Look for creative solutions to comply with the law.

Complete the Business Transactions Resource and Compliance Matrix (Attached)

• Business Transactions Resource and Compliance Matrix (Word Document)
• Individually: Complete the matrix.

Use only classroom materials to complete the matrix. This would include  the textbooks, web links, and the Classroom law library, and Compliance library.

Write in complete sentences except for the law and code section, risk assessment, and role identification sections.

Code citations should follow the following format:

• 42 U.S.C. § 1920 (2021)

Maryland Code  § 29-405 (2021).

Regulations should following the following format

42 C.F.R. § 518 (2021)

Code of Maryland Regulations (COMAR) 01.02.1985.01

See Compliance Library directly on the left side of the classroom and   review “People as Resources for health care compliance.”

Take time to formulate good questions that will lead to a positive response.

• Look for creative solutions to comply with the law.
• Support your responses with strong reasons.

People in Health Care as a Resources for Compliance Corporate Personnel Tip: Start at the lowest level of the organization and work your way up the chain of command. • • • • • • • • • • • • • • • • • Corporate Board of Directors – The senior officers of the company who are responsible for strategic decision making for the organization Chief Executive Officer (CEO) – The person who oversees the hospital or managed care organization, or other health care organization. Legal Counsel – A licensed attorney with experience in health care laws who works for the hospital or health care organization. Corporate Compliance Officer (CCO) – The person responsible to ensure compliance to all laws throughout the organization. Chief Information Officer (CIO) – The executive who oversees information technology for the organization. Chief Information Security Officer – The executive responsible to develop information technology security practices. Chief Medical Officer (CMO) – The doctor who oversees all clinical decision making within the organization. Clinical Nursing Officer (CNO) The chief nursing executive within the organization. Chief Business Development Officer (CBDO) – The executive who oversees new business opportunities and growth for the organization. Head of Medical staff – The doctor who oversees physicians within the organization. Chief Financial Officer (CFO)- The senior official in the organization who oversees all financial transactions. Clinical Specialists – People with clinical expertise in a certain area who can provide expert opinion on clinical issues such as infection, ethics, cardiac, skeletal, and/or other specific issues.. Human Resources professional – The person who coordinates recruiting, hiring, onboarding, training, employee reviews, corrective action plans, and terminations with employees. Union Representative – In a union environment, the person from the union who may represent employees when issues arise with management. Health Information Technology (HIT) Manager – A manager responsible for meeting all technology requirements and laws. Compliance Committee Chair – The person who oversees the committee focused on ensuring corporate compliance. Ethics Committee Member – A member of the organizations ethics committee that focused on ethical decision making. • • • • • • • • • • • Institutional Review Board (IRB) member – A person who is part of the Institutional Review Board for the Organization. Risk Manager – The person who works to identify, prevent, and correct risk within the organization. Risk Management Committee Chair – The person who oversees the risk management committee to manage and reduce organizational risk. Privacy Compliance Officer – The person responsible for HIPAA privacy and security compliance within the organization. Contracts Manager – The person responsible for vendor and/or contracting in the organization. Corporate forms and templates – Documents used by the organization to admit, register, and discharge patients, document treatment, or remind patients of rights or obligations. Credentialing Manager – The person responsible to overseeing credentialing of physicians, nurse practitioners, physician assistants, and other health care professionals within the organization. Nurse Manager – The nurse who oversees other nurses on a specific unit of care. Patient Liaison Manager/Ombudsman – The person who oversees those working with patients to ensure that they have a positive outcome and experience with patient care. Billing Supervisor – The person who oversees the day to day billing operations of the organization Auditor – A person within the organization who conducts internal audits of billing and/or other compliance to assess how well the organization is doing and to determine where improvement is needed. Government Employees as Resources Tip: Start within the company before going to outside resources. • • • • • • Health care attorney – An attorney with specialty experience in health care. State licensing agency personnel – An administrator in the state licensing department. State Certificate of Need agency personnel – An administrator in the state