First nursing homes, next managed care?: Limiting liability in quality of care cases under the false claims act

American Journal of Law and Medicine

Volumn 26, Issue 1, 2000, Pages 69-88

  Peterson, Kathleen A ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; GOVERNMENT; HEALTH CARE QUALITY; HEALTH INSURANCE; LAW; LAW SUIT; MALPRACTICE; MANAGED CARE; MEDICAID; MEDICAL LIABILITY; MEDICARE; NEGLIGENCE; PATIENT; PHYSICIAN; UNITED STATES;

FRAUD; HUMANS; LIABILITY, LEGAL; MANAGED CARE PROGRAMS; NURSING HOMES; PRACTICE GUIDELINES; QUALITY OF HEALTH CARE; UNITED STATES;

EID: 0034058942     PISSN: 00988588     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (194)

1. In Hall v. Hilbun, 466 So. 2d 856 (Miss. 1985), the Supreme Court of Mississippi explained that: Medical malpractice is legal fault by a physician or surgeon. It arises from the failure of a physician to provide the quality of care required by law. . . . Each physician . . .has a duty of care consistent with the level of expertise the physician holds himsef out as possessing and consistent with the circumstances of the case. That duty is non-delegable. It is owing to each patient he or she undertakes to treat, and in that regard the patient has a correlative right. Injury caused by substantial violations of the physician's duty and the patient's right may subject the physician to tort liability. Liability turns on a failure to provide the required level of care. It matters not whether this failure results from incompetence or negligence. Id. at 869.
2. See generally Jose L. Gonzalez, A Managed Care Organization's Medical Malpractice Liability for Denial of Care: The Lost World, 35 HOUS. L. REV. 715 (discussing theories of managed care liability for denying care).
3. Under the Medicare+Choice program, participants may use their Medicare funds to enroll inmanaged care plans. See Medicare Program; Establishment of the Medicare+Choice Program, 63 Fed.Reg. 34,968, 34,968-69 (1998) (codified at 42 C.F.R. pts. 400, 403, 410, 411, 417 & 422).
4. See 31 U.S.C.A. § 3730(b)(1) (West 1999).
5. See id. § 730(c)(1).
6. See id. § 3730(d).
7. See id. § 3730(e)(4)(B) (defining "original source" as "an individual who has direct and independent knowledge of the information on which the allegations are based.").
8. See generally Carol A. Crocca, Annotation, Validity, Construction, and Application of StateStatutory Provisions Limiting Amount of Recovery in Medical Malpractice Claims, 26 A.L.R.5th 245 (1995 & Supp. 1999) (discussing and analyzing various state medical malpractice damage limitationprovisions).
9. 31 U.S.C.A. §§ 3729-33.
10. See id. § 3730(d).
11. Office of the Inspector Gen., U.S. Dep't of Health & Human Services, "Who Pays? You Pay. ": Report Medicare Fraud (last modified Feb. 2, 2000) 〈http://www.hhs.gov/progorg/oei/outreach/outreach.htm〉.
12. See id.
13. Id.
14. See id.
15. 42 U.S.C.A. §§ 1320a-3, a-4, a-5, a-7b, 1396k.
16. Id. §§ 1320a-7c, a-7d, a-7e, 1320d. Significantly, the Health Insurance Portability and Accountability Act of 1996 created the Health Care Fraud and Abuse Control Program. See id. §1320a-7c. This program was aimed at coordinating a national effort at all levels of government to combat health care fraud. See id. Covering everything from investigations of health care delivery, including creating a national databank compiling adverse fraud and abuse actions against providers, to creating new remedies and funding sources for anti-fraud efforts, this sweeping legislation is the impetus behind the "Who Pays? You Pay." program. See id.
17. Id. § 1395nn.
18. Id. § 1997. This list of statutes is by no means all-inclusive. For a discussion of several statutes the government uses to combat health care fraud, see generally U.S. DEP'T OF JUSTICE HEALTH CARE FRAUD REP.: FISCAL YEAR 1998 (1999), available in Health Care Fraud Report Fiscal Year 1998 (last modified Feb. 16, 2000) 〈http://www.usdoj.gov/dag/pubdoc/health98.htm〉 [hereinafter 1998 FRAUD REPORT]. See also Leon Aussprung, Fraud and Abuse: Federal Civil Health Care Litigation and Settlement, 19 J. LEGAL MED. 1, 5-17 (1998).
