This is part one of a two part series covering the community forum held by the Cavalier County Memorial Hospital.
On Wednesday, January 10, at 7:00 a.m., community members eagerly awaited for some answers regarding the status of the Cavalier County Memorial Hospital (CCMH). The community was well represented with about 150 members in attendance.
By Lisa Nowatzki
Standing by ready to answer any and all questions at the community forum meeting in the Langdon High School Gym, were the administrative team and the Board of Trustees of CCMH along with Joseph Wolfe of Hall, Render, Killian, Heath & Lyman Law Firm.
According to the hospital Facebook page, the purpose of the community forum was to discuss “the events that occurred between 2010-2016 that led to an Office of Inspector General (OIG) fine of $750,000.”
Chief Executive Officer (CEO) Chris Wyatt started off the meeting with several key statements. First, and very important to Wyatt was to address the ‘who’ question. Wyatt said, “It is not our goal to assume blame on any individuals.”
Next, the hospital CEO addressed the ‘hit-and-run style’ interview conducted by a Grand Forks news station that resulted in a short but sensational headline and video clip that ran on January 9.
“This was not an interview planned by the hospital or its affiliates. And it was going to run with or without comment from the hospital,” Wyatt explained. He goes on to say that the station condensed an hour-long interview down to a few sound bites and sensational headlines.
Wyatt said that while addressing some of the hospital’s issues, the news clip was not approved or condoned by the hospital or the hospital’s representatives.
Wyatt then turned the meeting over to the Dawn Roppel, President of the Board of Directors. Roppel expressed her desire for transparency between the hospital and the community. Roppel also discussed the events prior to Wyatt’s arrival as CEO.
The identification of the substantial problems facing CCMH occurred during the application for the Helmsley Charitable Trust in October of 2015. The financial concerns were identified by then interim CEO, Jamie Nienhuis. She raised her concerns regarding the provider’s pay practices to the Board of Directors, who then met to discuss the identified problems but failed to act on the provider overpayments.
Not everyone on the board agreed, but the prevailing thought was that the hospital had to pay the providers an exorbant amout to retain their services and no action was taken to ammend the provider contracts.
This problem was then presented to Wyatt when he came on as the CEO in January 2016. In light of the provider overpayments, Wyatt examined the financial records and identified new problems and potential legal violations other than the ones identified by Nienhuis.
In light of the new issues, Wyatt suggested that the hospital hire an attorney that specializes in hospitals and healthcare. At that time the hospital retained Wolfe and his legal team to advise the hospital in the legal matters that developed from the financial inconsistencies first identified by Nienhuis and Wyatt.
Roppel went on to say that through the efforts of Wyatt, Wolfe, and other team members, Cavalier County Memorial Hospital was able to keep its doors open and provide quality medical care to the community.
Roppel then turned the meeting over to Wolfe who provided legal background for the hospital’s legal violations and then he discussed the timeline related to the incidents that lead up to the hospital paying a $750,000 fine.
Wolfe’s “big message” to the community was that the proceedings over the last year and a half “was intended to be handled professionally and in a way that we thought that would be transparent to the government and to help you get to a resolution that would be much better than we would be facing at the beginning.”
Wolfe also stressed that he did not represent the board members or their interests. He represented the hospital in this matter. He stated that his goal was to get the hospital through this situation with the lowest possible fine.
Wolfe explained the laws that the hospital violated and listed the potential violation fees. The two laws that played a significant role in the hefty fine paid by the hospital were the Anti-Kickback Statute and the Stark Law.
According to the Health Care Fraud Prevention and Enforcement website, the Anti-Kickback Statute makes it illegal for all types of healthcare providers to intentionally and consciously take bribes in any form when they are a part of any federal health care program like Medicare.
The website also explains that the Stark Law makes it illegal for a physicians to refer Medicare patients to any entity with which the physician has financial relationship and it prohibits those entities from submitting claims to Medicare for those illegal and prohibited referrals.
Those two laws were violated because the laws require medical entities to pay medical providers a rate that is considered ‘fair market value’ for the services provided.
Wolfe went on to explain that “physicians and providers make referrals all the time but hospitals can’t pay for them. The hospital can only pay for the work of the physician. Anytime compensation exceeds fair market value, the government assumes that you are paying for those tests and referrals.” Additionally, the government assumes that the overpayment is a kickback for all of the tests and inpatient referrals.
Wolfe also said that all the compensation received by the provider and the hospital from the illegal referrals and payments are considered fines that get added to the violation. Additionally, under the False Claims Act, “those who submit fraudulent claims to the government are subject to a civil penalty for each claim. In addition to these civil penalties, the government is entitled to recover triple the damages.”
The total penalties that the government could have fined CCMH that resulted from the physician over-compensation and related charges, amounted to an excess of 30 million dollars. Through voluntary disclosure to the Office of Inspector General, Wyatt, Wolfe, and the hospital board negotiated the fine down to $750,000, by proving that a more hefty fine would ensure the hospital’s insolvency and closure.