jurisdiction over the case. The complaint is filed “under seal,” that is, confidentially. Once a complaint is filed, the Department of Justice (DOJ) has 60 days to investigate the information disclosed and determine whether it will join in the lawsuit. The DOJ can, and often does, request the court grant extensions to give it more time to investigate. It is not unusual for a complaint to remain under seal for as long as two to three years before the DOJ makes a decision. However, a relator does have the right to challenge extension requests and to have the seal lifted. Once a complaint is filed, the DOJ will assign the case to an investigative agency that has jurisdiction over the allegations. During the period of time the complaint is under seal, the Government investigators will conduct a preliminary investigation based on the information disclosed by the relator. This usually includes a comprehensive interview of the relator and review of relator's records if any exists. It also will include interview of any corroborative witnesses, review of appropriate government records and interviews of government officials. The investigation can also be expanded to include obtaining and reviewing the records of the dA critical review of history shows that advancements in the general atmosphere and safety of healthcare delivery have occurred primarily as a result of legislation, regulation and litigation. Beginning as early as the Flexner report of 1910, healthcare has required the threat of legal intervention or financial penalty to make substantial changes education, operations, medication safety and self governance. As a result there now exist multiple state, federal and private sector agencies dedicated to the regulation and safe provision of healthcare services in the United States. DHS through NRP/NIMS and the NRTS have become the newest of these agencies.

Healthcare is a business and fortunately most involved in the business of healthcare are ethical and moral people. To be sure, there are some who commit fraud and steal from the system. Many are caught and suffer civil and criminal penalties for their deliberate actions, and many more get away with fraud longer than they should.

Corporate business people are also mostly moral people. The media has made much of the Enron’s and Worldcom’s and Sarbane Oxley has come into existence to prevent as much of this type of fraud as possible.

These worlds overlapped this year when Disaster Preparedness guidelines, corporate financial forecasts, the signatory obligations imposed by the National Response Plan (NRP) and the mandates of the National Incident Management System (NIMS) collided.

Last year a High Alert, LLC white paper had raised the specter of NRP/NIMS compliance being linked to CMS (Medicare, Medicaid and Tricare) billing, the discussion had been strictly theoretical. Several federally funded training programs have now brought to the table a new and ominous implication of the NIMS Integration Center Implementation Plan for Hospitals and Healthcare. Additionally, hospitals have reported being informed that disaster preparedness will be linked to CMS reimbursement (Medicare, Medicaid and Tricare payments).

This is the first step in a progression that, if followed by CMS, Department of Health and Human Services (DHHS), Department of Homeland Security (DHS) and Department of Justice (DoJ), will put the full weight and power of the federal government behind an unfunded mandate for hospital preparedness. An appreciation how CMS and DoJ have handled dealt with healthcare providers who have run afoul of these agencies in the past 18 months may portend the future.

In early 2006, DoJ instituted a change in how it dealt with Medicare, Medicaid and tricare fraud. In prior years, these issues were typically dealt with as civil issues with civil penalties and restitution. Most offenders plead "guilty" or "no contest" to the charges, paid a fine and went home. Beginning in early 2006, DoJ began using the "guilty" plea from the civil cases as evidence to prosecute these individuals criminally. The type of insurance fraud spanned the gambit from billing for nonexistent patients to billing more than the documentation would support. It is this latter prosecution that is the cause of concern.

NRP and NIMS regulations are promulgated upon all signatories to NRP/NIMS, including DHHS. As signatories, all government agencies agree to promulgate the requirements of NRP/NIMS upon all their agencies/departments. Since DHHS is a signatory, this would include CMS (Medicare, Medicaid, Tricare). Since a all healthcare providers who bill CMS directly or indirectly are regulated by CMS and have independent contractor status with CMS, the requirements and regulations promulgated upon CMS by NRP/NIMS through DHHS are passed down to those contractors. This is affirmed by every healthcare provider every time they bill CMS on a UB92, CMS1500 or electronic equivalent because these forms include the attestation that the healthcare provider is in compliance with all regulations and requirements of CMS and the program billed.

It is this last fact that opens the door for DoJ to involve itself in hospital preparedness. Through their actions in 2006, DoJ has shown the willingness to criminally prosecute healthcare providers for overt insurance fraud. Signing the CMS attestation when not in compliance with NRP/NIMS is the same as signing the attestation that chart documentation is in compliance with CMS documentation standards. In short, the failure to be all hazards prepared may have just been raised to the level of a federal felony, enter Qui Tam.

Basically, a Qui Tam ("He who sues on behalf of the king as well as for himself") is a provision of the Federal Civil False Claims Act that allows a private citizen to file a suit in the name of the U.S. Government charging fraud by government contractors and other entities who receive or use government funds, and share in any money recovered.