19. Id. § 1997. This list of statutes is by no means all-inclusive. For a discussion of several statutes the government uses to combat health care fraud, see generally U.S. DEP'T OF JUSTICE HEALTH CARE FRAUD REP.: FISCAL YEAR 1998 (1999), available in Health Care Fraud Report Fiscal Year 1998 (last modified Feb. 16, 2000) 〈http://www.usdoj.gov/dag/pubdoc/health98.htm〉 [hereinafter 1998 FRAUD REPORT]. See also Leon Aussprung, Fraud and Abuse: Federal Civil Health Care Litigation and Settlement, 19 J. LEGAL MED. 1, 5-17 (1998).
20. See 1998 FRAUD REPORT, supra note 18. The $12 billion figure, representing approximately seven percent of total Medicare fee-for-service spending in 1998, actually indicated a significant decline from previous years' estimates of wasteful spending. See id. For example, wasteful spending accounted for $20.3 billion (or 11%) of Medicare spending in fiscal year 1997, and $23.2 billion (or 14%) in fiscal year 1996. See id.
21. See Carolyn J. Paschke, Note, The Qui Tam Provision of the Federal False Claims Act: The Statute in Current Form, its History and its Unique Position to Influence the Health Care Industry, 9 J.L. & HEALTH 163, 165 (1995).
22. See Memorandum from Eric H. Holder, Jr., Deputy Attorney General, Office of the Deputy Attorney General, to all United States Attorneys, all First Assistant United States Attorneys, all Civil Health Care Fraud Coordinators in the Offices of the United States Attorneys and all Trial Attorneys inthe Civil Division, Commercial Litigation Section 1, Jun. 3, 1998, available in Deputy Attorney General's FOIA Reading Room (last modified Nov. 20, 1998) 〈http://www.usdoj.gov/04foia/readingrooms/chcm.htm〉 [hereinafter Holder Memorandum] (referring to the False Claims Act (FCA)as "[o]ne of the Department's most important tools in protecting the integrity of Medicare and other taxpayer-funded health care programs"); Aussprung, supr e 18, at 5 (identifying the FCA as "[t]he primary and most frequently used statute in civil health care fraud").
23. See Aussprung, supra note 18, at 17-31.
24. United States ex rel. Pogue v. American Healthcorp, Inc., 914 F. Supp. 1507, 1508 (M.D. Tenn. 1996) (citing Young-Montenay, Inc. v. United States, 15 F.3d 1040, 1043 (Fed. Cir. 1994)). A debatable issue exists as to whether the FCA places an additional burden on plaintiffs to prove that the alleged false statements were material in that the government relied on them in making its funding decision. This issue will be addressed more completely infra Part V.B.-C.
25. See JOHN T. BOESE, CIVIL FALSE CLAIMS AND QUI TAM ACTIONS 2-9 (Supp. 1999) (discussingcommon false claim scenarios).
26. See United States ex rel. Thompson v. Columbia/HCA Healthcare, Corp., 125 F.3d 899, 902 (5th Cir. 1997); Pogue, 914 F. Supp. at 1509-12; Ab-Tech Constr., Inc. v. United States, 31 Fed. Cl.429, 434 (1994) (holding that a government contractor implicitly certified compliance with the Small Business Act in submitting payment vouchers), aff'd, 57 F.3d 1084 (Fed. Cir. 1995). But see United States ex rel. Joslin v. Community Home Health, 984 F. Supp. 374, 383-85 (D. Md. 1997) (rejecting the implied certification theory).
27. See infra text accompanying note 29.
28. See David R. Hoffman, The Role of the Federal Government in Ensuring Quality of Care in Long-Term Care Facilities, 6 ANNALS HEALTH L. 147, 148 (1997), The FCA defines "claim" broadly as including: any request or demand, whether under contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded. 31 U.S.C.A. § 3729(c) (West 1999).
29. See Mary DuBois Krohn, Comment, The False Claims Act and Managed Care: Blowing the Whistle on Underutilization, 28 CUMB. L. REV. 443, 458 (1998).
30. See Paschke, supra note 20, at 165. The FCA currently defines "knowing" to mean that "a person, with respect to information - (1) has actual knowledge of the information; (2) acts in deliberateignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth orfalsity of the information, and no proof of specific intent to defraud is required." 31 U.S.C.A. §3729(b).
