This transcript has been auto generated
00;00;00;00 - 00;00;33;10
Meg Pekarske
Hello and welcome to Hospice Insights: The Law and Beyond where we connect you to what matters in the ever-changing world of hospice and palliative care. Where’s the Line: When Does Poor Quality of Care Create False Claims Liability. Jonathan, this is a blast from the past, not you, but like this subject, because I felt like when I started my legal career 25 years ago, we were talking about this kind of worthless service.
00;00;33;13 - 00;01;01;08
Meg Pekarske
I was doing a bunch of nursing home work back at that time, and so I feel like late 90s, early 2000, this was this was the thing. But there is a new case we're going to talk about that. There is a settlement on that has this theory of liability about when care is so substandard that the government should not pay for it, and billing for it is false.
00;01;01;10 - 00;01;15;23
Jonathan Porter
Yeah, I guess this is. Yeah, I guess things in DOJ world are cyclical because yeah, this is back. And I guess at some point we could talk about whether this is a sign of things to come up or an outlier. But yeah, no, certainly an interesting one. I'm glad we're talking about it.
00;01;15;25 - 00;01;48;09
Meg Pekarske
So give me a rundown. What is this current case? I know it came out of Ohio. And again, as with many False Claim Act cases, we're not talking about something that actually went to a jury or judge. I mean, this is a settlement and, where essentially the provider, which I think up until fairly recently, most false claim cases settle, right?
00;01;48;09 - 00;02;17;04
Meg Pekarske
I mean, AseraCare happened in in our hospice space and that went to litigation, that whole saga. But I mean a lot of things are settled. So I think this was like a 2 or $3 million settlement for a not for profit, nursing home in Ohio, which, I mean, I guess the specifics are like overly interesting, but I guess give us a little flavor of what went on there.
00;02;17;04 - 00;02;41;05
Jonathan Porter
And yeah, Meg, this is actually a really good example of why these cases settle, because there's a lot of history that that builds up to the settlements. And I think once, once we explained to to our listeners what that history is, they're gonna understand. Okay, I get why they why they settle this, even though the worthless services theory is something that I think everyone agrees is a bit of a stretch when we're plugging that into the False Claims Act.
00;02;41;07 - 00;03;06;12
Jonathan Porter
But the background here, back, as you said. So this is an Ohio based nonprofit. I guess they're they're it's a chain of, of, nursing homes operating throughout that area of the world. This this actually started with DOJ filing suit in the Eastern District of Pennsylvania. And so eastern Pennsylvania has a great office. They've got a really good, experienced, affirmative civil group.
00;03;06;14 - 00;03;40;21
Jonathan Porter
They're seen as pretty aggressive. But that's that's what that's where this started June of 2022, not a qui tam. This was a proactive case that that DOJ filed on its own in the Eastern District, Pennsylvania, against this Ohio based chain of nonprofits. And what happened is they they just immediately start litigating this the the, the nursing home, they file a good motion to dismiss their, arguing the things that that I would argue that, hey, there's a big difference here between negligent care and worthless care.
00;03;40;26 - 00;03;56;07
Jonathan Porter
One of those violates the the False Claims Act. The other one should be a, you know, like a mid mal type thing and, that gets fully briefed, denied by the judge in early 2023. And then from there.
00;03;56;10 - 00;04;14;27
Meg Pekarske
The Jonathan just for our legal vulnerable. Yeah. We have a lot of non-lawyer listeners. I mean, just because someone loses summary judgment, that's not a surprise because essentially right to lose on summary judgment, which is what the nursing home lost on summary judgment.
00;04;14;29 - 00;04;16;25
Jonathan Porter
No, on on a motion to dismiss.
00;04;16;26 - 00;04;39;03
Meg Pekarske
Motion to dismiss. But either way, it's a high bar to get something dismissed, even when a motion to dismiss, or a summary judgment, too, because it's like you have to say there's like, no. Well, for summary judgment, no facts in dispute, like, what's the standard? So just to give some flavor for things.
00;04;39;05 - 00;05;07;01
Jonathan Porter
Yeah, sure. So when you're, when you're dealing so motion dismiss comes first. And essentially what you're saying is judge don't let this get into discovery. Let's not exchange documents. Everything. Because if you take all of the allegations in the complaint as true, they still can't win. And that's what the that's what the defense almost always does in false claims at cases because there's pretty clear, case law about what is and is not a false Claims Act violation here.
