Addison Bradford:  Hello and welcome to the Hall Render Real Estate Podcast. My name is Addison Bradford and I’m an attorney with Hall Render, which is the nation’s largest healthcare focus law firm in the country. You’re about to listen to a recent webinar that Hall Render conducted about Understanding the Process and Issues in Real Estate Compliance Actions. A conversation with assistant US Attorney Justin Olson. Who’s joined in the webinar with my colleague Lauren Rodriguez, who is an attorney at Hall Render as well within our litigation section. This podcast does not constitute legal advice for any of the parties but is intended to give parties it’s greater insight into real estate compliance issues from the DOJ perspective. If you have any questions about this webinar or this podcast, feel free to email me at abradfordd@hallrender.com.

If you’re interested in more materials, related to today’s topic, Hall Render puts out a real estate newsletter and has additional podcasts, which are available on iTunes. Thank you for listening and we hope you enjoy. Hello and welcome to this Hall Render webinar Understanding the Process and Issues and Real Estate Compliance Actions. A conversation with assistant US Attorney Justin Olson. I’m Addison Bradford with Hall Render and we are the nation’s largest healthcare-focused law firm in the country. Joining me today is my colleague Lauren Rodriguez, who will be my co-moderator for today’s discussion with Justin, who serves as his office’s Civil Health Care Fraud Coordinator.

Lauren Rodriguez:  The goal of today’s webinar is intended to give you a greater insight into the process by which health care compliance actions involving real estate issues are processed and litigated, as well as discuss some of the common issues that arise in these compliance actions.

Addison Bradford:  Also, if you’re interested in the content of today’s webinar, our webinar, Hall Render publishes a monthly newsletter and podcasts regarding health care real estate issues, which includes many compliance matters. Please feel free to email me directly after this webinar at aBradfordd@hallrender.com. If you would like to be added to that newsletter or like a link to that podcast, the podcast is also available on iTunes. Justin, thanks for joining us today.

Justin Olson:  Thanks for having me.

Lauren Rodriguez:  Alright, Justin, start off. Can you please tell us about your role as an AUSA specifically with regards to the health care issues?

Justin Olson:  Sure, I’m an Assistant US Attorney and in that position, I serve in the Civil Division. So first and foremost, I’m a litigator on behalf of the United States in the Southern District, Indiana. Our office has designated someone to handle or be the primary point of contact for health care fraud-related matters. And I fulfill that role. In that role. I work alongside our support staff. We have an amazing support staff at the US Attorney’s office we have a health care auditor and health care paralegal. Then obviously other AUSAs to assist as necessary. But maybe most importantly for purpose, this conversation I also work alongside and with the Criminal Health Care Fraud Coordinator, we have completely separate independent roles as a Civil AUSA, I cannot comment on any criminal matter nor do I have any discretion or say on the decisions that our offices makes on criminal matters, but we do like to work together and coordinate to the extent that is necessary.

 So health care fraud is a broad term, but practically speaking for office purposes, that is primarily enforcement of the Federal False Claims Act, which I’m sure most of you are familiar with. In that shell, deals with any claim presented to the government that was done with the not knowing that it was fraudulent. So we take that very seriously and False Claims Act cases can involve health care. They can involve other government programs, but to the extent that they involve federal dollars for health care programs, that’s what I like to work on.

Addison Bradford:  You mentioned that there are different people within your office, they’re handling civil claims and criminal claims. Are there offices around the country, similarly structured that way?

Justin Olson:  Yes, every office should have a Civil Health Care Fraud Coordinator and a Criminal Health Care Fraud Coordinator. Some of AUSAs were multiple hats, but that’s usually how the division of labor is set up. And I should have said this right when I started. All my comments today are made in my personal capacity and not as the Civil Health Care Fraud Coordinator. Nothing that I say should be binding or represent necessarily what the DOJ policy is, or what it’s going to do in a particular matter. So with that said, I can talk about my experience and my personal views. But just to… So we’re clear on that front.