31. See Kaz Kikkawa, Medicare Fraud and Abuse and Qui Tam: The Dynamic Duo or the Odd Couple?, 8 HEALTH MATRIX 83, 86 (1998); Paschke, supra note 20, at 164.
32. See Kaz Kikkawa, Medicare Fraud and Abuse and Qui Tam: The Dynamic Duo or the Odd Couple?, 8 HEALTH MATRIX 83, 86 (1998); Paschke, supra note 20, at 164.
33. See 31 U.S.C.A. § 3730(a) (West 1999).
34. See id. § 3730 (b)(1). "Qui tam" abbreviates the Latin phrase "qui tam pro domingo regequam pro si ipso in hoc parte sequitur" translated as "Who sues on behalf of the King as well as for himself." BLACK'S LAW DICTIONARY 1251 (6th ed. 1990).
35. See Kristen Hallam, ACHE Preview: Strategizing Compliance, MOD. HEALTHCARE, Feb. 16,1998, at 40, 20.
36. See Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (codified as amended in scattered sections of 26 U.S.C. and 29 U.S.C.); John T. Boese, When Angry Patients Become Angry Prosecutors: Medical Necessity Determinations, Quality of Care and the Qui Tam Law, 43 ST. LOUIS U.L.J. 53, 59-60 (1999).
37. See Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (codified as amended in scattered sections of 26 U.S.C. and 29 U.S.C.); John T. Boese, When Angry Patients Become Angry Prosecutors: Medical Necessity Determinations, Quality of Care and the Qui Tam Law, 43 ST. LOUIS U.L.J. 53, 59-60 (1999).
38. As of July 1, 1998, the Medicare program began paying skilled nursing facilities on a prospective payment system, pursuant to section 4432(a) of the Balanced Budget Act of 1997. See Health Care Fin. Admin., SNF Prospective Payment System (last modified Feb. 22, 2000) 〈http://www. hcfa.gov/medicare/snfpps.htm〉. Capitated payments may make it more difficult for federal investigators to detect quality of care fraud, as there is less of a paper trail documenting services rendered, making reliance on qui tam insiders more important. See Laurie McGinley & David S. Cloud, U.S. Takes Aim at HMO Fraud in Medicare and Medicaid, WALL ST. J., Oct. 19, 1998, at A28.
39. As of July 1, 1998, the Medicare program began paying skilled nursing facilities on a prospective payment system, pursuant to section 4432(a) of the Balanced Budget Act of 1997. See Health Care Fin. Admin., SNF Prospective Payment System (last modified Feb. 22, 2000) 〈http://www. hcfa.gov/medicare/snfpps.htm〉. Capitated payments may make it more difficult for federal investigators to detect quality of care fraud, as there is less of a paper trail documenting services rendered, making reliance on qui tam insiders more important. See Laurie McGinley & David S. Cloud, U.S. Takes Aim at HMO Fraud in Medicare and Medicaid, WALL ST. J., Oct. 19, 1998, at A28.
40. See 31 U.S.C.A. § 3729(a).
41. See id. § 3729(a)(7).
42. See id. § 3730(d).
43. See Deanna Bellandi & Kristen Hallam, G-Men Federal Resources are Stacking up to Tackle Healthcare Fraud, MOD. HEALTHCARE, Mar. 9, 1998, at 32, 33-34.
44. See U.S. DEP'T OF JUSTICE HEALTH CARE FRAUD REP.: FISCAL YEAR 1997 (1998), available in Health Care Fraud Report Fiscal Year 1997 (last modified Feb. 16, 2000) 〈http://www.usdoj.gov/dag/pubdoc/health97.htm 〉 [hereinafter 1997 FRAUD REPORT].
45. See Kikkawa, supra note 30, at 91; see also Paschke, supra note 20, at 173-74.
46. See Michael M. Mustokoff et al., The Government's Use of the False Claims Act to Enforce Standards of Quality of Care: Ingenuity or the Heavy Hand of the 800-Pound Gorilla, 6 ANNALS HEALTH L. 137, 142-43 (1997).
47. See id. at 141, 143-44.
48. See Kikkawa, supra note 30, at 122.
49. See Paschke, supra note 20, at 165.
50. See Hoffman, supra note 27, at 154.
51. No. 96-1271 (E.D. Pa. Feb. 21, 1996). David R. Hoffman, Assistant U.S. Attorney for theEastern District of Pennsylvania, was a prosecutor in the GMS Tucker case, and has written an articledescribing the case in detail. See generally Hoffman, supra note 27.