00;05;07;04 - 00;05;27;27
Jonathan Porter
The defense made those arguments. I said, look, judge, let's say that let's say that everything in the complaint is true. You still can't say that these are worthless services in violation of the False Claims Act. The next step, as you mentioned, is summary judgment. That's after discovery. That's after you. They take, you take depositions, exchange all of the documents.
00;05;27;29 - 00;05;57;28
Jonathan Porter
And that's one use. That's when you fully brief something up and say, look, judge, here are a bunch of things that we don't think are in dispute. And you can then use those to say who wins and who loses. And where you get to a trial is if a judge hears the summary judgment motions and says, all right, well, there's enough in dispute here that I need a fact finder, a jury, to weigh in on these factual disputes and pick who's the winner and who's the loser, so that that's that's that's way oversimplified civil litigation.
00;05;57;28 - 00;06;15;06
Meg Pekarske
Oh, sure. Sure. But that's just sort of helpful to have, because when you hear the provider of lost a motion to dismiss, it's not like, oh, geez, they must have done something wrong necessarily, because that's that's hard to win. Sometimes, I mean, yeah.
00;06;15;12 - 00;06;37;25
Jonathan Porter
And to be honest, making my experience the courts are pretty different when it's DOJ filing a complaint. They're pretty deferential to DOJ where they they want to they're usually not going to when it's a whistleblower, sometimes they'll they'll take a bit of a harder look. But usually when it's DOJ making the accusations, and they have the right accusations.
00;06;37;27 - 00;06;42;02
Jonathan Porter
Most of the time courts are going to be pretty deferential to the DOJ complaints.
00;06;42;04 - 00;07;14;09
Meg Pekarske
So and you mention because again, this is just sort of to put this into context, because most of the things you and I talk on, on this podcast is when there's a whistleblower and you sort of know that because you get a file, the whistleblower files a complaint under seal, you get this civil investigative demand, fancy word for subpoena for like a zillion records, like everything you ever did, like for ten years.
00;07;14;12 - 00;07;40;25
Meg Pekarske
So you just mentioned they there was the suit filed and this motion to dismiss before discovery. And so because DOJ did this on their own, that you didn't have the civil investigative demand process. So how much discovery happened? Because I know a lot of these nursing home cases, like back in the day, it's like comes up through a survey, like a state survey.
00;07;40;25 - 00;07;55;19
Meg Pekarske
And so you have all these allegations that the state survey agency already found and whatever. But I guess, can you say a little bit about how much did they really know because you're saying they didn't do full discovery. Yep.
00;07;55;21 - 00;08;16;20
Jonathan Porter
There all I so like let me, let me, let me just fix that. So the that there wasn't a key term here DOJ filed something proactively. But that doesn't mean the DOJ doesn't have CID power before they filed the suit. So DOJ can serve SIDs, so long as they have a reasonable suspicion that someone's violated the False Claims Act.
00;08;16;22 - 00;08;44;26
Jonathan Porter
And so here, I don't really know. We can't tell from the docket how this got on their radar, but almost certainly there were kids that were issued to, to this nonprofit, before they filed suit. And so that really the the existence of a whistleblower doesn't really impact how DOJ is going to approach that investigation. They just here they they they just they lacked that whistleblower who comes in and says, you know, they knew what they were doing was wrong.
00;08;44;28 - 00;08;58;10
Jonathan Porter
Sometimes that's that's a pretty key thing in, in, in these investigations because these are, you know, they have to prove knowledge. But here they, they figured this out some other way. And DOJ launched into their investigation and then at some point filed a complaint.
00;08;58;13 - 00;09;29;05
Meg Pekarske
So I guess the bad news is, when you're dealing with the kid, that's not even really discovery. If this goes further, there's going to be even more things, which a lot of it I'd imagine would be talking to people. I mean, there's interrogatories and the IDs, right where you have to answer, but you're typically they're not taking interviews and stuff because what what is it that they could have learned that they hadn't learned yet, like between a kid and like discovery.
