Taxpayer-supported Broward Health has paid $10.2 million so far for legal advice about how to deal with an ongoing federal investigation into allegations that it colluded with doctors to submit tens of millions of dollars in bogus claims to Medicare and Medicaid.
Broward Health, also known as the North Broward Hospital District, quietly spent those millions even though federal authorities have yet to level a single public accusation of wrongdoing against it.
The money went to the Washington, D.C., law firm Arent Fox, which was retained shortly after the U.S. Department of Health and Human Services subpoenaed documents relating to Broward Health’s contracts with 27 prominent doctors and one physicians’ group practice on May 16, 2011. Since then, the district has turned over millions of pages of business records to federal authorities.
Broward Health records obtained by FloridaBulldog.org using Florida’s public records law show that from mid-2011 through 2014 a total of 19 Arent Fox lawyers billed the district at rates ranging from $420 to $550 an hour. More than a dozen of the firm’s paralegals and support staff also billed at rates as high as $275 an hour.
Likewise, Broward Health picked up the tab for tens of thousands of dollars of the law firm’s costs, including scanning and copying charges, airline tickets and seat upgrades, hotels, meals and taxis in South Florida and Washington. One big cost: $16,700 to scan 155,000 pages of documents.
No item was small enough to escape inclusion on Arent Fox’s multi-page invoices: a charge for a tenth of an hour to read an email; $3.35 for a Starbucks latte; $1.99 for a bag of M&M candy peanuts picked up at Palm Beach International Airport.
The payments, and many others, were approved by then-Broward Health Chief Executive Officer Frank Nask. Nask retired late last year and now has a one-year consulting contract with Broward Health at his old annual salary, $625,000.
Broward Health CEO Nabil El Sanadi and General Counsel Samuel Goren declined to comment for this story.
Leading Broward Health’s defense team are Arent Fox partners Linda Baumann and D. Jacques Smith, who specialize in matters involving the False Claim Act. Baumann also counsels clients about the requirements of two other laws that figure prominently in the Broward Health probe: the federal Stark Law and the Anti-kickback Statute.
The Stark law generally prohibits physicians from referring Medicare or Medicaid patients to hospitals with which they have a financial relationship as well as hospitals from submitting claims for prohibited referrals. Violators face civil penalties of up to three times the amount claimed.
The Anti-Kickback Statute prohibits offering, paying or soliciting or receiving anything of value to induce or reward referrals or generate federal health care program business. Criminal violators face prison for five years and a $25,000 fine for each violation, plus hefty civil assessments.
Broward Health is the county’s largest provider of healthcare services, a nonprofit medical safety net providing services regardless of the ability to pay for the northern two-thirds of Broward County. The flagship of its 30 healthcare facilities is Fort Lauderdale’s Broward Health Medical Center, formerly known as Broward General.
Little information has been released publicly about the government’s investigation of Broward Health since the HHS subpoena sought information about more than two dozen physicians, including medical directors at Broward Health’s lucrative orthopedic, sports medicine and cardiology practices.
The probe, however, is rooted in a secret whistleblower lawsuit filed against Broward Health by someone alleging violations of the federal False Claims Act. The Justice Department, in this case the Miami U.S. Attorney’s Office, is obliged by law to investigate.
Broward Heath Board chairman David Di Pietro has said publicly that the district has a potential liability of $100 million in civil penalties.
As a result, the district’s governing board has changed the way it does business. For example, the board of directors in June approved a new “matrix of compensation” that seeks to make its physician compensation practices “commercially reasonable.”
More than a dozen Broward Health doctors have signed new agreements under the matrix rules intended to assure compensation based on “fair market value.”
One of those doctors was Michael A. Chizner, chief medical director of Broward Health’s Heart Center of Excellence.
Chizner has been paid $6.9 million since 2009, including $1.2 million last year. His earnings were more than double the national average for “invasive-interventional cardiologists. But in December, after hiring former U.S. Sen. George Lemieux in an effort to resist, Chizner signed a new five-year deal that reduced his pay this year to a maximum of $867,000.
Neither Broward Health nor the government has commented on the status of the federal investigation. When the probe is complete, however, the government must decide whether to intervene to prosecute the case, decline to prosecute or move to dismiss the case. The case is also unsealed.
The person who filed the lawsuit, known as the relator, stands to collect a reward of up to 25 percent of whatever the government recovers.
The pace of behind-the-scenes maneuvering by Broward Health’s board of directors has quickened in recent months, suggesting the federal investigation may be nearing an end.
At least four times since June, Broward Health’s board has held private “shade” meetings to discuss a possible settlement. Shade sessions are by law exempted from the state’s open government Sunshine law, and are closed to the public.
Florida Bulldog is a not-for-profit news organization created to provide investigative reporting in the public interest. Contributions are tax-deductible. www.floridabulldog.org
Here are the payouts Broward Health has made to lawfirm Arent Fox: