Feeding frenzy.

Industry's misfortunes keeping lawyers busy

IF THERE IS ANY DOUBT THAT THE LONG term care industry is under siege, attendance figures for the American Health Lawyers Association's annual long term care conference in Orlando in February confirm the fact. Almost 500 lawyers packed sessions on defending False Claims Act actions, criminalization of the survey process, addressing and eliminating sources of potential liability from operations, and receivership and insolvency issues.

Buzz included anxiety about how bad things might get if the economy sours and state governments slash Medicaid rates. "There's stability now only because the economy is good and states aren't tinkering with their methodologies," says Joel Hamme, an attorney from Washington, D.C.

A hot topic: coping with severe cash flow problems. "A variety of facilities are either going through bankruptcy proceedings or contemplating that they might need to," says Robert Salcido, an attorney from Washington, D.C. "Our challenge as lawyers is to figure out what can he done on the legislative front, and to help facilities be better managed."

Salcido spoke on the False Claims Act, one of the most popular sessions. He attributed the high level of interest to two big-money settlements with Department of Justice that had lust come down the pike-one for $486 million with Fresenius Medical Care, a provider of kidney dialysis products and services, and the other for $175 million with Beverly.

Hamme says the criminalization of billing mistakes, especially when the "rules aren't entirely clear," has created a lot of work for lawyers. "Even civil sanctions are so severe that it's safer to settle than risk being excluded from the Medicare program."

PPS is also keeping lawyers busy. Consolidated billing is altering the contractual relationship between providers and their suppliers, notes Jefferson City, Mo., attorney Harvey Tettlebaum. "Then there's the insurance defense work, currently concentrated primarily in Florida and Texas, but expanding. The tort issue was heavily covered, at the conference."

The sessions on bankruptcy and receiverships were jumping, adds Tettlebaum. "It's a topic that has everyone concerned. Take the recent IHS Chapter 11 filing. A lot of people leased facilities to IHS or supplied services and products to them."

A lot of smaller facilities are in trouble as well-and they're more likely to go Chapter 7. "Many attorneys are representing single-facility operators who are financially distressed," says Hamme. "It's very possible that the day of the single-facility operator whose level of sophistication is not that great has come and gone."