Clarifying professional practice - Viewpoint - the Healthcare Financial Management Assn's 'amicus curiae' brief - Column

Healthcare Financial Management, Nov, 1999 by Richard L. Clarke

On August 30th, 1999, HFMA submitted an amicus curiae or "friend of the court" brief to the United States District Court for the Middle District of Florida, Tampa Division, regarding the much-publicized whistle-blower lawsuit brought against Quorum Health Group. The suit accuses Quorum of making unallowable or inflated claims on their annual Medicare costs reports. HFMA's reason for filing the brief was because a commonly accepted accounting practice was under attack and all healthcare organizations could be at risk if the court accepted the assertions of the whistle-blower and the government.

Of the many aspects of the Quorum suit, HFMA is concerned with the question of whether providers are required to submit automatically the work papers and calculations of reserve cost reports with their annual cost report. The whistle-blower, joined by the government, argues that a cost report is incomplete - and thus false - if this material is not included automatically. HFMA contends that current law does not support this argument.

When the plaintiff's argument was first heard, HFMA's National leadership carefully reviewed the issues and agreed that a commonly accepted professional practice was, indeed, being called into question. Nevertheless, we still debated the pros and cons of becoming involved in the lawsuit. We sought guidance from our legal counsel to make sure that we were considering all of the risks associated with our potential involvement. In the end, we agreed that HFMA should provide unbiased technical information to the court and submit a "friend of the court" brief.

The decision to enter the fray was not made lightly, especially because the whistle-blower in this case is an HFMA member and we value all of our members. However, we felt that the issues at stake in this suit transcend the interests of an individual member; they concern all members and the entire profession. And because the court's decision could affect all healthcare finance professionals for many years to come, we decided that filing the brief was the right thing to do.

HFMA's brief, which is posted on HFMA's Web site at www.hfma.org, has been filed "in support of defendants' rule 12(b)(6) motion to dismiss." It might appear that HFMA is taking Quorum's side. Yes... and no! HFMA had to follow specific legal procedures to have a voice in the suit. Quorum, the defendant, submitted several motions to dismiss the various allegations made by the whistle-blower and the government. HFMA's decision to participate in this issue by submitting a "friend of the court" brief addresses a very specific issue - Quorum's motion to dismiss the allegation that a healthcare provider is required to automatically submit reserve work papers and calculations with its annual cost report.

By the time this column is published, the court may well have ruled on this particular aspect of the case. Although it is the defendant, Quorum Health Group, that will win or lose its motions, all healthcare finance professionals may eventually feel the impact of the decision. Regardless of how the court may rule, healthcare finance professionals should review their current processes for submitting cost reports. Remember that the fiscal intermediary always has had the authority to request the cost reserve information, and may now request it more often.

It is unfortunate that in covering the Quorum lawsuit, Modern Healthcare characterized HFMA's actions as "taking sides" with Quorum. In fact, HFMA is neutral regarding the suit against Quorum and has no special knowledge related to the allegations against Quorum. We felt, however, that the allegations by the government and the whistle-blower related to the automatic submission of reserve cost report and other work papers were not in keeping with common professional interpretation and practice. Furthermore, throughout our years of working closely with HCFA on healthcare payment and billing issues, we have not been alerted to a problem in this area. HFMA felt the filing of its brief was necessary to help ensure that HCFA, and not the courts, advances any changes in healthcare finance policy. This action is very appropriate for a professional membership organization to take. I hope that you feel that your Association has taken the lead on an important issue.