Addison Bradford:  Absolutely. We appreciate your expertise and your knowledge of the process here. And we want to start with some questions about the process of beginning with kind of how something gets to you, tell us a little bit about the process by which a tip or complaint from CMS or OIG reaches your desk.

Justin Olson:  So if we get a complaint directly from HHS, it’s going to come to us usually through one of the special agents or case agents and that usually comes in the form of phone call, or could come in the form of an email, say, “Hey, we want to come to your office and we want to chat about something that we think you might be interested in.” They’ll then by that time, if it’s coming from them, they’ll have already done a preliminary investigation, but they want to get our input pretty early on because they want to know if what they have has legs to it. And if it makes sense to continue to invest government resources.

Addison Bradford:  Then what are the process? I mean, obviously, a lot of the actions you see are self-disclosures. How does a health system or hospital or other provider looking to self-disclose maybe a possible violation of Anti-kickback or Stark, how do they reach you?

Justin Olson:  Sure, self-disclosure can be to our office as you mentioned, it can also be directly to HHS to the extent that it comes to our office. The initial contact can be very informal. You can call me. You can call our civil chief, and you can just talk through the problem. At that point, we will say thank you and we will probably ask for a written disclosure of any self-report you’d like to make. But the initial point of contact can be as simple as an email or a phone call. That written self-disclosure is very important. You really want to make sure you’re thorough and exhaustive in what you put in that self-disclosure, anything that you think would be helpful, and we can talk about this more in this hour, but the point of self-disclosure is self-disclosure, and by self-disclosure, I mean full disclosure. So thoroughness is the point.

Addison Bradford:  And as Lauren mentioned at the outset of this webinar, we have a few questions to gauge in your feedback on some of the issues where we talking about. We have our first poll question that’s listed should appear on the right side of your screen, which asks about your understanding of self-disclose your actions. So, if you care for the… All the responses are anonymous and are viewable by… Even us here on the other side of the screen, but we just love to hear back from you and get your feedback on these issues throughout the webinar.

Lauren Rodriguez:  All right Justin. Moving on self-disclosures, so as a litigator with the Hall Render litigation practice group, we know that sometimes cases come through whistleblowers. Can you please describe the process for determining whether that case that’s brought by the whistleblower actually has some merit to it?

Justin Olson:  Yeah. So these whistleblower actions are what are also referred to as qui tam action, it’s probably the most common way that actions come across my desk. These actions are initiated by the whistleblower also called the Relator under the statute and this person will file a complaint under seal in federal court. And they will allege the content of the fraud, and how it violates the False Claims Act. They’ll also have to file or serve on us a disclosure statement, pretty much the same type of disclosure statement I referenced in the context of self-disclosure. And then they have to serve that our office in the US Attorney General, when that comes across our desk, first thing we want to do is schedule an interview with the whistleblower or with the Relator and just confirm that we fully understand what this person is disclosing and the nature of the allegations they’re making, and then also, essentially pick up where they left off to make a good faith, disclosure and False Claims Act complaint.

I have some idea of the nature of the fraud, and so we want to know what they know because once they file that self-disclosure and complaint, we instruct Relators to stop investigating, the case is now in the hands of the federal government. At that point, we will do our due diligence to try to confirm first, all the allegations in the complaint and in the self-disclosure statement, make sure that it’s accurate and what they’re reporting is true, and then we will continue the investigation. And the point of the investigation is just to satisfy all the elements of the False Claims Act violation.

Not only there has to be some kind of misrepresentation or material omission, there has to be an actual claim presented, and there have to be federal dollars that issue under a health care program and then there also has to be was probably often the most difficult prong to satisfy the center requirement. Getting at you have a Cheerio false statement. You have a claim. You have federal dollars an issue but if there’s no intent to defraud, then technically, it’s just a mistake. And it’s not fraud. And as I’m sure you know, as folks who are very well versed in the Federal Rules of Civil Procedure as real estate attorneys, you have to plead fraud with particularities under Rule of Civil Procedure nine and that’s hard to do. And you have to know the who, what, when, where why of the fraud and so that ends up being probably the area where our investigation is very helpful for Relators who hope to proceed to have the case fully litigated, but it also becomes often difficult to prove.