Certificate of Need department. State Corporations agency personnel – An administrator in the state department of Corporations who regularly licenses businesses. State Tax Commission employees – State tax agency personnel familiar with corporate taxation in the state for non-profit and for -profit organizations. State Insurance Commission employees- The state health insurance employees that oversees state health insurance compliance. • • • • • • State Department of Health (DOH) employees – The employees who oversee health requirements in the state including infectious disease, and other reporting and compliance. State Medicaid Department personnel – The state Medicaid employees who handle day to day Medicaid issues. IRS tax hotline employees – A phone link to an IRS representative with training on taxes. CMS Recovery Audit Contractors (RAC) auditors – Auditors who work on behalf of CMS to audit health care organization billings to see if payments were proper National Institutes of health Guidelines for stem cell research – Guidelines that set the parameters for stem cell research. Employment Private Community Resources • • Health Law attorney – An attorney outside of the company with expertise in health law. Clinical Experts in the Community – Clinical experts who may be available for consultation when a specific issue requiring certain expertise arises. Business Transactions Resource and Compliance Matrix Name: Date: Health care business situations The Law and Code Section 1. Your organization just hired a physician from out of state. The physician will need to become licensed in your state of Maryland. As an administrator, you have been asked to oversee the process to ensure the physician obtains a valid Maryland license to practice medicine. 2. You were reviewing the new physician contract and see that the physician will be paid a flat salary with bonuses from the hospital for increasing hospital admissions. State licensing law Federal Antikickback Statute (AKS) Legal requirements and Penalties for non-compliance with the Law Risk Role of Assessment Person who can be a Low resource for Medium compliance High (Give (Give reasons to reasons to support support your choice) your rating) A question you would ask the resource person to help you better know how to comply with the law A managerial action you would take to comply with the law (Give reasons to support your action) 3. Your managed care organization (MCO) wants to build a new hospital and 2 new rehabilitation centers in your state of Maryland. You are asked to spearhead the project. 4. You oversee the medical billing department. The billing manager responsible for day to day activities was out of the office for 6 months on a disability leave. The manager has just returned and discovered that the coders billed everything at the highest level of service whether there was documentation to support it or not during the 6 months the manager was gone. 5. Your hospital wants to expand and buy out a physician group in a nearby town. The physicians would become employees of your hospital. 75% of the physicians in your town and the nearby would be employed by your hospital when the venture is complete. 6.You are responsible for the profit/loss statements for your budget area each month. The Vice President over your area State Certificate of Need Federal False Claims Act (FCA) Notice of Overpayment Rules Federal Antitrust law Joint Venture Guidelines Federal Sarbanes Oxley Act (SOX) just asked you to ”improve” the numbers to show a profit even though the numbers show a loss. You have been told that the VP owns 60% of the shares of stock for your public corporation. 7. You are an entrepreneur and want to open up a home health company in Maryland. You want to be incorporated under Maryland law and operate as Home Care Inc. 8. You work for a family practice physician clinic. Two of the physician owners are also part owners of a nearby durable medical equipment (DME) store and a clinical lab. All physicians in the organization regularly refer patients to the DME store and clinical lab. 9. Your hospital is a non-profit organization and doesn’t pay taxes. The billing company at your hospital just sent word that it sent 50 unpaid claims to collections. You wonder if this should be considered charity care instead. 10. You work for a large health insurance company. The company wants to start a Conflict of Interest State Incorporation Law Federal Physician SelfReferral Law (Stark) Federal Internal Revenue Service (IRS) tax law Federal Health Insurance disease management program for its members by contracting with a national pharmaceutical to run the disease management program. Portability and Accountability Act (HIPAA) Business Associate Regulations Beyond Alternative Telling Stories: How Alternative Dispute Resolution Could Have Saved Costs and a Business Relationship by Joan D. Hogarth Joan D. Hogarth is an experienced neutral with substantive legal experience in health care and in assisting seniors to navigate the legal landscape. Hogarth has arbitrated over 250 consumer and securities cases and approximately 55 mediations to include Storm Sandy cases. She may be reached at