00;09;29;07 - 00;09;51;10
Jonathan Porter
Yeah. So great. Great question Meg. So really DOJ gets to bite at the apple okay. They get pretty much all the discovery tools during the CRT investigative process. And, and so they can figure all this stuff out. But what almost always happens is they get up to they filed a complaint and they're starting to litigate, and then they're starting to piece together.
00;09;51;15 - 00;10;17;15
Jonathan Porter
What would a trial look like? What would our summary judgment motion look like. And they start to say, okay, there's other things that we need. And so DOJ will get a bunch of stuff during the CID during the investigative stage. And then once they've filed something, they start saying, okay, well, we need 17 different things. That's just that's what that happens in civil cases and, and criminal cases with DOJ as well as they you get on the eve of trial and you realize, oh, I sure could use this extra stuff.
00;10;17;17 - 00;10;41;29
Jonathan Porter
The only difference is during the CID process. That's a one way discovery thing. You're not you know, I can't subpoena DOJ or a federal agency during that time and ask for stuff, but you can when it's after they filed the the complaint, you can absolutely serve, agencies, the United States, all this discovery process, you know, and get all of these all these answers so that you can mount your defense.
00;10;42;01 - 00;11;29;17
Meg Pekarske
Got it. So the back to to this case. So they did maybe there was a state survey. Who knows. But then they did a lot of their own digging through this investigative tool CID. They think there's enough evidence of poor quality and they resurrect this worthless services theory of liability after looking at all of this stuff, which, as you say, I think you know, there is when you think of poor quality of care, it's like, wow, there is a whole survey and certification process which fines people if they're, you know, breaching standards of care as defined by the government.
00;11;29;17 - 00;12;03;07
Meg Pekarske
You also have, you know, private model litigation. And so the redundancy here, because I just have to assume that there was probably survey citations and fines that they've already paid for whatever is claimed to be substandard here. But this is like the chair you hadn't tab that's take, you know, not just fines but treble damages blah blah blah, which is, you know, high stakes because it's like it's about the money you paid, not just like a fine.
00;12;03;07 - 00;12;32;02
Meg Pekarske
So so they decided to do this. So they do all this. Yeah. They work. They find the staff and then they made this choice. So, but I know what I, we were conversing about doing this podcast. You were like, sure, Meg, this is a worthless services. I haven't seen one of those for a while because it came across my desk and I was like, oh, this is a full circle moment.
00;12;32;02 - 00;12;59;25
Meg Pekarske
And obviously this is on our Hospice Insights podcast. But I always say that, you know, hospice regulatory action and otherwise is like and in 15 years behind like nursing homes and other things. So this piqued my interest because we know that false claimant activity and hospice is very robust. Now, maybe there's so much other bad stuff going in the hospice.
00;12;59;25 - 00;13;27;07
Meg Pekarske
They don't even need to get quality of care like so there's enough that DOJ doesn't need to stretch itself to when you have people paying, you know, kickbacks and all the not even providing services, much less. Yeah, worthless. There were no services provided. So but that was my angle here is like, you know, there's changes that are happening in hospice right now in terms of quality reporting and other things.
00;13;27;07 - 00;13;53;07
Meg Pekarske
That is this sort of a next gen problem that hospices might have. As we get concerned more about quality, and we know that the survey process, due to recent changes, that's starting to look more like nursing homes and like we can have bad things happen to us and get fined and all these bad things that, you know, nursing homes have been dealing with.
00;13;53;07 - 00;14;22;15
Meg Pekarske
So that was sort of my, my, you know, interest in this in particular would. Well, one is there's going to be a frequent thing and then two but hospices being that stood line for this because at least, you know, in my world, you know, you do run into people complaining about hospice that you killed my loved one or, you know, you didn't respond fast, that you know, whatever.
00;14;22;17 - 00;14;39;27
Meg Pekarske
Usually though, worth the services. There's like egregious stuff going on. Like pretty bad. Like that's not just like a service failure. That's like, but but tell me your thoughts because I know what I think already. I want to know what you think.
00;14;40;00 - 00;15;05;24
Jonathan Porter
Yeah, I don't think this is the the start of the next big wave of worthless services cases. I mean, if you think about how worthless services cases work, I mean, back, the FDA comes out of the Civil War where you've got these egregious stories of of defense contractors providing the Union Army with with things that were genuinely worthless, things that they just didn't want.