Lauren Rodriguez:  So you mentioned in the beginning that they fall under seal.

Justin Olson:  Yes.

Lauren Rodriguez:  So our audience is not just made up of attorneys. We have attorneys that are transactional attorneys. We also have people that work in the health systems. The goal of this is to explain a little bit in detail. I know as a litigator that sometimes the process is a little bit slower and uncomfortable with that. Some people aren’t. Can you describe or can you give us a typical length of time from when the case comes to you from a whistleblower until it’s unsealed?

Justin Olson:  Right. Sometimes they never get unsealed. Sometimes we investigate, and there’s nothing to the complaint, we declined to intervene. We do our best to inform the Relator of why we declined to intervene? And ideally, they would agree with us and voluntarily dismissed their complaint and the target of the complaint would never know that they were the subject of a qui tam lawsuit. Those can wrap up as soon as six months, if not a shorter amount of time. Some cases can go on for several years. I’m involved in some cases that have gone on… Are still unsealed and they’ve gone for 45 years. And that might sound odd. Our jurisdiction is pretty lenient on the time, the number of motions for extension of time that we file in some of these very complicated cases. Our jurisdictions are not as patient, other jurisdictions, the judges want to see these cases before more quickly.

So in our district in the Southern District of Indiana, to answer your question, six months to five years, we don’t want to go that long, but some of them are just extremely complicated and they just take a long time to really investigate. Our jurisdiction you got one shot after six months, maybe a year, they’re saying, “All right, I’m denying any motions for extension, we are on seal in this case, government if you don’t have your ducks in a row, too bad. Get your act together. These cases going forward.” So thankfully, our judges are… We have great judges in our district, but at the same time, there are benefits I can see for getting these cases moving along faster. Evidence never gets better, the staler it becomes. And so I can appreciate judges who want to see these cases move quickly.

Addison Bradford:  So one of the things we’ve noticed as we track Stark communicate back-related federal complaints action specifically those related to real estate. Sometimes we see or say frequent flyers, people who bring multiple whistleblower claims, whether they’d be successful or not. Do you guys keep track of frequent flyers? And does that impact your decision as to whether to bring a case?

Justin Olson:  Yes, the frequent flyers are known in our district. And as you said, we also compare notes with the Northern District of Indiana. Sometimes we’ll get Relators who filed cases in our district, and they’ve been rebuffed and file very similar cases in our district hoping to get another bite at the apple. At the same time, though, we take every case very seriously. And just because someone is a frequent flyer, and we know that they’re very interested in bringing these types of claims doesn’t mean that they don’t have something to say, and they don’t have concerns that they want to dress. So while it’s noted, and we appreciate that it does not affect at the end of the day our assessment of the merits of the case.

Lauren Rodriguez:  So when you first started out, you described the process of civil and criminal being separate where you work. So with the AKAs Anti-kickback statute, can you describe to us how these cases are distributed the timing around them? How do we know that it’s going to be a criminal matter? When do you execute that against?

Justin Olson:  Sure, there’s no understanding the line between civil and criminal… Again, I just want to say I’m never involved as a Civil AUSA and for experience is no Civil AUSA, there should be in our justice manual, prohibits it from making a determination on criminal. It depends on the evidence all at the end of the day.

Lauren Rodriguez:  Okay.

Justin Olson:  In a qui tam context, it comes to us as a civil matter. And as we depending on the extent of the investigation and what’s called forth we need to, for example, subpoena emails from the target or conducted depositions if in the course of those depositions, something extremely nefarious, that’s material to the fraud comes to light. And we have not just a matter, reckless disregard for the falsity of the claim, but there’s willful intentionality to the fraud, we would probably just make a referral to criminal and then they would take it from there. We wouldn’t tell them one way or another to treat it as criminal. They would make that determination on their own.