52. See Hoffman, supra note 27, at 152-53.
53. See id.
54. See id.
55. See id. at 149-52 (citing 42 C.F.R. § 483.1-.75 (1996), and the Nursing Home Reform Act,42 U.S.C. § 1396r(b)(1995)).
56. See id.
57. See id. at 154.
58. See id. at 155.
59. See Eleanor D. Kinney, Behind the Veil Where the Action Is: Private Policy Making and American Health Care, 51 ADMIN. L. REV. 145, 166-67 (1999) (noting that the purpose and provisionsof Agency for Health Care Policy and Research (AHCPR) attach to the private development of clinicalguidelines and quality standards).
60. Nursing Home Services Fraud: Hearing on Fraud and Abuse in Nursing Homes Before the Subcomm. on Human Resources of the House Comm. on Gov't Reform and Oversight, 105th Cong. 135,143 (1997) [hereinafter Nursing Home Hearing] (statement of Suzanne M. Weiss, Vice President and Counsel, Public Policy, American Association of Homes and Services for the Aging).
61. See id. at 141-44.
62. Pub. L. No. 100-203, 101 Stat. 1330 (codified as amended in scattered sections of 42 U.S.C.).
63. Nursing Home Hearing, supra note 56, at 141(citing 42 C.F.R. § 483.25).
64. See id. at 141-44.
65. See e.g., infra Part II.B.-E.
66. No. 98-CV-139, 1998 U.S. Dist. LEXIS 4836 (E.D. Pa. Feb. 4, 1998).
67. See Robert J. Milligan & Steven Wiggs, Nursing Homes Face More Quality-of-Care Suis: Nursing Home Recovery Act, FCA and State Laws Have Led to More Suits, Larger Damages, NA'L L.J., July 6, 1998, at B1 ting Complaint at 15, Chester Care Center (98-CV-139)).
68. Chester Care Center, 1998 U.S. Dist. LEXIS 4836, at *2.
69. See 1998 FRAUD REPORT, supra note 18.
70. See id.
71. See Chester Care Center, 1998 U.S. Dist. LEXIS 4836, at *3.
72. See generally id. (setting forth the specific conditions of the settlement, implicating a number of outside sources of regulation including the AHCPR Guidelines, the Nursing Home Reform Act,Titles XVIII and XIX of the Social Security Act, the Americans with Disabilities Act of 1990, and sections 483.1 through 483.206 of 42 C.F.R.).
73. See Milligan & Wiggs, supra note 63, at B13 (stating that "[f]rom a practical standpoint . . .government use of the FCA to supervise the quality of care will be a fact of life for long-term care providers and the attorneys who represent them.").
74. See 1998 FRAUD REPORT, supra note 18.
75. Complaint ¶ 21, United States v. City of Philadelphia, 98-CV-4253 (E.D. Pa. Aug. 14, 199), available in U.S. Dep't of Justice Civil Rights Div., Special Litigation Section Home Page: Documets and Publications (last modified Oct. 28, 1999) 〈http://www.usdoj.gov/crt/split/documents/philcop.htm〉.
76. Id. ¶ 49.
77. See Settlement Agreement, City of Philadelphia, 98-CV-4253, available in U.S. Dep't ofJustice Civil Rights Div., Special Litigation Section Home Page: Documents and Publications (last modified Oct. 28, 1999) 〈http://www.usdoj.gov/crt/split/documents/philsa.htm〉.
78. See Milligan & Wiggs, supra note 63, at B12; Hallam, supra note 33, at 40.
79. See Milligan & Wiggs, supra note 63, at B12. The United States Department of Justice stated one of its "Future Challenges" as follows: Although all significant health care fraud schemes warrant the Department's attention,we will be especially cognizant of the adverse impact of some providers' fraudulentactions on the health of the patients for whom they care. The denial of medicallynecessary services, threats to the health of the nation's elderly, and the underservice ofpopulations in managed care plans will receive the Department's special attention. 1997 FRAUD REPORT, supra note 40.
80. See Lynne A. Battaglia, Press Release from the U.S. Attorney's Office for the District of Md.,June 17, 1999, availab U.S. Attorney's Office for the District of Md., Press Releases 1999 (last modified Jan. 12, 2000) 〈http://www.usdoj.gov/usao/md/press99/nursinghome.htm〉.
