Here are nine things to know about a recent false claims settlement involving an ambulatory surgery center company.
1. National outpatient ambulatory surgery center operator Meridian Surgical Partners settled a qui tam lawsuit brought by a former employee at one of its centers. Trial was set to begin in this case on September 23, 2014.
2. "There are four or five legal issues that provide surgery center operators with the most reason for concern given the legal background facing surgery centers," says Scott Becker, JD, chairman of the healthcare department at McGuireWoods and publisher of Becker's Healthcare. "These generally include the way in which shares are sold to physicians; the way in which physicians are redeemed; the structure of anesthesia and pathology agreements; and the enforcement of non-competes. This settlement is instructive because the complaint touches on two of these key issues: the way in which shares are sold and how doctors are redeemed."
3. The case relates to the purchase price physicians were offered at an ASC. The lawsuit, filed in 2011, related to Meridian's purchase of a majority interest in Treasure Coast Surgery Center in Stuart, Fla., and its subsequent sale of minority interests in the center to physicians.
4. The government didn't join the lawsuit. "We are pleased the government declined to intervene in this lawsuit and we are pleased to have the lingering litigation with the relator behind us and have our sights on a variety of strategic opportunities for our growing company," says Meridian Surgical Partners includes CEO John C. Wilson Jr.
When the government doesn't join a qui tam action, it is harder for the relator to generally gain big victories. It can also signal that the government doesn't perceive there was serious or any wrong doing.
5. Qui tam cases are becoming more common. In a qui tam lawsuit, a plaintiff brings an action alleging misuse of government funds, in this case Medicare funds. The U.S. Department of Justice then reviews the merits of the allegations and decides whether to join the lawsuit. If the government declines to join the suit, as it did in this case in 2012, the plaintiff can still proceed. If there is a settlement, the proceeds are awarded to the government and the plaintiff then receives a percentage of those proceeds. The PPACA made it much easier to bring a qui tam suit.
6. This case is particularly interesting to ASCs as:
A. ASCs can often take additional precautions to lessen their risk of such a suit, or at least a successful suit. ASCs should seriously consider more extensive compliance efforts, particularly as related to key legal issues.
B. The case touches on very common issues in the ASC industry.
C. The ASC industry is hardly ever attacked in this way as the government and others understand ASCs are huge cost-savers for Medicare.
7. Meridian Surgical Partners paid $3.8 million to settle the case and $1.8 million in attorneys fees. (OIG Report: ASCs Save Medicare, Beneficiaries Billions).
8. Meridian Surgical Partners did not admit any wrongdoing. "While the allegations in the lawsuit were completely without merit, we chose to settle this action to avoid the financial costs and distractions that would have come with further legal proceedings," said John Wilson, CEO of Meridian. Defending a false claims suit can be very expensive, i.e., millions of dollars, says Mr. Becker.
9. The management team at Meridian Surgical Partners is well respected in the ASC industry. Leadership includes CEO John C. Wilson Jr., President and Chief Development Officer Kenneth N. Hancock, Executive Vice President and COO Catherine W. Kowalski and Executive Vice President and CFO Jim Uden. "The company is run by people held in very high regard in the ASC industry," says Mr. Becker.
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1. National outpatient ambulatory surgery center operator Meridian Surgical Partners settled a qui tam lawsuit brought by a former employee at one of its centers. Trial was set to begin in this case on September 23, 2014.
2. "There are four or five legal issues that provide surgery center operators with the most reason for concern given the legal background facing surgery centers," says Scott Becker, JD, chairman of the healthcare department at McGuireWoods and publisher of Becker's Healthcare. "These generally include the way in which shares are sold to physicians; the way in which physicians are redeemed; the structure of anesthesia and pathology agreements; and the enforcement of non-competes. This settlement is instructive because the complaint touches on two of these key issues: the way in which shares are sold and how doctors are redeemed."
3. The case relates to the purchase price physicians were offered at an ASC. The lawsuit, filed in 2011, related to Meridian's purchase of a majority interest in Treasure Coast Surgery Center in Stuart, Fla., and its subsequent sale of minority interests in the center to physicians.
4. The government didn't join the lawsuit. "We are pleased the government declined to intervene in this lawsuit and we are pleased to have the lingering litigation with the relator behind us and have our sights on a variety of strategic opportunities for our growing company," says Meridian Surgical Partners includes CEO John C. Wilson Jr.
When the government doesn't join a qui tam action, it is harder for the relator to generally gain big victories. It can also signal that the government doesn't perceive there was serious or any wrong doing.
5. Qui tam cases are becoming more common. In a qui tam lawsuit, a plaintiff brings an action alleging misuse of government funds, in this case Medicare funds. The U.S. Department of Justice then reviews the merits of the allegations and decides whether to join the lawsuit. If the government declines to join the suit, as it did in this case in 2012, the plaintiff can still proceed. If there is a settlement, the proceeds are awarded to the government and the plaintiff then receives a percentage of those proceeds. The PPACA made it much easier to bring a qui tam suit.
6. This case is particularly interesting to ASCs as:
A. ASCs can often take additional precautions to lessen their risk of such a suit, or at least a successful suit. ASCs should seriously consider more extensive compliance efforts, particularly as related to key legal issues.
B. The case touches on very common issues in the ASC industry.
C. The ASC industry is hardly ever attacked in this way as the government and others understand ASCs are huge cost-savers for Medicare.
7. Meridian Surgical Partners paid $3.8 million to settle the case and $1.8 million in attorneys fees. (OIG Report: ASCs Save Medicare, Beneficiaries Billions).
8. Meridian Surgical Partners did not admit any wrongdoing. "While the allegations in the lawsuit were completely without merit, we chose to settle this action to avoid the financial costs and distractions that would have come with further legal proceedings," said John Wilson, CEO of Meridian. Defending a false claims suit can be very expensive, i.e., millions of dollars, says Mr. Becker.
9. The management team at Meridian Surgical Partners is well respected in the ASC industry. Leadership includes CEO John C. Wilson Jr., President and Chief Development Officer Kenneth N. Hancock, Executive Vice President and COO Catherine W. Kowalski and Executive Vice President and CFO Jim Uden. "The company is run by people held in very high regard in the ASC industry," says Mr. Becker.
More articles on surgery centers:
Rising stars: 47 ASC leaders under 40
Are your ASC's medical records vulnerable? How to Avoid a Community Health Systems-style hack
Are bundled payments worth it? An ASC case study