Appreciating Informed Consent in the Context of False Claims Act Liability.
Rachel V. Rose, JD, MBA[A]
August 16, 2024
Overview
A recent settlement by the U.S. Department of Justice (DOJ) in a False Claims Act (FCA) case underscores the importance of adequate informed consent for a variety of reasons. First, it is mandated by federal law. Second, with the increased number of elderly patients (and sometimes non-elderly) being diagnosed with dementia and Alzheimer’s – the most common form of dementia – decision making capacity, which is the first step before a patient can provide informed consent, must be ascertained. Lastly, not ascertaining informed consent can lead to FCA liability.
This article aims to provide a short synopsis of informed consent and explain how it can be the basis of FCA liability. As with most aspects of healthcare, the key is to have an adequate compliance program to mitigate liability risk.
Decision Making Capacity and Informed Consent
First is first. The American Medical Association’s Code of Medical Ethics Opinion 2.1.1 – Informed Consent states, “[p]atients have the right to receive information and ask questions about recommended treatments so that they can make well-considered decisions about care.”[B] To make decisions and provide legally binding informed consent, a patient must, as the initial step, have decision making capacity. Capacity is distinct from competency[C] and in the context of healthcare decision making, it can only be determined by a physician. Four criteria are utilized to determine decision making capacity: (1) understanding; (2) appreciation; (3) reasoning; and (4) communication of choice.[D] Instances where an individual may not have decision making capacity include the following: an unemancipated minor, unconscious (including anesthesia), and particular medical condition (e.g., ALS, Alzheimer’s, traumatic brain injury). If an individual does not have decision making capacity, even if it is an acute event such as being unconscious, then a surrogate decision maker steps into the shoes of the patient, which requires that individual, which may be anyone from a treating physician to a person designated in a legal document or by statute, to put the patient’s wishes and best interests first.[E]
“Medicare is generally required… (for services covered under Part A … [and] for services covered under Part B) to pay for services furnished by providers on the basis of reasonable costs … 42 C.F.R. § 413.1 (2014)” There are of course requirements that need to be met. For example, Medicare Conditions of Participation: Medical record services require that a patient’s medical record include “[p]roperly executed informed consent forms for procedures and treatments specified by the medical staff, or by Federal or State law if applicable, to require written patient consent.” 42 C.F.R. § 482.24(c)(4)(v) (2012). Subsequently, the Centers for Medicare and Medicaid Services (“CMS”) interpreted this regulation in the CMS State Operations Manual, App’x A – Survey Protocol, Regulations and Interpretive Guidelines for Hospitals, A-0466, Interpretive Guidelines §482.24(c)(4)(v), p. 289 (2018) (Rev. 95, effective Jun. 7, 2013) to mean “[a]n informed consent form, in order to be properly executed, must be consistent with hospital policies as well as applicable State and Federal law or regulation.” (emphasis added).[F] Complying with these requirements is material to the United States and individual States. In turn, non-compliance may lead to the submission of false and fraudulent claims, which are actionable under the FCA.
United States ex rel. Jeffrey A. Morgan v. Baylor St. Luke’s Medical Center, et al.
On June 24, 2024, the DOJ announced a $15 million settlement in United States ex rel. Jeffrey A. Morgan v. Baylor St. Luke’s Medical Center, et al., Case No. 4:19-cv-02925 (S.D. Tex.), “to resolve claims they billed for concurrent heart surgeries in violation of Medicare teaching physician and informed consent regulations.”[G] Here, cardiac surgeons double-booked rooms and then subsequently attested that they were present during the entire procedure. Being in two places at once is a feat that no one has quite mastered. Additionally, these surgeons’ compensation far exceeded that of their colleagues in the Houston area.
Four paragraphs in particular from the Second Amended Complaint are notable. First, paragraph 15:
All Defendants benefited financially from the scheme. By scheduling overlapping surgeries, the hospital increased its revenues between 2013 and 2019 by about $150 million from just these three surgeons’ cases alone. The surgeons, meanwhile, enjoyed compensation packages some four times higher than the average for their specialty in Houston, Texas, reaching over $2 million each per year. As the Hospital Chief Surgeon and Medical School Chief of Surgery acknowledged: ‘Cardiac surgery is the financial engine of the Hospital.’ In short, the teaching physicians churned through as many cardiac surgeries as possible to generate revenue for Baylor, regulations be damned, and were rewarded with lavish compensation. The scheme could not have been carried out for so long without the concerted conspiracy of all Defendants to defraud the Government.