81. See Northern Health Facilities, Inc. v. United States, 39 F. Supp. 2d 563, 565 (D. Md. 1998).
82. See id. at 566.
83. See id.
84. See id.
85. See id.; Battaglia, supra note 76, at 1.
86. See Northern Health Facilities, 39 F. Supp. 2d at 566; Battaglia, supra note 76, at 1.
87. See Northern Health Facilities, 39 F. Supp. 2d at 566; Battaglia, supra note 76, at 1.
88. See Northern Health Facilities, 39 F. Supp. 2d at 566-67.
89. See id.
90. Id. at 567 (citing Consent Order at 19, United States v. Northern Health Facilities, Inc., No.CIV.A. AW 98-3113 (D. Md. Sept. 15, 1998)).
91. Id. (citing Consent Order at 20, United States v. Northern Health Facilities, Inc., No. CIV.A.AW 98-3113).
92. See Aussprung, supra note 18, at 3; see also Krohn, supra note 28, at 461-62 (noting that theFCA implicitly encourages settlement and that settlements are often negotiated to include a denial ofguilt and a secrecy clause because of provider concern over negative public opinion).
93. See United States ex rel. Aranda v. Community Psychiatric Ctrs., 945 F. Supp. 1485, 1489 (W.D. Okla. 1996); Huffman, supra note 27, at 155-56.
94. See Aranda, 945 F. Supp. at 1489.
95. See id. at 1488.
96. See id.
97. See id. at 1488-89.
98. See id. at 1487-88.
99. Id. at 1488 (citing 42 U.S.C. § 1320c-5).
100. See id. Other standards cited by the court were the Medicare Fraud and Abuse Statute,42 U.S.C. § 1320a-7(b)(6)(B) (allowing program exclusion for anyone furnishing patient services "o a quality which fails to meet professionally recognized standards of health care"), 42 U.S.C. § 96a(a)(30)(A) (requiring a state plan for medical assistance to specify payment for serviceprocedures sufficient "to assure that payments are consistent with . . . quality of care") and 42 C.F.R. §455.2 (defining "abuse" for the purpose of Medicaid exclusion as "provider practices that areinconsistent with sound . . . medical practices, and result in an unnecessary cost to the Medicaidprogram, or in reimbursement for services . . . that fail to meet professionally recognized standards forhealth care").
101. See Aranda, 945 F. Supp. at 1488. See generally David C. Hsia, Application of Qui Tam to the Quality of Health Care, 14 J. LEGAL MED. 301 (1993) (discussing the complexity of quality measurement in FCA qui tam actions).
102. See Aranda, 945 F. Supp. at 1488. See generally David C. Hsia, Application of Qui Tam to the Quality of Health Care, 14 J. LEGAL MED. 301 (1993) (discussing the complexity of quality measurement in FCA qui tam actions).
103. See Aranda, 945 F. Supp. at 1499.
104. See id.
105. See 1997 FRAUD REPORT, supra note 40.
106. See supra Part III.
107. While several health maintenance organizations (HMOs) have already been prosecuted underth for other fraud and abuse issues, see McGinley & Cloud, supra note 35, at A28, none have apparently yet been liable under a quality of care theory.
108. Pub. L. No. 105-33 sec. 4701, § 1932, 111 Stat. 251, 489-93 (codified as amended inscattered sections of 42 U.S.C.).
109. Coordinated care plans include HMOs, Preferred Provider Organizations, and Provider-Sponsored Organizations. See Medicare Program; Establishment of the Medicare+Choice Program, 63 Fed. Reg. 34,968, 34,968-69 (1998) (codified at 42 C.F.R. pts. 400, 403, 410, 411, 417 & 422).
110. See Health Care Fin. Admin., Medicare+Choice Part C Statutory Requirements and Regulatory Implementation (last modified July 15, 1998) 〈http://www.hcfa.gov/medicare/mplusc.htm〉.
111. See Krohn, supra note 28, at 465-66; McGinley & Cloud, supra note 35, at A28.
112. See Medicare Program; Establishment of the Medicare+Choice Program, 63 Fed. Reg. at34,969.
113. 42 C.F.R. § 422.502(a)(3)(iii) (1999).