00;15;05;27 - 00;15;43;16
Jonathan Porter
And, and so, you know, if you think about, like, how, how the government was buying things back then, worthless services does make sense. The issue is the government doesn't buy things now the way it used to. And so, you really don't need worthless services to have actionable stuff under, under FCA because the when, when, when contractors are paying hospice claims, they're, they're relying on all of these, all of these implied certificates that, that, that hospital providers know really, really well.
00;15;43;19 - 00;16;03;00
Jonathan Porter
And so if they're going to bring if DOJ or a whistleblower is going to bring a claim against the hospice, they're almost certainly not going to say this was totally worthless. They're going to ground that in some actual requirement and some actual requirement under some regulation that says X and they're going to say, look, hospice, needed to do X in order to get paid.
00;16;03;05 - 00;16;22;27
Jonathan Porter
That's a condition of, of payment. They didn't do X. And that's what it's going to. That's what it's going to be about. The issue here Meg, is they didn't have that X. There wasn't in the nursing home world there isn't a really clear standard where where DOJ or whistleblowers can come in and say, here's the X, here's the actual thing you didn't do.
00;16;22;27 - 00;16;47;02
Jonathan Porter
And so you get this parade of horribles talking about how bad the conditions were. And then you try to loop that in with some general thing. And here the judge said, look, there's there's this standard from the Nursing Home Reform Act that says that, that nursing homes have to care for residents in such a manner. And it's such an environment as will promote maintenance or enhancement of the quality of life for each resident.
00;16;47;04 - 00;17;05;29
Jonathan Porter
That's it. Like that's the whole that's the whole thing. And so the judge here said, look, that's the that's the standard. And there's a way that you can violate that and therefore violate the False Claims Act and then listed the just parade of horribles that was going on allegedly in these, in these nursing homes to, to sustain that.
00;17;05;29 - 00;17;21;06
Jonathan Porter
But I don't think that's really something. I mean, potentially you can see that as a, as a, as a theory in some hospice cases. But I think there's more concrete things that that would be, a better route for DOJ blowers to go.
00;17;21;08 - 00;17;45;13
Meg Pekarske
Well, it is interesting because obviously back in the day, I did sort of all different kinds of post acute care work and then focused on hospice like seven years into my career, decide to just do that. But the regulatory structure of hospice is a little bit different. Like you have these conditions of payment and then you have this.
00;17;45;20 - 00;18;22;09
Meg Pekarske
What I say is the nucleus of every hospice false claim case is ineligibility for care is we have a six month prognosis standard. Or if it's like inpatient care, you had to have acute symptoms that can be managed in the home. And if thing and then we have these other conditions of payment. And then obviously there's anti kickback things that come up in a lot of hospice cases because you know we're trying to work with facilities and get referrals from them and physicians and other things.
00;18;22;11 - 00;18;52;18
Meg Pekarske
And so you're right, like the the regulatory scheme for nursing homes is a little bit different. But, you know, this is my personal commentary. It just seems like why pound people bar shut them down if you think they're so bad. But don't do this like so. Again, my personal bag on her soapbox here is like, if DOJ is so concerned about that, these people are doing bad care.
00;18;52;18 - 00;19;27;10
Meg Pekarske
That's so catastrophic, then that's what survey cert should do. You can terminate providers for substandard quality of care, which has yes, you have an administrative hearing process, but CMS wins those cases. You know, I mean, so it just it perplexes me to where either it's not that bad and these other things can police that, or then don't just have them pay a bunch of fines and then think like everything's going to be okay.
00;19;27;10 - 00;19;51;29
Meg Pekarske
And I don't know, I just I, I too don't necessarily like the feel of this in terms of, from a public interest standpoint. Yeah. Because I think if someone is so bad that you should, they probably shouldn't be in business or something, then, which is an easier road to move forward with or get them to sell to someone else.
00;19;51;29 - 00;20;15;28
Meg Pekarske
Or, you know, there's lots of different things you can do to push someone out. So so why would one? I know we're just plain pontificating dreamworld here, but why would a prosecutor do that? I mean, it just seems like this is a lot of work. You have like, endless cases. You can probably pursue. This is a hard road.
00;20;16;01 - 00;20;17;28
Meg Pekarske
Why does one do this?