jayhogarth12@gmail.com. It is worthwhile for alternative dispute resolution (ADR) professionals to explore how ADR can effectively and efficiently resolve issues and save the relationship. For example, when two business partners and friends became so embroiled in a complex weave of lawsuits that a judge would characterize them as “bitterly litigated cases,” alternatives to litigation may well have mitigated the toll on the parties’ business relationship. We begin in 2005, when one of the parties invested in property in what was once a “seedy” part of New York City—the Bowery. After carefully considering his options, the investor decided on developing a hotel complex, including residential units on the top three floors and the roof. Lacking any experience in this area, the party brought in a boutique hotel expert to design and operate the project. A dispute arose around 2011 when one party alleged that the other was blocking the exercise of a right agreed to at the inception of the project. A series of lawsuits, motions, and court appearances followed; seven years later, the matter remains in the New York Supreme Court with no scheduled hearing date. The story I am about to tell was gleaned from news articles, podcasts, and publicly available court documents.1 It demonstrates the costs in time, money, and relationships in a business dispute that was strictly about money with no stated desire to set legal precedents in contract law or civil procedure. It may have begun with a simple lawsuit, but today there have been more than half-a-dozen lawsuits filed directly or derivatively connected to the underlying issues of contract interpretation and breach. I highlight some of the major elements of ADR that are implicated in the case; for example, pre-dispute ADR clauses, willingness of parties to participate in ADR, confidentiality, cost savings, speedier resolution, and more importantly, salvaging an otherwise good business relationship. The Story In the early 2000s, Gerald Rosengarten purchased adjoining properties in the Bowery with the expectation 12 • THE FEDERAL LAWYER • December 2017 to take advantage of gentrification taking place in the vicinities. He contemplated many uses and eventually settled on a hotel project. Recognizing his limitations, he invited Richard Born, a famous hotelier known for inventing the boutique hotel concept. Born brought in his experts. The partners were to focus on design and operation of the hotel—The Bowery. In 2005, Rosengarten and John Ruha formed Ruandro LLC, with each owning 50 percent interest in the company. The only asset of Ruandro was the sublease to three floors and the roof of The Bowery Hotel. To participate in Ruandro, Ruha borrowed $2 million from Rosengarten and pledged his 50 percent interest as security in the event of a default. The default would essentially turn the management and decision-making of Ruandro over to Rosengarten. The Bowery Hotel was managed by Three on Third LLC (TOT), in which Rosengarten and Ruha were members. TOT was part of the project because it is known for its excellence in hospitality operations. There were other partners in TOT, most important for this story, the aforementioned Born. Rosengarten had a 12 percent equity stake in TOT and would be paid a percentage of the profits from the hotel operations. He, through Ruandro, also owned the sublease for the top three floors and roof of the hotel and the roof and the rights to convert such property into condominiums for sale, if and when the land (the ground lease) was bought by the company. With the death of the land owner and the land now available for sale, Rosengarten/TOT could fulfill a condition precedent to Rosengarten’s rights to convert the top floors into condominiums for sale. Rosengarten alleges that Born undermined the agreement, and instead of purchasing the land through TOT, he circumvented the agreement and purchased it directly thereby blocking the conversion. A series of related disputes followed: the defaulted $2 million loan to Ruha, a $50 million lawsuit against Born for allegedly blocking Rosengarten from exercising his rights to convert the apartments, a $1.5 million lawsuit representing the unpaid profits from Rosengarten’s 12 percent stake in TOT, interpleaders and motions to dismiss the $50 million lawsuit, and other shareholder derivative lawsuits. Suitable ADR Processes Business disputes are well-suited for ADR and the Ruandro case is no exception because of the complexities and interrelation of the disputes, the ongoing delays, costs of discovery, and the costs associated with legal fees for the five law firms and counting that have been involved, as well as broken business relationships. In fact, it’s an ideal case for ADR. Negotiation Negotiation, as an ADR tool, could have been used. From all accounts, it may have been attempted over “Scotch,” per Born. For the negotiation to advance, there has to be a high degree of willingness and some level of trust of the parties. The parties willingly come together to arrive at an agreement with which they can live. The process and outcome are confidential. Mediation If negotiation fails to produce a desired result, the next ADR process that