114. A Medicare+Choice (M+C) organization is "a public or private entity organized and licensedby a State as a risk-bearing entity (with the exception of provider-sponsored organizations receivingwaivers) that is certified by HCFA as meeting the M+C contracting requirements." 42 C.F.R. § 422.2 (1999). An M+C plan refers to "health benefits coverage offered under a policy or contract by an M+Corganization that includes a specific set of health benefits offered at a uniform premium and uniformlevel of cost-sharing to all Medicare beneficiaries residing in the service of the M+C plan." Id.
115. See HCFA Will Assess Plans' History Before Medicare+Choice OK Given, PHYSICIAN MANAGER, June 19, 1998, at 3, 3, available in 1998 WL 9851466.
116. See discussion supra Parts III.A.-E.
117. See Boese, supra note 34, at 69; McGinley & Cloud, supra note 35, at A28 (quoting James Sheehan, Assistant U.S. Attorney in Philadelphia, as stating: "When you pay organizations the same amount of money whether or not they provide medically necessary services, there is always the temptation for fraud.").
118. See United States v. Krizek, 111 F.3d 934, 939 (D.C. Cir. 1997).
119. Form HCFA-1500 is used by non-institutional providers for fee-for-service reimbursementunder Medicare Part B. Health Care Fin. Admin., Health Insurance Claim Form, Form HCFA-1500 (12-90), Form RRB-1500, Form OWCP-1500.
120. See Krizek, 111 F.3d at 939-40.
121. Id. at 939.
122. See id. at 939-40 (stating that "The question turns, not on how the government chooses toprocess the claim, but on how many times the defendants made a 'request or demand.'").
123. _ F. Supp. 2d _ , No. 92 CiV. 2754(CM), 1999 WL 1066863 (S.D.N.Y. Nov. 18, 1999).
124. Id. at *7.
125. See id. at *7-*9.
126. See Health Care Fin. Admin., Operational Policy Letter # 89; Subject: Contract Year 2000 Medicare+Choice Instructions 3-5, 11-13, 18-23 (Apr. 23, 1999).
127. See id.
128. Nat'l Unif. Billing Comm., UB-92 HCFA-1450; Form HCFA-1500, supra note 112.
129. 914 F. Supp. 1507 (M.D. Tenn. 1996).
130. See Pogue, 914 F. Supp. at 1509-10.
131. See id.
132. Id. at 1511.
133. 125 F.3d 899 (5th Cir. 1997).
134. See id. at 902-03.
135. See id.
136. See United States ex rel. Thomson v. Columbia/HCA Healthcare Corp., 20 F. Supp. 2d 107, 1046-48 (S.D. Tex. 1998).
137. Id. at 1042.
138. See Thomson, 125 F.3d at 903; United States ex rel. Mikes v. Straus, _ F. Supp. 2d _, No. 92 CIV. 2754(CM), 1999 WL 1066863, at *7-*9 (S.D.N.Y. Nov. 18, 1999). For a more complte analysis of the ant kback cases, see generally Kikkawa, supra note 30.
139. 67 F. Supp. 2d 637 (S.D. Miss. 1999).
140. See id. at 637.
141. See id. at 640.
142. See id.
143. Id. at 641.
144. See id. at 642.
145. See id.
146. See id.
147. See id.
148. See id. at 645.
149. See discussion supra Part I.
150. See Intervest Corp., 67 F. Supp. 2d at 647.
151. 176 F.3d 776, 785 (4th Cir. 1999).
152. Intervest Corp., 67 F. Supp. 2d at 646.
153. See id. at 647.
154. See id. at 647-48.
155. See id. at 648.
156. See id.
157. See supra Part III.D.
158. See Northern Health Facilities, Inc. v. United States, 39 F. Supp. 2d 563, 565-66 (. Md. 1998).
159. Id. at 566.
160. Presumably, state regulator complacency might also foil an FCA challenge in the case of fraudulent Medicaid certifications.
161. See, e.g., Fraud and Abuse: PA Facility to Pay $195,000 to Settle Quality of Care False Claims Issues, 4 Health Care Daily Rep. (BNA) 3, 3-4 (May 21, 1999) (discussing the 1999 settlemnt of Integrated Health Services (IHS) at Penn Inc., a for-profit company operating IHS of Bryn Mawrat the Chateau, a skilled nursing facility in Bryn Mawr, Pennsylvania, accused of poor quality of car). The IHS allegations were similar to those of the other nursing home quality of care cases, alleging tat residents suffered from incontinence and bed sores. See id. HCFA fined IHS for similar violationsin 1996, but IHS had maintained a clean record since then. See id.