00;20;18;01 - 00;20;42;08
Jonathan Porter
Yeah. All good points back. And let's make clear like we're not defending that that we're not saying that nursing homes should do to their patients what these are doing, their patients. You know, it's it's obviously bad to leave patients in soiled sheets and to not, you know, feed them. Those are, again, not things that we're saying should happen.
00;20;42;10 - 00;21;04;03
Jonathan Porter
But this is very much I think what you're getting at is this is very much a, you know, round peg in a square hole type situation. This is the False Claims Act was designed to go after knowing fraud. And this is not knowing fraud. This is something else. This is this is, this is negligence. This is if it's intentional, then that's an intentional tort.
00;21;04;03 - 00;21;20;22
Jonathan Porter
I mean, there's all these things that, that, that the patients have remedies to do. And there are all these licensure and, and state level authorities that could shut these places down. And so, Meg, I'm with you. This is not the type of thing that that I would expect, DOJ to want to spend a lot of time on.
00;21;20;22 - 00;21;39;28
Jonathan Porter
But they do. You know, I think one of the things that that that came up, especially during the Biden administration, was more, a bigger emphasis on finding cases where there were real victims. And I think what you could do is, if you're told, go find cases where there are elderly victims. This looks a lot like that.
00;21;39;28 - 00;21;40;18
Meg Pekarske
Yeah, yeah.
00;21;40;18 - 00;22;00;08
Jonathan Porter
Yeah, there are there are real victims in this, a lot of times in false claims that cases you don't have a ton of, you know, patients who are victims. I mean, it is clear here at the allegations are true. This is a sad situation that was going on in these in these nursing homes. But that doesn't mean that the false Claims Act is, is the answer.
00;22;00;11 - 00;22;18;14
Jonathan Porter
And so this was a I think these were DOJ attorneys who were told find cases where there are elderly victims and this was the most readily, you know, made one to them. Doesn't mean it should have been brought under the False Claims Act. I'm with you, Meg. The better thing here would have been, you know, shut them down.
00;22;18;14 - 00;22;31;13
Jonathan Porter
If they should have been shut down. Shut them down. Or do something else from an administrative side. Let the patients file class actions or whatever they whatever they do. The the False Claims Act seems seems like the wrong mechanism for this.
00;22;31;16 - 00;23;20;13
Meg Pekarske
Yeah. I just think that. I mean, I strongly believe in elder rights, and and I, you know, perplexed when it's like there are so many things from a survey and certification standpoint, like you can get, you know, a monitor and temporary manage, man, and you can put a lot of things into which, again, now those are available for hospices and through survey, citations to it just seems like when we're dealing with quality of care and you don't think people are doing a good job, it just seems like why or why are we doing things?
00;23;20;13 - 00;24;12;15
Meg Pekarske
Because it isn't really protecting the the poor victims here. Like with action, should probably be taken and not years of litigation that goes on and whatever to or what you're going to get a kid or something in at the end or I mean, the idea at the end of this or something, I mean, it just there's just so yeah, I was frustrated sort of reading this because it just feels like there's better ways to handle and there and that's in health care, which is so highly regulated for quality through, you know, survey processes and other things, and especially nursing homes are subject not to just a crediting bodies, private companies that are surveying them.
00;24;12;15 - 00;24;36;04
Meg Pekarske
It's like state survey agency. So you're getting a hard look from government enforcement that people you pay to, you know, do your surveys. So I mean, there's a lot of regulation there. But, this is the world's according to Meg. And, you know, it's so simple to, to solve these, these problems, right? Yeah. Well.
00;24;36;10 - 00;24;52;27
Jonathan Porter
But, Meg, I think you know what the big takeaway for me in this is? I think you're a you're I was frustrated as well reading this. And I have to think, given the way the case law is in the worthless services area, if they kept litigating, I think they eventually would have won. But I think it's clear that.
00;24;52;27 - 00;24;54;27
Meg Pekarske
They need to. We need the nursing home.
00;24;54;28 - 00;25;23;28
Jonathan Porter
Yeah. The defense here, the nursing home would have wanted eventually, just because of the way the law is within the False Claims Act, especially with worthless services cases. But that would have been really hard to get to. So they would have had to continue litigating. Makes clear the district judge didn't like them. And, and and so in order to get that, that win, you would have had to have litigated for another several years, find a way to get up to the third circuit, where maybe you get a good pail, maybe you don't.