I’ll also say that sometimes it happens in reverse. Sometimes there’s a criminal investigation going on into an alleged fraud scheme. And I’m brought in just to observe, whether it’s a witness interview or strategic planning meeting among the case agents, and six months later, the criminal investigation wraps up, there’s nothing comes of it. But there’s been enough evidence collected that can be simply prosecuted. And so within comes in my desk and I would take over the investigation. As with any criminal case, there are certain things that civil can’t see, we’re not privy to any grand jury testimony or anything that’s been produced in response to a grand jury subpoena, we have to get a special order to see that. But we can share resources in that regard. So, bottom line, it’s the interplay between the two changes based on the nature of the evidence that comes in during the course of the investigation.

Lauren Rodriguez:  And you said that it comes to your desk, do you have a lot of autonomy to decide, “Oh, I believe that this is going to be a civil action that I want to pursue?” Or do you have to go up the ranks? How does that work?

Justin Olson:  I have to get sign off from the civil chief, for any case that I open, but there’s a lot of trust in our office, in particular, other offices, depending on how big they are, Southern District of New York or Eastern District of Pennsylvania, these very large offices, there’s a more formality to the decision to open a civil case or close a civil case. But at the end of the day, my supervisor trusts me and will often defer to the calls that I want to make.

Addison Bradford:  And we have our next poll question, which leads to our next topic. And something you indicated previously with regards to referrals from the civil side to the criminal side, what types of factors influence the decision to referral case to the Criminal Division? Is it based on intent? Or some of the factors that play into that?

Justin Olson:  Yeah, so just know that the question on the poll is, what are the factors for filing criminal charges? I can’t answer that question, but I can answer the referral question. For me, a referral to criminal involves two things, one patient harm is a big factor for criminal AUSA state. That’s a big factor that, the other factor is just kind of the high handedness of the violation the intentionality of the action. When something moves from a reckless disregard putting your head in the sand over to and clear intentionality, that might prompt me to ask for criminal to take a look.

Addison Bradford:  So let’s say that there is a, both the criminal and the civil side have decided that the allegations or the alleged violation of Anti-kickback are worth buying a lawsuit. How much coordination and what coordination is there between the entities in following an action or following actions? Excuse me.

Justin Olson:  Right. So to maybe change the question a little bit and just continue with the qui tam context. The qui tams are pretty much presumed to stay in the civil context. It’s fairly unusual for criminal to be involved in any qui tam investigation that goes before a decision for us to decline to intervene. In a case, that’s been referred to us by HHS directly, or that comes through another investigative agency, the coordination among criminal and civil in our office, I can only speak to our offices, the coordination is very robust. We will try to attend the same meetings to the extent that we’re talking to case agents, we’d like to talk to them together. Again, reaching our own lane, as criminal and civil AUSAs where we’re assessing it for different reasons and from different perspectives.

I have no ultimate say and what the criminal counterpart does, and they don’t ultimately determine what the civil does, but to the extent that we’re just not trying to duplicate efforts with regards to the information that we can legally share with one another, we don’t want to duplicate efforts. And we find that this not only benefits us, but it also makes the jobs of our case agents easier. They don’t have to explain things multiple times when they pitch a case to criminal but also to civil. And ultimately, at the end of the day, the public’s better serve, we’re more efficient. We were able to wrap up matters more quickly because we’re able to get to the heart of the matter at the same time.

  That said there are certain circumstances where civil will usually have to be put on hold, the case goes criminal, we essentially kind of hit the pause button, let them finish what they’re doing, once that wraps up and civil can jump back in or the opposite based on how the evidence comes in from the case agents and what they’ve seen criminal might say, “Hey, there’s nothing… I don’t see anything that’s worth criminals time here. So go forth and litigate Justin and if you get concerned about… If the facts change, and your investigation takes a different turn, come back and see me but they might check out.”

Lauren Rodriguez:  So civil actions, you’ll see a lot… I know when the DOJ posts things on our website through emails, I get alerts. There are multiple parties involved in these actions. And sometimes we have a party, one provider, or one entity providing a benefit to another entity. How do you determine, which entities are the ones that you go after? Sometimes it’s only one entity, sometimes it’s multiple.

