Jonesboro Doctors’ Did Nothing Wrong’

p>The five physician-owners of a Jonesboro pathology lab, facing a multimillion-dollar civil lawsuit by the U.S. government, may have gotten caught in the complex maze of Medicare regulations and interpretations.

The doctors — Don Vollman Jr., Joe Wilson, Robert Stainton Jr., Duke Jennings and Rick Ryals — owned and operated Doctors Pathology Services Inc. for 26 years before they sold it to a national laboratory in 1995. They are charged with conspiracy by the government for $1.3 million in alleged overbillings.

Because of a possible $10,000 penalty for each of about 135,000 alleged billing errors, the government technically is seeking more than $1.3 billion in the case.

In a motion for summary judgment filed last month, the doctors’ attorneys, David Ivers and Mike Mitchell, say, “Despite this huge and wildly out-of-proportion financial stick, and exclusion from participation in Medicare and Medicaid that likely would come with it, the defendants have chosen to fight this enormous pressure for one simple reason: They did nothing wrong.”

In spite of the possibility of a billion-dollar penalty, Doug Chavis, an assistant U.S. attorney, told Arkansas Business (“Jonesboro Lab Sued for Fraud,” July 28), “Essentially, we want our money back. That’s what we’re suing for.”

For the doctors, the case “has been far and away the most traumatic experience of our professional careers,” Wilson says. t

“We were just astounded that anything like this would happen, because we were so careful to always get expert advice,” the 60-year-old Wilson says. “To us, it was like the negative effect, as far as the publicity and the way the announcement was handled, was almost like we’d been convicted before we had a chance to tell our side.

“In short, many of us and our families were initially just devastated. Some even expressed concern about not being comfortable going out and facing people in public with this sort of thing hanging over our heads.”

The government first filed the lawsuit in December. According to one source, a press release was sent to newspapers and Jonesboro-area television stations at almost 5 p.m. the day the suit was filed. That left reporters little time to do much more than report on the information contained in the press release.

One Jonesboro television station had a reporter stationed in front of Doctors Pathology Services’ building and talking about the suit, leaving the impression that the doctors were guilty of some “dastardly deed,” the source says.

Systematic Argument

In a complicated, but very logical step-by-step argument, Ivers, with the Little Rock firm of Mitchell Blackstone & Barnes, presents Doctors Pathology’s side of the case in his motion for summary judgment.

Using statements of fact, Ivers argues that:

• The physician who orders tests and not the lab is responsible for making sure that there is a medical need before the test is ordered.

• The lab, and not the physician ordering the tests, does the billing for Medicare and Medicaid patients.

• Doctors Pathology hired James Root as a consultant and off-site manager to handle its billings. Root, who was originally sued but has settled with the government, changed Doctors Pathology’s billing into a two-tiered fee schedule. The lab gave a discount to doctors whose patients used an insurer because the doctor handled the billing. For Medicare and Medicaid patients, DPS charged a non-discounted retail price because it was responsible for the billing.

• New technology has allowed Doctors Pathology and other labs to run a group of chemical tests at the same time on one machine. Arkansas Blue Cross and Blue Shield, which handles payment of Medicare claims in the state, allows labs to run 26 tests on the machine and bill them.

• But some tests are not allowed to be run together, including iron, magnesium and HDL, the three tests at issue in the suit. Those tests can be billed separately.

Ivers and Mitchell have filed a copy of a 1979 letter Arkansas Blue Cross and Blue Shield sent to all Arkansas independent laboratories listing tests considered part of a battery profile. Any test not included in the battery listing should be itemized separately, the letter says.

Mitchell and Ivers note in the motion that the 1979 letter has never been repealed.

“I think we’ve got a very good chance on the motion for summary judgment,” Mitchell says.

Essentially, Ivers says, Doctors Pathology Services was told to bill the procedures just as it did.

‘No Medical Necessity’

Chavis, who says he expects to file a response Oct. 27 to the motion for summary judgment, declined to comment in detail about the case. But he says, “Their motion for summary judgment does not address whether the claims were false or of medical necessity.”

