ground. In it, the government alleges that the firm prepared cost reports that included false claims for reimbursement for five Florida hospitals acquired by the Nashville-based Columbia Hospital Corp. in 1992. The reports were submitted by KPMG between 1990 and 1992 on behalf of Basic American Medical, Inc. and Columbia Hospital Corp.
The suit also alleges that KPMG prepared reserve cost reports, internal documents identifying the falsely claimed costs included in the filed cost reports. The complaint alleges that the purpose of the reserve cost reports was to set aside funds to repay the government in the event the unallowable costs eventually were discovered.
One of the underlying issues in both the criminal and civil case is whether a third-party consultant has a duty to report known errors resulting in unwarranted federal payment, Imperato says. But because each case is different, there are numerous interpretations about consultant liability, he adds. Even so, the Department of Health and Human Services Office of Inspector General’s (OIG) guidance for third-party billing companies should serve as a guide.
In it, the OIG specifically says that if a third-party billing company or consultant identifies misconduct or failure to report a known overpayment, it is obligated to bring it to the attention of the client. If the client fails to take corrective action it then is obligated to terminate the engagement or report the matter to the government.
"I think it is safe to say that a consultant does not have a duty to report misconduct or a known overpayment on the part of its client," argues Imperato. "On the other hand, a consultant clearly can be held accountable if [he or she] otherwise takes overt actions to cause the submission of an improper claim or takes actions to conceal a known overpayment."
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