Justin Olson:  Right.

Addison Bradford:  Yeah. And I’d like to just add on to that. And so where you have potentially like a real estate leasing arrangement where you have a physician and you have a hospital entity, however the decision made as to which party to file the civil action against.

Justin Olson:  Right. Well, when it comes time to file an action. Understand that our office to feel comfortable filing in good faith. There has to be an investigation, at least a couple of years in the making before we get to that filing decision.

Lauren Rodriguez:  And that includes the whistleblower or the other entities that come to you.

Justin Olson:  Exactly. Yeah, your self-disclosure, whistleblower, qui tam, or a referral directly from the agency. And by the time of filing the decision of what entities to name in the case caption when we filed a civil complaint really boils down to what’s the nature of the evidence that we have at the time.

Lauren Rodriguez:  Okay.

Justin Olson:  That’s different from who was investigating at the front end. At the front end, I think it’s safe to say every person who’s named on the lease, every person involved is going to be a subject of investigation. But as the case develops, as the evidence becomes clear, you’ll see certain entities likely drop out just because there’s not enough evidence to support a claim. There are not enough witnesses available that will be on call as the litigation develops to support the claim. And that will be a factor. The other factor is resources. The federal government cannot pursue every single possible claim. And as I’m sure some of your clients well know, DOJ declines to intervene in most qui tam cases. But that does not mean that most qui tam cases are frivolous or malicious.

The public is well served by helpful Relators who see a case to conclusion even without the direct assistance of the Department of Justice during the actual litigation. So it is a matter of priority, priority for the current Attorney General the priority for the US Attorney in our office and also the needs of the communities in which these cases are brought. So all those factors play a part in who is ultimately named in the case caption when it comes time to bring a lawsuit. And I would also say, most of our cases do settle before we have to file a complaint. And so naturally, if you already settled, you’re not going to be named of the complaint.

Addison Bradford:  Based on your experience with settlements. Is there many variations in settlements based on how the action started? So, our settlements typically from what you’ve seen lower when they arise at a self-disclosure, like if somebody self discloses in a… self-disclosure as a Stark, self-disclosure a Stark violation in a lease, is that typically the settlement amount lower than what you see if for instance, arises from either DOJ or a qui tam action?

Justin Olson:  It should be lower. And I’d refer our listeners to title four of our justice manual, which talks about the self-disclosure, framework and the cooperation credit that we give… Those guidelines are very clear about… The expectation is that they will be… The penalties and damages will be reduced. That said if there is truly… Even if there’s no fraud, even if they self-disclose, and there’s no fraud, but there was an actual mistake, claims were paid that shouldn’t have been paid, the disclosing party would be expected to repay what they shouldn’t have received. And if there is fraud and they self-disclose it.

It should be, and we would expect it to be less than double damages. Obviously, you can get up to triple damages for fraud under the False Claims Act. Many cases settle for… They can’t settled for triples, I’ve seen that they settled for doubles. But we would expect that a self-disclosure would result in settlement less than that.

Lauren Rodriguez:  So I kind of want to narrow the focus on real estate questions. How many Stark and AKAS cases you handle on a regular basis that deal with real estate?

Justin Olson:  Sure, I would say at our office at any given time, we have between, five to 10 cases, it can be less than that it can be more than that at any given time. We’re a medium-sized district. And there are ebbs and flows to it. But I think five to 10 is probably a good rough estimate.

Lauren Rodriguez:  And do you know how many are Stark only or how many you know that you had civil and criminal AKAS or is it just a mix at all times?

Justin Olson:  I think it’s a good mix. It’s really hard to put numbers on it. I don’t have a great sense of what criminals caseload is like right now. But on the civil side, I mean, most qui tams and referrals that come to us that are real estate related are probably going to involve both Stark and Anti-kickback just because when they first come to us, the facts are not as well developed. And so, the assumption is there’s probably going to be elements of both of those statutes that play here, and the picture becomes clear as the investigation continues.

Lauren Rodriguez:  And how many do you handle personally?