could be successful would be mediation. Mediation is a facilitated negotiation where a trained and skilled third-party neutral serves as the “interpreter” of interests, feelings, and objectives in the negotiation. A California court describes mediation as: … [being] particularly useful when parties have a relationship they want to preserve. So when family members, neighbors, or business partners have a dispute, mediation may be the ADR process to use. Mediation is also effective when emotions are getting in the way of resolution.2 The outcome of the mediation session—or sessions—frequently is a creative, confidential agreement arrived at by the parties. The mediator might open and close the session, which includes decision-makers for all parties, with a joint meeting that allows the parties to summarize their position, and in the end, to come to an agreement. Like the negotiation, mediation is confidential and it is the most conducive for preserving relationships since the parties control the negotiations and ultimate agreement; the sessions also allow high emotions to be tempered. Mediation may include the exchange of information. The mediator facilitates the discussion of issues and the exploration of possible solutions in joint sessions and, where useful, in caucuses with each party. Mediation is a particularly attractive ADR process because it easily can be tailored to the needs and characteristics of the parties and the demands of the subject matter. The parties discussed herein may have been ripe for mediation very early in the process and could have used mediation at any time. Early Neutral Evaluation Mediation is usually voluntary, and parties may continue to take the path of litigation because they feel they will win. This is where another ADR process could be helpful. In early neutral evaluation, the parties present the merits of their case and answer questions of a highly qualified evaluator who will provide a nonbinding decision and a range of awards. The evaluator is an expert who is able to identify the hot spots, the risks, and the likelihood of success. Oftentimes, hearing what a case is worth and understanding the possible pitfalls and the associated risks, parties who may have taken intractable positions are then able to rethink their positions. The evaluator’s decision is nonbinding and the session is confidential. Arbitration Finally, the parties could be directed to arbitration. Arbitration is much like litigation in that a “private judge” listens to the arguments, reviews evidence, and unilaterally makes a decision. Arbitration is consensual, and, if included in an agreement, one party cannot unilaterally withdraw from the process. The parties, for the most part, are bound by the decision and have no right of appeal, even though, under very limited circumstances, they may attempt to vacate an arbitral award. Where ADR Could Have Saved Costs and Business Relationships Agreements Prior to the dispute and in the contract formation, it would have been a best practice to include a provision for dispute resolution. Despite its absence from the agreement, the parties are still free to engage in ADR with a post-dispute agreement. The parties must be willing. In the Ruandro case, the talk by one party of having a business discussion over scotch and the talk by the other that he wanted the case to be settled without going to trial are indicators to broach the discussion of ADR. In this case, parties were soon taking positions from which it was hard to retreat—one party declaring that the contract was complex and memories as to what was agreed to could have faded over the following 10 years. This roadblock to early dispute resolution can be reduced by including a dispute resolution clause that does not just reference courts, venue, and choice of law for litigation purposes. Advocates should offer these clauses as part of their counsel at contract formation. Relationships The Ruandro case cried out for a functional working relationship. ADR can help keep principals involved in the dispute resolution process while their lawyers help them work through goals, risks, and rewards presented by the issues, as well as alternative paths to a final resolution. The ADR practitioner can facilitate the interactions between disputants and optimize outcomes for all parties. In the Ruandro case, the relationship between the parties became bitter and personal as the principals retreated from the actual dispute resolution process. Of course, there may come a point at which positions become intractable and civil discussion is impossible, when litigation, then, is the only recourse. Even in those cases, ADR may offer arbitration as a reasonable, most cost- and time-effective alternative to formal judicial proceedings. Confidentiality and Privacy Because ADR is not a part of the judicial process, the proceedings or sessions or information produced under discovery are confidential. In an open court there are transcripts, orders, and motions—all available to the public. When a judge scolds the parties, it becomes headline.3 When the judge characterizes a party’s behavior as “inexcusable” and “unacceptable,” it becomes part of the story.4 