00;25;24;00 - 00;25;48;13
Jonathan Porter
And so that's the big takeaway. And I think your your listeners may is a lot of times just the way that this works, litigating these matters. And it is really expensive. And sometimes settling when you don't think you should settle is the better business decision. Yeah. Because again, years of litigating is a really expensive proposition and you're taking a lot of risk.
00;25;48;15 - 00;26;05;22
Jonathan Porter
And at some you there's no guarantee at the end of this that, that you win. Maybe this maybe you get up to the Supreme Court and the Supreme Court says, no, we're going to resurrect worthless services, and we're going to go with that. And so here you're thinking dollar settlement that you get to pay over the course of a year, a low multiplier.
00;26;05;22 - 00;26;26;15
Jonathan Porter
I mean, this was actually a really good settlement when you think about what their other options were, they were in Discovery Post. After losing the motion dismissed, they were in discovery for almost two full years. And that's really expensive. At some point people just say, I, I want to be done with this. What can we do to be done with this right now?
00;26;26;19 - 00;26;32;00
Jonathan Porter
And they got a good deal out of out of DOJ. I think that's what happened here is they just they just got worn down.
00;26;32;03 - 00;27;06;23
Meg Pekarske
Yeah. I think that that is something that's really important or and maybe defines one of the many qualities of a good lawyer is, you know, getting continuing to revisit that with your client about I frame it more is like what is winning to you? I think when you're dealing with the FDA, it never feels like winning. Right? But but conceptually, it's like what matters to you because there are some people ride or die principles, everything.
00;27;06;23 - 00;27;33;05
Meg Pekarske
And like, you know, I think like you, you see the esoteric hair case that went on for like 11 years or something. I mean, a super long time and all the twists and turns and all that stuff and yes, expenses, one of them. But also just like the emotional burden of these cases, like your ability to give or want to sell your business, like, you know, you got to get out from under this.
00;27;33;05 - 00;27;56;03
Meg Pekarske
And so I think it's really important. I mean, not that you don't I mean, you don't want to just throw in the towel right away because that's how that looks like, you know, not the right thing. But I think even in like our audit cases, like even in other kinds of things, I think it's really important for lawyers to always talk about.
00;27;56;05 - 00;28;18;18
Meg Pekarske
And lawyers get a bad rap. It's like, oh, well, it's not in your personal interest for me to settle those because you make more money. And it's like, why would I ever want that? There's more than enough work to have. I want you to get to these are lawyers don't make the decisions right. They implement decisions. They're I it's me again.
00;28;18;20 - 00;28;51;21
Meg Pekarske
You know, but I think having those business discussions with your client and I always talk to about showing them the runway early on. So even when we get again not FCA but like audit work, like how long is this going to take. What's it going to look like? How much do things cost. You know, like giving them a stance and I and then you can keep revisiting that because you never want the first time someone here's something to be like what you know because you just.
00;28;51;23 - 00;29;20;10
Meg Pekarske
And I in my 25 years working with lawyers, I mean, I think that that some do that better than others. And I think it's really appreciated because as lawyers and you hear this a lot in your practice, because it's so expensive, you don't have a lot of control. Government has the exact power and the leverage. And so, you know, you sort of have to do it.
00;29;20;10 - 00;29;49;24
Meg Pekarske
It's not it's it's very different than other kinds of litigation where, you know, there's maybe a meeting of the minds earlier on the process. But I think like DOJ just has a different mindset. I mean, they have different power. They have different they have different freedoms. Then, you know, if you're doing a class action lawsuit and it's like, I don't want to lose my shirt, I'm just trying to get a little bit of money for everyone, you know?
00;29;49;24 - 00;30;12;26
Meg Pekarske
I mean, there's different, different motivations. So, yeah, I guess a reminder that always working with the Department of Justice and seeing these settlements, as they say, to clients all the time, I mean, just because something's happening to does not mean you did anything wrong. Right? And the beginning of the story is not the end of the story.
00;30;12;28 - 00;30;37;01
Meg Pekarske
And the settlement isn't really the end of the story. It's not the truth. Right? It's like a business decision that's made to settle something. And so I think that's always important to remember when you see headlines is that's not means that someone's guilty of whatever. It's just like, I need to get done with this.