Justin Olson:  Personally…

Lauren Rodriguez:  Or do you work in teams? How does that work?

Justin Olson:  Yeah, we work in… I’ll be touching every healthcare case. That’s on a civil side in our office.

Lauren Rodriguez:  Okay.

Justin Olson:  But I may not be the lead. We’re a family-friendly office. So I’m expecting my third kid, so I will be on unbelief for a little bit for that and so someone else will momentarily step in, and we’ve had people… So I’ll be aware of at least every case, and my involvement will vary based on a variety of factors.

Addison Bradford:  Yeah, and these cases, specifically, real estate leases and other real estate arrangements. What are the most common issues you see in these from a compliance perspective?

Justin Olson:  So real estate cases, the most common issue will be fair market value. If you have a situation where someone is leasing property, and it involves health care entities, and there’s no lease in place or no agreement written down. That’s a pretty clear violation. I would hope that no entity would be so high handed in that. So there’s going to be some lease, there’s going to be some arrangement that on its face probably looks legitimate. And so the issue becomes, is that reflecting the ordinary course of business for entities that are engaged in these transactions? And so that ultimately comes down to the fair market value? And is there something baked into this transaction that’s being artificially affected based on the interest in referrals or trying to gain an advantage from a relationship that the federal statutes don’t allow?

Addison Bradford:  Yeah. So when you’re doing a fair market value analysis of a lease, what parts of a lease are you typically looking at? Obviously, the base grant would be one, but are you looking also for other factors in the lease?

Justin Olson:  Sure, I mean, we want to see that every part of the Safe Harbor is complied with. And so the terms of the lease become important. The use of the facility, if it’s a facility or premises. The use of the equipment if it’s equipment involved, there are specific factors that are very clearly spelled out in the Safe Harbor for space rental and a cooling rental. And so we want to see all parts of the lease that are going to impact those factors will be we looked at, I should say when we look at the fair market value we and that it will involve experts and so I’m not a valuation expert. I’m a litigator. So we do rely heavily on third-party experts when we conduct these analyses.

Addison Bradford:  Who typically do hire to do… I mean, are you looking at appraisal experts to perform these types of evaluations for leases?

Justin Olson:  Yeah, we want people that are well respected in the industry as with any expert, they have to stand up in court. They got to survive Adelbert challenge and so we want folks who were legit.

Lauren Rodriguez:  Alright, Justin, I love litigating, I think I was born to do. And you keep mentioning that you’re a litigator. So you also mentioned that these cases settle a lot. How many do you actually take to trial?

Justin Olson:  Not as many as I personally would like to take the trial.

Lauren Rodriguez:  Yes.

Justin Olson:  But I’m sure far too many than your clients that want to take the trial.

Lauren Rodriguez:  I agree.

Justin Olson:  A False Claims Act trial is very rare. You will read about every single one of them on law 360.

Lauren Rodriguez:  Right.

Justin Olson:  And everyone will be aware of them when they happen. I cannot recall the last time a Civil Health Care Fraud Trial happened in our district. So it’s very rare, but it does happen. It can happen.

Lauren Rodriguez:  And if they happen in the Northern District, can you do help out there, or do they not have been there either?

Justin Olson:  I really don’t know. I didn’t call Wayne [Nolte 00:32:53] who’s the AUSA counterpart in the Northern District to get that number.

Addison Bradford:  Are there any compliance actions, which you’re unwilling to settle? Let’s say you have a particularly egregious lease that, had two factors that you’re looking for and charges decisions with are charging stations for civil action versus patient with patient harm and the intentionality of the action?

Justin Olson:  Sure, there’s unwilling to settle… It just comes down to do we agree on the number and does the number reflect the egregiousness of the violation. And if our office and the other stakeholders involved in the federal government are not convinced that the number is what it should be, then that’s how a civil complaint gets filed. It’s if we can’t agree on the number. So basically, the complaint is unsealed. And we’ve intervened, it’s very safe assumption to say that we are unwilling to settle for the amount that was offered.

Lauren Rodriguez:  So you’ve been with the Office for how long?