George Karpoff, administrator of Arkansas Blue Cross and Blue Shield’s Fraud and Abuse Unit, also declined to discuss the Jonesboro case specifically. But he says that much of the laboratory industry in the United States “pretty much abused their position as a biller, not only of the federal programs, but also of private insurers.”

He cites high-profile national companies that have settled cases with the government, including Smith-Kline, Corning Laboratories and National Health Lab.

All criminal charges that had been filed against the Jonesboro doctors have been dropped.

Wilson says the partners, who now own and operate Doctors Anatomic Pathology Services, have received support from throughout the Jonesboro area.

“The people that we work most closely with — our employees and the physicians we work with — never expressed any doubts whatsoever as to the fact that these charges were absolutely untrue and unfounded,” Wilson says. “That if there was any problem, it was either a misunderstanding or because of honest errors that were made in doing the billing.”>

‘No Medical Necessity’

Chavis, who says he expects to file a response Oct. 27 to the motion for summary judgment, declined to comment in detail about the case. But he says, “Their motion for summary judgment does not address whether the claims were false or of medical necessity.”

George Karpoff, administrator of Arkansas Blue Cross and Blue Shield’s Fraud and Abuse Unit, also declined to discuss the Jonesboro case specifically. But he says that much of the laboratory industry in the United States “pretty much abused their position as a biller, not only of the federal programs, but also of private insurers.”

He cites high-profile national companies that have settled cases with the government, including Smith-Kline, Corning Laboratories and National Health Lab.

All criminal charges that had been filed against the Jonesboro doctors have been dropped.

Wilson says the partners, who now own and operate Doctors Anatomic Pathology Services, have received support from throughout the Jonesboro area.

“The people that we work most closely with — our employees and the physicians we work with — never expressed any doubts whatsoever as to the fact that these charges were absolutely untrue and unfounded,” Wilson says. “That if there was any problem, it was either a misunderstanding or because of honest errors that were made in doing the billing.” n

Headline: Complying With Confusing Rules Called Almost Impossible

In the past year, the federal government has cracked down on thousands of hospitals and clinics it claims have fraudulently taken about $23 billion a year from Medicare for incorrect billings. But many in the medical community insist that fraud is not the basis for the mistakes.

The Medicare code, which consists of hundreds of pages of regulations, is “so complicated and so ever-changing that it is almost impossible to comply,” says Lynn Zeno, director of governmental affairs with the Arkansas Medical Society.

In a recent commentary in The Wall Street Journal, author James V. DeLong calls the Medicare reimbursement rules “complex and quixotic.”

DeLong says, “Every sensible [health care] company sets up reserves against disallowance [for some Medicare claims].”

“Statutes can run on for hundreds of pages of detail and are enforced by volumes of convoluted administrative regulations and even greater piles of interpretations, guidelines and exceptions,” DeLong says. “It is often impossible for anyone to fully know the law, even with the best of intentions.”

Barry Corkern, a Little Rock financial consultant who has had the Doctors Pathology Services doctors as clients for 15 years, says there was a major change in the early 1980s with how clinics and hospitals were looked at by Medicare and later the insurance companies.

“These guys in Jonesboro are respected nationally and in the state,” Corkern says. “They are used by the Board of Pathologists to test the veracity of other labs.

“But things got so complicated and so difficult that you had to hire a consultant to handle Medicare billing.”

Beginning at that time, Corkern says, doctors would meet with government officials and discuss the meaning of the regulations. Even today, Corkern says, virtually every doctor in the country is probably confused by Medicare regulations, which he says make the income tax code look like “a cake walk.”

“Logic would say this is how you interpret this rule and it would be accepted universally throughout the industry,” Corkern says. “Then two or three years later the government comes along and says, ‘No this is not how we interpret it.’

“So then the interpretation is, ‘Hey, you guys have defrauded us.’ And that is not the way it was at all.” n

tttttttttt— DAVID SMITH