A private citizen, called a realtor, can file a complaint in the U.S. District Court with jurisdiction over the case. The complaint is filed “under seal,” that is, confidentially. Once a complaint is filed, the Department of Justice (DOJ) has 60 days to investigate the information disclosed and determine whether it will join in the lawsuit. The DOJ can, and often does, request the court grant extensions to give it more time to investigate. It is not unusual for a complaint to remain under seal for as long as two to three years before the DOJ makes a decision. However, a relator does have the right to challenge extension requests and to have the seal lifted. Once a complaint is filed, the DOJ will assign the case to an investigative agency that has jurisdiction over the allegations. During the period of time the complaint is under seal, the Government investigators will conduct a preliminary investigation based on the information disclosed by the relator. This usually includes a comprehensive interview of the relator and review of relator's records if any exists. It also will include interview of any corroborative witnesses, review of appropriate government records and interviews of government officials. The investigation can also be expanded to include obtaining and reviewing the records of the de

apped this year when Disaster Preparedness guidelines, corporate financial forecasts, the signatory obligations imposed by the National Response Plan (NRP) and the mandates of the National Incident Management System (NIMS) collided.

Last year a High Alert, LLC white paper had raised the specter of NRP/NIMS compliance being linked to CMS (Medicare, Medicaid and Tricare) billing, the discussion had been strictly theoretical. Several federally funded training programs have now brought to the table a new and ominous implication of the NIMS Integration Center Implementation Plan for Hospitals and Healthcare. Additionally, hospitals have reported being informed that disaster preparedness will be linked to CMS reimbursement (Medicare, Medicaid and Tricare payments).

This is the first step in a progression that, if followed by CMS, Department of Health and Human Services (DHHS), Department of Homeland Security (DHS) and Department of Justice (DoJ), will put the full weight and power of the federal government behind an unfunded mandate for hospital preparedness. An appreciation how CMS and DoJ have handled dealt with healthcare providers who have run afoul of these agencies in the past 18 months may portend the future.

In early 2006, DoJ instituted a change in how it dealt with Medicare, Medicaid and tricare fraud. In prior years, these issues were typically dealt with as civil issues with civil penalties and restitution. Most offenders plead "guilty" or "no contest" to the charges, paid a fine and went home. Beginning in early 2006, DoJ began using the "guilty" plea from the civil cases as evidence to prosecute these individuals criminally. The type of insurance fraud spanned the gambit from billing for nonexistent patients to billing more than the documentation would support. It is this latter prosecution that is the cause of concern.

NRP and NIMS regulations are promulgated upon all signatories to NRP/NIMS, including DHHS. As signatories, all government agencies agree to promulgate the requirements of NRP/NIMS upon all their agencies/departments. Since DHHS is a signatory, this would include CMS (Medicare, Medicaid, Tricare). Since a all healthcare providers who bill CMS directly or indirectly are regulated by CMS and have independent contractor status with CMS, the requirements and regulations promulgated upon CMS by NRP/NIMS through DHHS are passed down to those contractors. This is affirmed by every healthcare provider every time they bill CMS on a UB92, CMS1500 or electronic equivalent because these forms include the attestation that the healthcare provider is in compliance with all regulations and requirements of CMS and the program billed.

It is this last fact that opens the door for DoJ to involve itself in hospital preparedness. Through their actions in 2006, DoJ has shown the willingness to criminally prosecute healthcare providers for overt insurance fraud. Signing the CMS attestation when not in compliance with NRP/NIMS is the same as signing the attestation that chart documentation is in compliance with CMS documentation standards. In short, the failure to be all hazards prepared may have just been raised to the level of a federal felony, enter Qui Tam.

Basically, a Qui Tam ("He who sues on behalf of the king as well as for himself") is a provision of the Federal Civil False Claims Act that allows a private citizen to file a suit in the name of the U.S. Government charging fraud by government contractors and other entities who receive or use government funds, and share in any money recovered.

A private citizen, called a realtor, can file a complaint in the U.S. District Court with jurisdiction over the case. The complaint is filed “under seal,” that is, confidentially. Once a complaint is filed, the Department of Justice (DOJ) has 60 days to investigate the information disclosed and determine whether it will join in the lawsuit. The DOJ can, and often does, request the court grant extensions to give it more time to investigate. It is not unusual for a complaint to remain under seal for as long as two to three years before the DOJ makes a decision. However, a relator does have the right to challenge extension requests and to have the seal lifted. Once a complaint is filed, the DOJ will assign the case to an investigative agency that has jurisdiction over the allegations. During the period of time the complaint is under seal, the Government investigators will conduct a preliminary investigation based on the information disclosed by the relator. This usually includes a comprehensive interview of the relator and review of relator's records if any exists. It also will include interview of any corroborative witnesses, review of appropriate government records and interviews of government officials. The investigation can also be expanded to include obtaining and reviewing the records of the d

e future.