In ADR, the process, the terms, and the agreement are all among the parties and the neutral who is duty-bound to keep it confidential. December 2017 • THE FEDERAL LAWYER • 13 Time The Ruandro dispute began in 2011. Lawsuits were filed in 2014. Today the case is still making its way through the court. Getting a case through the court system is a very lengthy process. Closely associated with the time are the opportunities lost. For seven years, Rosengarten has not been able to exercise his rights. That is an opportunity lost. Then there’s the time spent in court—there have been at least 74 court appearances since the lawsuit was filed in 2014. All this time contributes to increased costs. Discovery In this case, arguments over discovery orders have been costly. Months and months of back and forth have not produced results. Discovery is one of the main drivers of cost in litigation next to attorney’s fees. Ideally, in ADR, discovery can be limited by the parties’ rules or the neutral. In this case, one party produced over 500,000 pages, many of which were nonresponsive to the discovery requests and even included junk mail. Had the parties used ADR, discovery would have been limited. Costs There are costs associated with the running of the clock, with attorney’s fees, and court costs. And, as mentioned prior, the lost opportunity to convert and sell the condominiums as Rosengarten wanted and then to pursue other business opportunities. REAL_ESTATE/308039997/inventor-of-leisure-suit-sues-inventorof-boutique-hotel; Tess Hofmann, Bowery Hotel Co-Owner Stuck in Legal Battle With Partner, Real Deal (May 19, 2015, 12:00 PM), https://therealdeal.com/2015/05/19/bowery-hotel-co-owner-stuck-inlegal-battle-with-partner; Andrew J. Hawkins, Judge Slaps Down Posh Bowery Hotel Owner For His Legal Shenanigans, Crain’s N.Y. Bus. (July 29, 2015, 12:01 AM), http://www.crainsnewyork.com/ article/20150729/BLOGS04/150729872/judge-slaps-down-posh-hotelowner-for-his-legal-shenanigans; Ruandro LLC. v. Three on Third LLC, Admin. Order, Index #155505/14; Rosengarten v. Born, Index #651147/14, New York Civil Supreme Court; Ruandro LLC v. Born, 2016 N.Y. Misc. Lexis 2047. 2 This is the definition used by the Superior Court of California. Mediation: Alternative Dispute Resolution (ADR), Super. Ct. Cal., http://www.monterey.courts.ca.gov/ADR/Mediation.aspx (last visited Sept. 25, 2017). 3 Hawkins, Judge Slaps Down Posh Bowery Hotel Owner For His Legal Shenanigans, supra note 1. 4 Id. 5 Ruandro LLC v. Born, Slip. Op. 31008(U), No. 651148/2014 (N.Y. Sup. Ct. May 19, 2016), available at http://www.courts.state.ny.us/ REPORTER/pdfs/2016/2016_31008.pdf. Conclusion More than five years after the dispute first began, two friends and partners continue to litigate. As of this writing, at least six lawsuits have been filed and five law firms have been engaged. Seventy-four court appearances later, one New York Supreme Court judge declared these to be “bitterly litigated cases.”5 While the Ruandro case may illustrate the extreme, it can serve as a warning of just where business disputes can go. ADR offers many possibilities for more useful outcomes. If the parties do not know about ADR, advocates should have ADR in their tool bag, and counsel should have their clients consider ADR both before and after disputes arise. Attorneys representing clients in any situation in which conflict may arise or has already arisen should consider: placing ADR clauses into agreements, counseling clients on the advantages and disadvantages of ADR, and sharing the successful and meaningful process of ADR.  If you have stories of the successful use of alternative dispute resolution to resolve commercial disputes or relationships, contact us at fedbaradr@gmail.com or join the Section by visiting the FBA’s home page and signing up. Beyond Alternative is a column of the ADR Section, for the promotion of ADR as an integral and necessary part of dispute resolution. It includes practice tips, issues, case discussions, commentaries, and answers to questions for all things ADR. Endnotes Sources for the illustrative case are: This Week in Crain’s New York, Crain’s N.Y. Bus. (Aug. 4, 2014), http://www.podtrac.com/pts/ redirect.mp3/www.crainsnewyork.com/assets/mp3/CN9579782. mp3; Andrew J. Hawkins, Inventor of the Leisure Suit Sues Inventor of the Boutique Hotels, Crain’s N.Y. Bus. (Aug. 4, 2014, 12:01 AM), http://www.crainsnewyork.com/article/20140804/ 1 14 • THE FEDERAL LAWYER • December 2017 Editorial Policy The Federal Lawyer is the magazine of the Federal Bar Association. It serves the needs of the association and its members, as well as those of the legal profession as a whole and the public. The Federal Lawyer is edited by members of its Editorial Board, who are all members of the Federal Bar Association. Editorial and publication decisions are based on the board’s judgment. The views expressed in The Federal Lawyer are those of the authors and do not necessarily reflect the views of the association or of the Editorial Board. Articles and letters to the editor in response are welcome. Copyright of Federal Lawyer is the property of Federal Bar Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.