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Cover Story: Global Med Device Investigation Highlights

Importance of Managing Risk Alongside Innovation Part 1

Continued from page 1 bility under the FCA, potentially open- BDO’s Diagnosis • Finally, the Court’s ruling made the
reveals, balancing much-needed care ing up healthcare providers to new com- While Arbour indeed provided the definition of a false claim much wider.
innovation with risk management is cru- pliance risk—and providing openings for health services it submitted a claim for— Providers will likely see an increase in
cial to patient safety. whistleblowers. The theory treats a in this case, mental health treatment— fraud investigations, and an expansion of
Key findings of the series include: Medicaid payment request as an “implied the ruling determined that it defrauded the scope of allowable discovery in FCA
• Products with little to no human certification of compliance” with perti- the government by knowingly misrepre- cases beyond misrepresentations of
testing have been allowed on the market nent statutes, regulations or contract senting the quality of that care. expressly labeled conditions of payment.
around the world and have caused harm requirements “material” to conditions of The Court’s FCA decision has outsized To argue for or against materiality will
to consumers. payment, the Court explained in its implications for compliance in health- require a deeper look at past precedent
• Some devices pulled off the market opinion. Significantly, the Court defined care, an industry with considerable risk and may include any evidence of defi-
because of safety concerns in certain material broadly, as “having a natural and in many cases, systemically ineffi- ciencies in regulatory guidance or stan-
countries have remained for sale in oth- tendency to influence, or be capable of cient. dards of practice that would have
ers. influencing, the payment or receipt of • First, as reimbursement methods are impacted the government’s decision to
• In reports to U.S. regulators over the money or property.” overhauled to tie more payments to qual- pay the claim. The heavier discovery bur-
last 10 years, manufacturers, doctors and • The ruling settled the case of ity of care, income for providers will den will force stragglers to get on board
others said medical devices were poten- Universal Health Services, Inc. (UHS) v. depend on value-based outcomes that with advanced technologies, such as data
tially linked to nearly 2 million injuries United States ex rel. Escobar. At the cen- they’ll have to validate. Providers will analytics and visualization or technology
and more than 80,000 deaths. ter of the case, a UHS subsidiary, Arbour have to demonstrate, explicitly or implic- assisted review, to gather and compre-
The investigation highlights the need Health Services, provided mental health itly, evidence that their treatment is com- hend the entire universe of relevant evi-
for greater clinical due diligence and bet- services to the Escobars’ daughter, a pliant with clinical protocols—a difficult dence efficiently and effectively.
ter information-sharing between teenager who died after suffering a feat in an industry in the midst of re-
providers and patients, as well as among seizure in reaction to medication Arbour defining standards of care, often across Venson Wallin, CPA, is Managing Director
regulatory bodies across borders. prescribed. Under the FCA, the Escobars multiple collaborating providers. and National Healthcare Compliance and
The heightened focus on value-based filed a whistleblower suit, known as qui Providers will be held accountable for Regulatory Leader at BDO Consulting, LLC
outcomes versus fee-for-service and tam, against Arbour, alleging that it had their partners’ protocols and standards of
growing cybersecurity concerns, mean- defrauded the government by a lie of care, too. This shift to quality over quan- Learn more about how to manage com-
while, add other dimensions: increased omission: failing to disclose that few of tity of care, whereby providers can now pliance and regulatory risk while keeping up
risk around the False Claims Act (FCA) their employees were even licensed to be held liable for non-compliance with with innovation.
and cybersecurity, as we’ve written in provide mental health counseling, to pre- regulations inexplicit in terms of pay-
previous articles: scribe medications or to offer counseling ment, exposes them to significant penal- Contact:
without supervision. ties under the FCA. Alfredo Cepero, Managing Partner
1. Could Supreme Court Ruling • Arbour’s non-compliance with state • Second, while the Court defined 305-420-8006/ acepero@bdo.com
on the False Claims Act Provide credential requirements, the Court material in multiple ways, it still left
Whistleblowers a Wider Net? explained, was “so central to the provi- much room for interpretation. Courts Angelo Pirozzi, Partner
sion of mental health counseling that the will have to decide whose definition of 646-520-2870 / apirozzi@bdo.com
Key Takeaways: Medicaid program would have refused to material is correct: the defendant’s or the
• In a unanimous decision, the pay these claims had it known of these plaintiff’s. Depending on individual out- PART 2:
Supreme Court on June 16 upheld the violations.” comes, the decision could prove costly COMING IN APRIL 2019
“implied false certification” theory of lia- for providers.

MAKINGROUNDS…MAKINGROUNDS…MAKINGROUNDS…

Experienced Rheumatologist Cleveland Clinic Indian River

Joins Cleveland Clinic Hospital Announces New

Indian River Hospital Chief Medical Officer

Cleveland Clinic Indian River Hospital welcomes Cleveland Clinic Indian River Hospital is pleased to
expert rheumatologist, Alastair Kennedy, M.D., FRCP, announce that David J. Peter, MD, MBA, FACEP, will
FACP, PA. Dr. Kennedy earned his medical degree at join the leadership team as Chief Medical Officer.
the University of Glasgow in Scotland and has held Dr. Peter started at Akron General Hospital in 1994,
positions in pediatrics, obstetrics, and rheumatology handling documentation and reimbursement for
before making his way to Vero Beach, where he has General Emergency Medical Specialists. He went on to
practiced for more than 30 years. serve as vice president for GEMS; Associate Medical
Dr. Kennedy has presented at symposiums around Director of Hospice; Chief Medical Officer for
the world and is well-published in the area of rheuma- Research; Chief Medical Information Officer; Chief
toid diseases. He has articles printed in the American Medical Officer for Care Management and Clinical
College of Rheumatology, Annals of the Rheumatic Resources; and beginning in 2012 in his current posi-
Diseases and The American Journal of the Medical Dr. Alastair Kennedy tion as Senior Vice President and Chief Medical Officer Dr. David J. Peter
Sciences. for Cleveland Clinic Akron General Hospital.
Board certified in Internal Medicine and Rheumatology, Dr. Kennedy is a Dr. Peter received his medical degree from the University of Cincinnati
member of the Indian River Medical Society, Florida Medical Association, Medical College, earning Alpha Omega Alpha honors, and completed his emer-
American College of Rheumatology, and the American College of Physicians. He gency medicine residency at the University of Cincinnati. He earned his MBA
is a fellow of the Royal College of Physicians in Glasgow and Edinburgh and cur- from the University of Massachusetts Amherst, Isenberg School of Management,
rently serves on the regional board of FSU Medical School. and a bachelor’s degree in Biology from Thomas More College.

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40 March 2019 southfloridahospitalnews.com South Florida Hospital News