In early 2006, DoJ instituted a change in how it dealt with Medicare, Medicaid and tricare fraud. In prior years, these issues were typically dealt with as civil issues with civil penalties and restitution. Most offenders plead "guilty" or "no contest" to the charges, paid a fine and went home. Beginning in early 2006, DoJ began using the "guilty" plea from the civil cases as evidence to prosecute these individuals criminally. The type of insurance fraud spanned the gambit from billing for nonexistent patients to billing more than the documentation would support. It is this latter prosecution that is the cause of concern.

NRP and NIMS regulations are promulgated upon all signatories to NRP/NIMS, including DHHS. As signatories, all government agencies agree to promulgate the requirements of NRP/NIMS upon all their agencies/departments. Since DHHS is a signatory, this would include CMS (Medicare, Medicaid, Tricare). Since a all healthcare providers who bill CMS directly or indirectly are regulated by CMS and have independent contractor status with CMS, the requirements and regulations promulgated upon CMS by NRP/NIMS through DHHS are passed down to those contractors. This is affirmed by every healthcare provider every time they bill CMS on a UB92, CMS1500 or electronic equivalent because these forms include the attestation that the healthcare provider is in compliance with all regulations and requirements of CMS and the program billed.

It is this last fact that opens the door for DoJ to involve itself in hospital preparedness. Through their actions in 2006, DoJ has shown the willingness to criminally prosecute healthcare providers for overt insurance fraud. Signing the CMS attestation when not in compliance with NRP/NIMS is the same as signing the attestation that chart documentation is in compliance with CMS documentation standards. In short, the failure to be all hazards prepared may have just been raised to the level of a federal felony, enter Qui Tam.

Basically, a Qui Tam ("He who sues on behalf of the king as well as for himself") is a provision of the Federal Civil False Claims Act that allows a private citizen to file a suit in the name of the U.S. Government charging fraud by government contractors and other entities who receive or use government funds, and share in any money recovered.

A private citizen, called a realtor, can file a complaint in the U.S. District Court with jurisdiction over the case. The complaint is filed “under seal,” that is, confidentially. Once a complaint is filed, the Department of Justice (DOJ) has 60 days to investigate the information disclosed and determine whether it will join in the lawsuit. The DOJ can, and often does, request the court grant extensions to give it more time to investigate. It is not unusual for a complaint to remain under seal for as long as two to three years before the DOJ makes a decision. However, a relator does have the right to challenge extension requests and to have the seal lifted. Once a complaint is filed, the DOJ will assign the case to an investigative agency that has jurisdiction over the allegations. During the period of time the complaint is under seal, the Government investigators will conduct a preliminary investigation based on the information disclosed by the relator. This usually includes a comprehensive interview of the relator and review of relator's records if any exists. It also will include interview of any corroborative witnesses, review of appropriate government records and interviews of government officials. The investigation can also be expanded to include obtaining and reviewing the records of the d

healthcare provider every time they bill CMS on a UB92, CMS1500 or electronic equivalent because these forms include the attestation that the healthcare provider is in compliance with all regulations and requirements of CMS and the program billed.

It is this last fact that opens the door for DoJ to involve itself in hospital preparedness. Through their actions in 2006, DoJ has shown the willingness to criminally prosecute healthcare providers for overt insurance fraud. Signing the CMS attestation when not in compliance with NRP/NIMS is the same as signing the attestation that chart documentation is in compliance with CMS documentation standards. In short, the failure to be all hazards prepared may have just been raised to the level of a federal felony, enter Qui Tam.

Basically, a Qui Tam ("He who sues on behalf of the king as well as for himself") is a provision of the Federal Civil False Claims Act that allows a private citizen to file a suit in the name of the U.S. Government charging fraud by government contractors and other entities who receive or use government funds, and share in any money recovered.

A private citizen, called a realtor, can file a complaint in the U.S. District Court with jurisdiction over the case. The complaint is filed “under seal,” that is, confidentially. Once a complaint is filed, the Department of Justice (DOJ) has 60 days to investigate the information disclosed and determine whether it will join in the lawsuit. The DOJ can, and often does, request the court grant extensions to give it more time to investigate. It is not unusual for a complaint to remain under seal for as long as two to three years before the DOJ makes a decision. However, a relator does have the right to challenge extension requests and to have the seal lifted. Once a complaint is filed, the DOJ will assign the case to an investigative agency that has jurisdiction over the allegations. During the period of time the complaint is under seal, the Government investigators will conduct a preliminary investigation based on the information disclosed by the relator. This usually includes a comprehensive interview of the relator and review of relator's records if any exists. It also will include interview of any corroborative witnesses, review of appropriate government records and interviews of government officials. The investigation can also be expanded to include obtaining and reviewing the records of the d

