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Krieg DeVault lawyer builds national practice from northern Indiana office

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Robert Wade took it as a challenge when a colleague told him a few years back he’d never be able to launch a national health care practice from the South Bend market, that instead he would need a Chicago or Washington, D.C., address.

“I said, ‘You watch me,’” Wade recalled.

A partner in Krieg DeVault LLP’s South Bend/Mishawaka office, Wade and his team last month were hired as consulting counsel to a Florida hospital that agreed to a historic settlement in March to resolve federal physician-referral claims under the Stark Law.

Bob-Wade-at-Halifax-15col.jpg Mishawaka attorney Robert Wade stands outside Halifax Health Medical Center in Daytona Beach, Fla. His team from Krieg DeVault LLP has been contracted to oversee the largest settlement in history under the Stark Law (Photo courtesy of Halifax Health)

“It’s the largest settlement for a hospital to date” under the law, Wade said of the $85 million agreement with the Department of Justice by Halifax Health Medical Center of Daytona Beach, Fla. “We’re treading in a bunch of new ground, so to speak, and I’m happy to be a trailblazer in respect to this role.”

It’s confirmation that a small-town practice can hit the big time.

“I would estimate over a five-year period we’re probably talking somewhere around $3 to $4 million” in billings for the team of six or seven attorneys. “Obviously it is a significant engagement.”

The Stark Law involves Medicare and Medicaid and generally bars physicians from referring those patients for designated services to an entity where the doctor or a family member has a financial relationship, either as an owner or employee.

A Halifax compliance officer filed a qui tam whistleblower suit after she said her concerns about payments to physicians were being ignored. She claimed a bonus structure for oncologists included incentives for referrals that violated the Stark Law, and earlier this year a federal judge in Orlando agreed.

The government alleged Halifax had contracts with six oncologists that provided bonuses as an incentive for ordering prescription drugs and tests. The government also claimed Halifax paid neurosurgeons more than fair-market value for their services.

As part of the settlement, Halifax is required to be under federal oversight for five years in accordance with a corporate integrity agreement. Wade will work with the hospital’s board to implement the agreement and oversee compliance programs.

According to the Department of Justice, the settlement requires the hospital to undertake substantial internal compliance reforms and submit Medicare and Medicaid claims for independent review over the next five years.

“Part of my role is to be the eyes and ears of the board as they’re carrying out their mandated programs,” Wade said. The first part of the compliance program that began this month involves training for all members of the medical staff on practices that could run afoul of the Stark Law, Anti-Kickback Statute and related laws. Training is highly tailored and individualized.

Halifax chose to settle rather than contest the alleged violations in court, which could have resulted in risking liability of more than $800 million. By the time of settlement, Halifax had spent more than $20 million in legal fees, he said.

“Stark produces what I call very Draconian outcomes,” Wade said. “This is a hyper-technical violation,” he said of the doctors’ bonus pool that got the hospital in trouble. The Halifax settlement, and some even larger judgments against providers for Stark violations “are really putting a chilling effect on the entire industry.”

“Lots of hospitals are doing a review of financial arrangements,” Wade said. Providers realize they can avoid some of the more severe penalties by self-reporting referral structures and other arrangements they believe might violate the Stark Law.

Krieg DeVault Executive Committee member Thomas Hutchinson said Wade’s practice underscores the firm’s commitment to having a nationally recognized health care practice.

“We are very honored that Bob was chosen as the compliance expert to Halifax Health to assist in fulfilling the hospital’s corporate integrity agreement as part of the largest Stark Law settlement in history. Bob’s strong national reputation in the area of Stark Law and health care compliance is a natural fit for the hospital,” Hutchinson said.

Wade said more than a couple dozen firms competed for the Halifax consulting work. As someone who’s written and lectured extensively on Stark and related laws and is viewed as a thought-leader on such topics, he said, “I was watching the case from afar” before his team was selected.

With prior experience as in-house counsel at St. Joseph Regional Medical Center in South Bend and assurance he would be the Halifax board’s point person, Wade had a winning proposal. “One of the board members questioned me and said, ‘Are we hiring you or hiring the people from your firm?’”

Wade said he replied, “I am going to be front and center. I’m going to be the face for this project.”

The Krieg DeVault group’s clients now include about 25 hospitals around the country for the practice focused largely on Stark Law and fair-market value issues. Wade is in high demand, currently traveling to Daytona Beach at least a couple of times a month.

And now, he’s got about as far-flung a national practice as one can get.

“Two weeks ago, as I left Daytona Beach, I flew to Honolulu for a one-day meeting in Honolulu and flew back,” he said in early June. “So far, since Jan. 1, I’ve logged about 75 nights in a hotel room.

“To have a national practice, that’s something you have to commit to,” he concluded.•

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Stark Law at a glance
Who: Named for Rep. Pete Stark (D-Calif.) Also known as the Physician Self-Referral Law.
What: Prohibits a physician from referring Medicare or Medicaid patients to an entity for a designated health service if the doctor has a financial relationship with the entity.
When: “Stark I” effective 1992; “Stark II” effective 1994.
Penalties: Civil penalties for violations can range up to $15,000 per billed medical service provided in violation of the law. Providers may be excluded from Medicare.
Citations: 42 U.S.C. § 1395nn (as relates to Medicare); 42 U.S.C. 1396b(s) (Medicaid).

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

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  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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