162. See U.S. SENTENCING COMM., GUIDELINES MANUAL, § .2, cmt. 3(k) (Nov. 198) (defining "effective program to prevent and detect violations of law").
163. See id. § 8C2.5.
164. Aussprung, supra note 18, at 50-51.
165. Publication of the OIG Compliance Program Guidance for Clinical Laboratories, 62 Fed. Reg. 9,435 (1997).
166. See id.
167. Publication of the OIG Compliance Program Guidance for Hospitals, 63 Fed. Reg. 8,987 (1998).
168. Publication of the OIG Compliance Program Guidance for Home Health Agencies, 63 Fed.Reg. 42,410 (1998).
169. Publication of the OIG Compliance Program Guidance for Third-Party Medical Billing Companies, 63 Fed. Reg. 70,138 (1998).
170. Publication of the OIG Compliance Program Guidance for the Durable Medical Equipment, Prosthetics, Orthotics and Supply Industry, 64 Fed. Reg. 36,368 (1999).
171. Publication of the OIG Compliance Program Guidance for Hospices, 64 Fed. Reg. 54,031 (1999).
172. Publication of the OIG's Compliance Program Guidance for Medicare+Choice Organizations Offering Coordinated Care Plans, 64 Fed. Reg. 61,893 (1999).
173. Publication of the OIG Compliance Program Guidance for Clinical Laboratories, 63 Fed. Reg. 45,076 (1998).
174. Draft OIG Compliance Program Guidance for Nursing Facilities, 64 Fed. Reg. 58,419 (1999).
175. Solicitation of Information and Recommendations for Developing OIG Compliance Program Guidance for Individual icians and Small Group Practices, 64 Fed. Reg. 48,846 (1999).
176. Publication of the OIG's Compliance Program Guidance for Medicare+Choice Organizations Offering Coordinated Care Plans, 64 Fed. Reg. at 61,893.
177. See id. at 61,897. The other identified risk areas are: marketing materials and personnel,selective marketing and enrollment, disenrollment, data collection and submission processes, anti-kickback statute and other inducements, and emergency services. See id.
178. Id. at 61,899.
179. See id. at 61,907.
180. See id.
181. See Holder Memorandum, supra note 21.
182. Id.
183. Deputy Attorney General Eric H. Holder, Jr., Remarks to the American Hospital Association (Feb. 1, 1999), available in U.S. Department of Justice, Deputy Attorney General Speech (last modified Feb. 08, 1999) 〈http://www.usdoj.gov/dag/speech/holderahaspeech.htm〉.
184. See Holder Memorandum, supra note 21.
185. Id.
186. See Memorandum from June Gibbs Brown, Department of Health and Human Services Inspector General, to the Deputy Inspector General for Investigations, the Deputy Inspector General for Audit Services, and the Assistant Inspector General for Legal Affairs (June 3, 1998) [hereinafter Brown Memorandum]. The Holder and Brown memoranda were initially circulated in response to the Health Care Claims Guidance Act (HCCGA) introduced in both houses during the second session of the 105th Congress. See S. 2007, 105th Cong. (1998); H.R. 3523, 105th Cong. (1998). The HCCGA uld have severely limited recovery for health care fraud under the FCA. See id. At the end of the 105th term, both bills had been referred to subcommittees where they subsequently died. See Bill Summary & Status for the 105th Congress (last modified Jan. 18, 2000) 〈http://thomas.loc.gov/bss/d105query.html〉. The HCCGA included proposals to limit recovery under the FCA with respect to federally funded health care programs. See S. 2007; H.R. 3523. The hearingsin the House Subcommittee on Immigration and Claims elicited significant debate over the need for astrong FCA with which to fight health care fraud. See generally Oversight Hearing on Health Care Initiatives Under the False Claims Act that Impact Hospitals: Hearings on H.R. 3523 Before the Subcomm. on Immigration and Claims of the House Judiciary Comm., 105th Cong. (1998) [her ter Hearings] (documenting the statements of several health industry and DOJ speakers on the prudence of amending the FCA to weaken it as applied to health care). The HCCGA would have limited the FCA to circumstances where alleged damages were of a "material amount." See S. 2007; H.R. 3523. Moreover, the HCCGA would have denied recovery if a defendant relied on "written statements of Federal policy" or if an action sought to recover for "claims submitted by persons in substantial compliance with a model compliance plan." S. 2007; H.R. 3523. Finally, the HCCGA would have raised the standard of proof required in an FCA health care claim to "clear and convincing evidence." S. 2007; H.R. 3523. During hearings before the House Judiciary Committee Subcommittee on Immigration and Claims, one speaker suggested that the HCCGA would make relators less likely tobring suits for quality of care problems, as the quality of care rendered to one health care consumermay well not amount to a "material amount" required to bring suit. See Hearings (testimony of Lewis Morris, Assistant Inspector General for Legal Affairs, HHS) (arguing that the materiality requirementwould effectively result in "free for fraud zones"). The practical effect of the guidance set forth in the Holder and Brown memoranda was to appease the HCCGA's proponents and put that bill to rest.