jurisdiction over the case. The complaint is filed “under seal,” that is, confidentially. Once a complaint is filed, the Department of Justice (DOJ) has 60 days to investigate the information disclosed and determine whether it will join in the lawsuit. The DOJ can, and often does, request the court grant extensions to give it more time to investigate. It is not unusual for a complaint to remain under seal for as long as two to three years before the DOJ makes a decision. However, a relator does have the right to challenge extension requests and to have the seal lifted. Once a complaint is filed, the DOJ will assign the case to an investigative agency that has jurisdiction over the allegations. During the period of time the complaint is under seal, the Government investigators will conduct a preliminary investigation based on the information disclosed by the relator. This usually includes a comprehensive interview of the relator and review of relator's records if any exists. It also will include interview of any corroborative witnesses, review of appropriate government records and interviews of government officials. The investigation can also be expanded to include obtaining and reviewing the records of the defendant through the subpoena process. Once the preliminary investigation is completed, the results are analyzed by the DOJ in order to determine whether it will join in the lawsuit.

The realtor has the right to share in any award granted under the Qui Tam action. The 1986 Amendment to the False Claims Act increased the relator's share of the award in qui tam actions. Prior to 1986, relators were not guaranteed any more than 10 percent of the award. The 1986 Amendment raised the relator's share to a minimum of 15 percent and a maximum of 30 percent. The implications for the corporate officers of a hospital go beyond just CMS fraud, civil penalties and imprisonment. Hospitals are now largely operated by public entities and thus file financial forecasts and financial statements. These forecasts are based on projected CMS reimbursements. If a facility is not NRP/NIMS compliant and “All Hazards” disaster prepared, the corporate officers are not only in danger of CMS fraud, but of projecting CMS reimbursements they know are not collectable, enter Sarbanes-Oxley.

The Sarbanes-Oxley (SOX) Act of 2002 represents landmark legislation in the world of corporate compliance, securities and capital markets, and overall organization governance and responsibility.

Public companies are required to comply with SOX and not-for profits are highly encouraged to voluntarily comply. Voluntary compliance with the legislation for not-for-profits would require

* Established formal governance over financial reporting and interaction with the Board of Directors, Audit Committee, and external financial auditors.
* CEOs and CFOs certify whether the company’s financial statements are true, complete, and fairly stated.
* CEOs and CFOs evaluate the effectiveness of the company’s disclosure controls and procedures and present their conclusions about the effectiveness in the annual filing.
* Management annually assesses and assert to the effectiveness of the company’s internal controls and procedures for financial reporting.

This last requirement, known as Section 404, has had one of the largest impacts on corporations in America. Companies impacted have initiated projects to document, assess the gaps over, remediate, and test the internal controls over financial reporting (ICOFR). In addition, each company must assert as to its findings resulting from this process and that the ICOFR are adequate within the parameters established by the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission (SEC).

Under the concept of Willful Blindness Board of Directors and Senior Management can not simply turn a blind eye to violations of the above referenced statutes with impunity. The doctrine of “willful blindness” is alive in well in the realm of corporate accountability. Willful blindness first appeared as a substitute for actual knowledge in English case law over a century ago. “The willful blindness doctrine permits a jury to find that a defendant, in this case our director or senior manager, has knowledge of the material facts because he has deliberately chosen to remain ignorant of illegal activity that would have been disclosed by further investigation.”

The willful blindness doctrine is primarily recognized by English authorities. "A classic illustration of this doctrine is the connivance of an innkeeper who deliberately arranges not to go into his back room and thus avoids visual confirmation of the gambling he believes is taking place.” The willful blindness doctrine requires the government to establish that the actor had a conscious purpose to avoid enlightenment. “Additionally, willful blindness requires proof that the actor took deliberate actions to prevent the obtaining of actual knowledge of the facts.”

The cost to a hospital or healthcare facility for initial immersion simulation training and a full “Crawl-Walk-Run” community disaster drill is $120,000 to $180,000. The corporate officers of a hospitals or healthcare facility cannot reasonable claim the inability to know that their facility had not spent the money required to be NRP/NIMS compliant. This willful blindness constitutes the requisite knowledge of guilt for a successful Qui Tam and Sarbanes-Oxley claim.

Disaster preparedness is no longer just an accreditation issue. “All Hazards” disaster planning is no longer just a requirement of qualifying for federal grants. Education is no longer a last priority. Disaster planning, preparation and education are the newest legal shield for the healthcare corporate officer.

The Unprepared Beware.