00;30;37;04 - 00;30;57;24
Jonathan Porter
Yeah. Meg, I've yet to have a client who says in our first meeting, let's settle. We were the we were. I want to settle this. I want to pay the government a ton of money. No. No one, no one goes into representation saying that. But over time, you start to have these right conversations with them where you say, look, this is we're talking years here.
00;30;57;27 - 00;31;20;24
Jonathan Porter
And here's the way I think someone could view these documents that we're seeing, these emails that we're seeing. And so this is let's talk about business decisions and whether you want to keep throwing money. This you know, me personally I there's I've got a lot of cases where I feel really strongly that from a policy level, this is not something that should be, should result in in DOJ enforcement.
00;31;20;24 - 00;31;41;11
Jonathan Porter
There are just other mechanisms out there that are better than the False Claims Act, which is a tremendous hammer. And I would love to litigate those for the next ten years. 15 years. But it's not my money. It's it's these are our clients dollars that, that, that, that are at stake and it's their risk. And so that's the biggest thing.
00;31;41;11 - 00;32;01;03
Jonathan Porter
Exactly what you're saying is walking clients through, here's what this looks like. Here's here's the risk, here's how long it's going to take. And what people oftentimes don't understand is these things take a lot of time. They're about once a week I hear from clients say, how long is this going to take? And the they they almost never like my answer.
00;32;01;03 - 00;32;24;00
Jonathan Porter
We have zero control over how long this takes. DOJ is going to take as long as they want to. And, there's nothing we there's no like, magic button where you push it and all of a sudden DOJ makes a makes a decision. So these things do take time. I post about this. There's one case on on LinkedIn a couple weeks ago, the 11th Circuit's a few weeks back, a firm dismissal of a 15 year old kid.
00;32;24;00 - 00;32;47;14
Jonathan Porter
And 15 year old, DOJ took ten years to investigate that, before making a decision. And then they litigated it for five years. These things take, a long time. And so sometimes ending it is a really nice thing. You're not going to be happy ending it. You're not gonna be happy with the DOJ press release saying that you're accused of doing something wrong.
00;32;47;16 - 00;32;50;21
Jonathan Porter
But sometimes you sometimes it's good to end things.
00;32;50;23 - 00;33;17;15
Meg Pekarske
And I guess last question on these settlements, which I'm sure there's a lot of standard language, you know, we see in those settlements, but you were essentially getting a release as it relates to I mean, I know they tried to keep doors open somehow, but what are you release from when you settle this? With the government?
00;33;17;17 - 00;33;42;22
Jonathan Porter
Yeah. You're you're released from someone coming back and saying you violated the False Claims Act or, you know, various other, theories like, you know, payment by mistake, for the exact claims that you are releasing. And so you are buying a release from that. You're not getting a release from criminal conduct. And so if DOJ, for some reason comes back and says, well, now we think this was criminal, you're not releasing that.
00;33;42;22 - 00;34;06;22
Jonathan Porter
You're not releasing administrative remedies. There's going to be a big one. If you ever look at the DOJ settlement agreement, there's a big long list of things that you are not releasing. And and Meg, you mentioned this one. There's language in settlement agreements that DOJ is authorized to put in there that says that these are that these claims are allegations only, and disputed by the other side.
00;34;06;24 - 00;34;29;20
Jonathan Porter
DOJ will usually put that in a press release saying that there's been no determination of liability, and no one reads that in press releases. All they do is they read the top level thing and say, oh, they must have committed all, all of the fraud without without realizing. Now, these are these are still disputed points. We're not admitting to anything unless you're in the District of Massachusetts, where they make you admit to to stuff, which I think is wrong, but that's a different box.
00;34;29;22 - 00;34;32;12
Jonathan Porter
Oh.
00;34;32;14 - 00;35;01;23
Meg Pekarske
Yeah. Well, that's the thing with litigation. I don't think you ever feel good after it's gone. I remember talking to a young lawyer once and who wanted to do litigation, and she said she wanted to do litigation because you help people solve problems. Says like, litigation is not really about solving problems. It's about, you know, I don't know that anyone feels really vindicated.
00;35;01;23 - 00;35;25;17
Meg Pekarske
I mean, litigation, you know, whatever kind, it takes an emotional toll. And, you know, even in our audit world, I mean, even if you we win 100%, people don't feel good. I mean, I've been jumping down. I won a $40 million case. And the CEO is sort of lackluster because it's like, well, why did this ever happened to begin with?