187. See Memorandum from June Gibbs Brown, Department of Health and Human Services Inspector General, to the Deputy Inspector General for Investigations, the Deputy Inspector General for Audit Services, and the Assistant Inspector General for Legal Affairs (June 3, 1998) [hereinafter Brown Memorandum]. The Holder and Brown memoranda were initially circulated in response to the Health Care Claims Guidance Act (HCCGA) introduced in both houses during the second session of the 105th Congress. See S. 2007, 105th Cong. (1998); H.R. 3523, 105th Cong. (1998). The HCCGA uld have severely limited recovery for health care fraud under the FCA. See id. At the end of the 105th term, both bills had been referred to subcommittees where they subsequently died. See Bill Summary & Status for the 105th Congress (last modified Jan. 18, 2000) 〈http://thomas.loc.gov/bss/d105query.html〉. The HCCGA included proposals to limit recovery under the FCA with respect to federally funded health care programs. See S. 2007; H.R. 3523. The hearingsin the House Subcommittee on Immigration and Claims elicited significant debate over the need for astrong FCA with which to fight health care fraud. See generally Oversight Hearing on Health Care Initiatives Under the False Claims Act that Impact Hospitals: Hearings on H.R. 3523 Before the Subcomm. on Immigration and Claims of the House Judiciary Comm., 105th Cong. (1998) [her ter Hearings] (documenting the statements of several health industry and DOJ speakers on the prudence of amending the FCA to weaken it as applied to health care). The HCCGA would have limited the FCA to circumstances where alleged damages were of a "material amount." See S. 2007; H.R. 3523. Moreover, the HCCGA would have denied recovery if a defendant relied on "written statements of Federal policy" or if an action sought to recover for "claims submitted by persons in substantial compliance with a model compliance plan." S. 2007; H.R. 3523. Finally, the HCCGA would have raised the standard of proof required in an FCA health care claim to "clear and convincing evidence." S. 2007; H.R. 3523. During hearings before the House Judiciary Committee Subcommittee on Immigration and Claims, one speaker suggested that the HCCGA would make relators less likely tobring suits for quality of care problems, as the quality of care rendered to one health care consumermay well not amount to a "material amount" required to bring suit. See Hearings (testimony of Lewis Morris, Assistant Inspector General for Legal Affairs, HHS) (arguing that the materiality requirementwould effectively result in "free for fraud zones"). The practical effect of the guidance set forth in the Holder and Brown memoranda was to appease the HCCGA's proponents and put that bill to rest.
188. See Brown Memorandum, supra note 180, at 46.
189. Id.
190. Id. at 47.
191. See Kikkawa, supra note 30, at 122.
192. See 31 U.S.C.A. § 3730(e)(3) (West 1999).
193. See id. § 3730(e)(4).
194. See Holder Memorandum, supra note 21 (citing factors to consider in determining whether a false claim was knowingly submitted, including: "a. Notice to the Provider . . . b. The Clarity of the Rule or Policy . . . c. The Pervasiveness and Magnitude of the False Claims . . . d. Compliance Plansand Other Steps to Comply with Billing Rates . . . e. Past Remedial Efforts . . . f. Guidance by the Program Agency or its Agents"); Brown Memorandum, supra note 180, at 47 (stating "[t]he OIG supports the equitable treatment of providers in national projects. . . . [C]ompliance or corporateintegrity provisions should be uniform and consistently applied.").