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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. Do I have to hire an attorney to get co-guardianship of my brother? My father has guardianship and my older sister was his co-guardian until this Dec 2014 when she passed and my father was me to go on as the co-guardian, but funds are limit and we need to get this process taken care of quickly as our fathers health isn't the greatest. So please advise me if there is anyway to do this our self or if it requires a lawyer? Thank you

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  3. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  4. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  5. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

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