Second, paragraphs 84-86:
To make matters worse, it is not standard practice at Baylor to obtain adequate informed consent for their overlapping surgery practice.
The Baylor forms used by the surgeons typically only provide the name of the attending physician as the person who will be doing the operation. That is, none of the patients operated on were told that a resident or fellow would be operating on them without a certified surgeon in the room or that the patient’s doctor of choice would be multitasking between several other surgeries at the same time as theirs.
By using an informed consent form that never mentioned the possibility of overlapping surgeries, Baylor generated false medical records and thereby misled both patients and the Government. There was the appearance that patients consented to surgeries, yet there was a critical omission: disclosure that the patient’s primary surgeon of choice would not be in the operating room during the entire procedure or would be scrubbed into another overlapped case. Just like with the false attestations, this would prevent Government Payors from discovering the overlapping surgery practice with regard to cases for which Baylor sought Medicare reimbursements – including Part A – or verifying that those overlapped procedures had been done consistent with Medicare billing regulations.
Whether a patient is able to provide informed consent or needs a surrogate decisionmaker to step in and make the decision, the Government is showing that these types of informed consent forms are inadequate, that disclosing overlapping surgeries, and whether or not physicians who are not fully trained in a specialty are performing the procedures without the requisite oversight, and having the attending physician attest in a variety of different records that he/she was present during the surgery for the entire time or that the time the person was in the room was in accordance with the regulations is material to payment.
Conclusion
As often said in medicine – “an ounce of prevention is worth a pound of cure.” Physicians, hospitals, and other providers alike can learn from the aforementioned case and settlement. Here, “prevention” is reviewing existing compliance programs, making sure that they comply with 42 CFR § 483.85, conducting an internal audit, and/or hiring an external auditor to do a randomized statistical sample to ensure that claims are clean and if they are not, self-report the overpayments and change practices moving forward, and updating training and informed consent forms. While this list is not exhaustive, beginning with the requirements set forth in 42 CFR §483.85 – compliance and ethics program and adding the areas of potential liability raised in the aforementioned case can mitigate legal, financial, and reputational risk.
About Ms. Rachel Rose:
[A] Rachel V. Rose, JD, MBA, successfully advises clients on compliance, transactions, government administrative actions, and litigation involving healthcare, cybersecurity, corporate and securities law, as well as False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, www.rvrose.com.
[B] AMA, Code of Medical Ethics Opinion 2.1.1 – Informed Consent, https://www.ama-assn.org/delivering-care/ethics/informed-consent (last visited Jun. 15, 2024).
[C] Legal Information Institute, competent, https://www.law.cornell.edu/wex/competent (last visited Jun. 27, 2024).
[D] B. W. Palmer, et al., Assessment of Healthcare Decision-making Capacity, Arch Clin Neuropsychol, 2016 Sep; 31 (6): 530-540 (citing Grisso & Appelbaum, 1998a; Roth, Meisel, & Lidz, 1977), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5007079/#:~:text=Capacity%20for%20healthcare%20is%20generally,%2C%20%26%20Lidz%2C%201977).
[E] M. Arias, Recent Updates to Default Surrogate Statutes, Bifocal Vol. 44, Issue 3 (Jan. 2023), https://www.americanbar.org/groups/law_aging/publications/bifocal/vol44/bifocal-vol-44-issue3/recent-updates-to-default-surrogate-statutes/.
[F] R.V. Rose, The intersection between Informed Consent, EMTALA, and the False Claims Act (Jul. 9, 2020), https://www.physicianspractice.com/view/the-intersection-of-informed-consent-emtala-and-the-false-claims-act.
[G] DOJ, Texas medical center institutions agree to pay $15M record settlement involving concurrent billing claims for critical surgeries (Jun. 24, 2024), https://www.justice.gov/usao-sdtx/pr/texas-medical-center-institutions-agree-pay-15m-record-settlement-involving-concurrent.
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