00;35;25;17 - 00;35;45;12
Meg Pekarske
So, like, even when you're, quote, vindicated, you're like, why did I have to go through this pain and suffering and spend all this money and do all that stuff? And so obviously, you never want to have to get in these situations to begin. Well, because even if you're past it, it never feels good stuff.
00;35;45;14 - 00;36;05;15
Jonathan Porter
Yeah, it's still bad that that 15 year old Keith I was talking about, yes, they won that all to pay the government or whistleblower any money you still paid 15 years worth of legal fees like that. That's a that's a weird kind of win. And so yeah, not very, very seldom is someone coming out the other end and saying, yep, I feel I feel great about this.
00;36;05;15 - 00;36;10;00
Jonathan Porter
This is this is super. It's all this. It's it's shades of sad.
00;36;10;02 - 00;36;15;00
Meg Pekarske
Yeah. No. Exactly. That's your life. Shades of sad. Sad.
00;36;15;07 - 00;36;17;06
Jonathan Porter
That's right.
00;36;17;09 - 00;36;20;05
Meg Pekarske
But intellectually interesting nonetheless.
00;36;20;05 - 00;36;40;15
Jonathan Porter
So but but I think, you know, one of the important things to me is process. And when, when I was at DOJ, I was surprised how often defendants would come to me after a sentencing or after we'd resolved some FCA thing. And, and they'd say, look, I just appreciate you. You approach this in a very fair manner. You had your views and you heard mine.
00;36;40;15 - 00;37;01;29
Jonathan Porter
I appreciate that. That's the thing that I think, you know, educating clients on. Here's here's the process, here's why it works this way. And just when when things, when things could go worse and it's not going worse because you're steering them in a different direction. I think clients do appreciate that. So there is some gratitude at the end of a lot of my representations where, yeah, we're not thrilled with everything that's happened.
00;37;02;01 - 00;37;06;10
Jonathan Porter
But at least, clients appreciate that, that it could have been a lot worse.
00;37;06;12 - 00;37;34;24
Meg Pekarske
Yeah. Again, the dark cloud. Yeah. Lawyers. Well, could have been a lot worse, right? They wonder why lawyers are such, you know, melancholy people sometimes, right? Like, we deal with problems a lot, and then it's like winning is like gray sad instead of dark. Sad. Oh, and that really melancholy note. Well, thanks for taking the time.
00;37;34;24 - 00;38;02;01
Meg Pekarske
It's interesting. I'm glad you don't think that this is, you know, a new, new, old thing we're going to be seeing, moving forward. And the settlement as as you explained, isn't anything any sign of the veracity of, the theory of liability? It's just probably a business decision. Like, let's move on.
00;38;02;03 - 00;38;19;16
Jonathan Porter
It's waving the white flag after getting a really good 1.25 times multiplier is is really, really, really, really good. And that's what they got here. And so kudos the defense did a good job here I think this was just a good business decision. But but yeah not not a sign. Hopefully not a sign of things to come.
00;38;19;16 - 00;38;25;13
Jonathan Porter
Doesn't mean the hospices are in the clear. There's just other things that that they'll be investigated for besides worthless services.
00;38;25;13 - 00;38;56;18
Meg Pekarske
Yeah, I, I would echo that a million times because I think, you know, on our earlier podcast when we were talking about, you know, health care fraud is like a huge priority for DOJ. I think that also means it's a huge priority, like hospice is just continues to be in the headlines. And I don't think that pendulum is going to swing back to we're not first on the list or something, for some time.
00;38;56;18 - 00;39;22;22
Meg Pekarske
So hopefully that will change. But I don't know when.
Jonathan Porter
Who knows, who knows.
Meg Pekarske
Who knows. But anyway. Well, awesome. Thank you for your time. And this was this was fun even if sad.
Jonathan Porter
Thanks, Meg.
Meg Pekarske
Take care. Well, that's it for today's episode of Hospice Insights: The Law and Beyond. Thank you for joining the conversation.
00;39;22;25 - 00;39;36;15
Meg Pekarske
To subscribe to our podcast, visit our website at huschblackwell.com or sign up wherever you get your podcasts. Until next time, may the wind be at your back.