Reality Check: $7 million and an Integrity Agreement

On Thursday December 20th, the County of Orange Health Care Agency (HCA) entered into a $7 million settlement agreement with the United States Attorney and the U.S. Department of Health and Human Services to resolve a federal False Claims Act investigation into HCA’s billing practices. In addition to the $7 million price tag, HCA is required, by means of an Integrity Agreement, to ensure that it operates within the boundaries of the laws and regulations related to federally funded health care programs, and maintain its Compliance Program and Code of Conduct which HCA instituted in 2001 during the investigation of the claims.

Well, to say the least I just don’t think the Board of Supervisors should trust the people responsible for running the Health Care Agency, in particular it’s Compliance Department, to act with any level of integrity when it comes to their Code of Conduct or Compliance Program. Since they implemented their program HCA management has failed miserably in implementing their Compliance Program. They have allowed retaliation against at least one employee who reported misconduct, and had to return federal grant funds that were improperly spent after certifying that there was now evidence to support claims that those funds had been improperly expended.

You see, I happen to know because I am that employee. You can read about this part of the story here. Below is a video interview I did on the story as well.

http://video.google.com/videoplay?docid=9119211668521698479

So here is my letter to the Board of Supervisors on the topic.

Honorable Chairman Chris Norby
County of Orange
Fourth District Supervisor
10 Civic Center Plaza
Santa Ana, CA  92702

January 2, 2008

Dear Chairman Norby,

On December 20, 2007 it was announced that the County of Orange and the federal government entered into a settlement agreement to resolve claims related to a False Claims Act investigation of improper Medicare billing practices by the Health Care Agency from 1990 through 1999.

Part of that agreement required the Health Care Agency to enter into an Integrity Agreement. That agreement requires the agency to maintain as a part of its Compliance Program a Code of Conduct which among other things stresses that employees be free from retaliation for good faith reporting of possible violations of the Code or laws and regulations.  Sadly, the agreement did not provide for an external review of the agency’s Compliance Program.

I believe that such review is critical to assuring the integrity of the current program. As you are aware the Health Care Agency in 2006 was required to return to the U.S. Department of Health and Human Services (HHS) more than $143,000 in grant funds that an HHS investigation determined were improperly expended as a result of faulty grant administration by the Health Care Agency. On appeal, the $143,000 amount was reduced to $22,094 in unsubstantiated charges.

On February 28, 2003, I reported to the HCA Office of Compliance the improper management of these federal grant funds. On March 4, 2003, I was summarily reassigned from my position to an assignment located in the Tuberculosis Testing Clinic, by the Division Manager responsible for the improper conduct. That assignment, per CDC regulations, was hazardous to my health due to my HIV-positive status. In a meeting on March 6, 2003, then Sr. Compliance Officer Jeffrey Nagel determined without any investigation that my reassignment was a justified personnel action and that there was no evidence of retaliation. Following that meeting, I reported my concerns to the HHS Office of Inspector General. On September 9, 2003, then Chief Compliance Officer David Riley determined that there was no evidence to substantiate any of my complaints of management misconduct or my claim of retaliation. Subsequent complaints to the County Internal Audit Department under the direction of Peter Hughes were not investigated.

Given these facts I believe it is only prudent for the Board of Supervisors to provide the taxpayers, as well as its employees, with additional assurance as to the effectiveness and integrity of the Health Care Agency Compliance Program. Among such assurances should be your request that the County Auditor/Controller conduct an annual audit of the investigations and findings of the HCA Office of Compliance. Further, in order to assure that your employees can actually trust the validity of the non-retaliation provisions of the Code of Conduct, I recommend that you establish policy that permits the denial of retaliation claims by the Office of Compliance to be appealed to an independent arbiter.

Chairman Norby, I hope that you and your colleagues will consider my suggestions. I firmly believe that it is important for all county employees to act with ethics and integrity. Those standards must be applied equally to all employees, management included. There are clear indications, and even a smoking gun or two, that the current process is flawed and unworthy of trust. Only you can fix that.

Sincerely,

Chris Prevatt
A concerned and ethical OC Health Care Agency Employee