Justin Olson:  I started pretty recently, earlier this year. So I am fairly new to this office. Yeah.

Lauren Rodriguez:  And before I see that we have some questions before we ask this question really quick. Can you describe the most notable case you’ve handled?

Justin Olson:  I cannot because-

Lauren Rodriguez:  Because you’re limited.

Justin Olson:  They’re still under seal.

Lauren Rodriguez:  Oh, okay. So any that you have handled that have been unsealed? Can you describe anything for us that you were just…

Justin Olson:  I don’t think we have any cases in our office that are unsealed.

Lauren Rodriguez:  Oh, wow.

Justin Olson:  Right now. I think that’s accurate. Like I said before this is ebbs and flows. I mean, it changes for a variety of reasons.

Lauren Rodriguez:  And they can say sealed from six months to five years.

Justin Olson:  Or they’ve settled Bob remain under seal and that sort of thing. I want to get away from this ‘five to six years.’ Don’t describe your seal. We don’t want cases to last that long.

Lauren Rodriguez:  No, I agree. I agree. It’s nice to hear. I know some of the listeners will probably feel a little bit better. I’m fine waiting. And most litigators are but non-litigators get a little antsy.

Justin Olson:  And I would think your clients, they should not know whether… If they know there’s an investigation, they should not know whether the investigation is a qui tam or a referral from our agency.

Lauren Rodriguez:  Okay.

Justin Olson:  If they know it’s a qui tam, it won’t be because we said anything.

Lauren Rodriguez:  Okay.

Justin Olson:  It’s under seal means it’s under seal and we can’t confirm or deny one way or another its existence, that’s what it means to be under seal. So, I understand that can be uncomfortable in the ambiguity of it all can be unsettling. But it is what it is.

Addison Bradford:  More I mentioned, we have a few questions and one of them deals with the timeliness of fair market valuation. So how much weight do you give the timeliness of an appraisal or broker opinion of value and establishing the fair market value of the proposed leasing arrangement?

Justin Olson:  Sure, well, I really can’t say for sure. It will depend on the terms of the lease. There are so many factors. Best advice, personally, I would give is just what would you do if this were not a health care… If this lease did not involve healthcare, did not involve anything related to doctors. What would you do under the normal business operations? That’s the language of the statute. And that’s the legal tests that we’re looking to deal with. And so, there are valuation experts who are much more qualified to understand what that statute means in the context of your particular practice, your particular region, and your particular lease.

Addison Bradford:  And so with appraisals in cases where there a hospital or a leasing arrangement that’s under investigation for possibly fair market value issues. If appraisal has been obtained, we will also obtained a third party expert to review that appraisal and what way do you give an appraisal that is received by a party under investigation?

Justin Olson:  In my experience, we always get a third party to weigh in. If it gets to the point where we are investigating the fair market value, we need that third party opinion. Now that said, you just be perfectly frank, we’re not assuming that every appraisal or assessment that the target has received before the investigation started is automatically a sham. Quite to the contrary, we assume that whatever due diligence they did before entering the lease is legitimate. But we want to know two things. How does that appraisal fit with our third-party opinion? And second, what were the facts and the assumptions that the target fed to their own appraiser or their own valuation expert? And I’ve seen cases where we have reason to suspect that the assumptions that the target fed to their own appraiser were false or misleading.

  And so in that situation, it’s not the initial appraiser’s fault that they may have come up with a figure that doesn’t match what our experts said it’s a function of them having the wrong information. So we want to look at both angles of it. What are the targets of the appraiser know? What were the assumptions they were operating under when they made their assessment? One, and then how does their conclusion assuming that they did get the right information fit with our independent expert?

Addison Bradford:  You mentioned doing due diligence. Assuming that it’s legitimate that the work that parties will do before signing the lease. Do you give more deference or more way or look at is more legitimate and appraisal versus a broker opinion a value? Or are you looking just for some type of support for the fair market value evaluation?

Justin Olson:  Yeah, I mean again these are complicated cases that do turn on the intent of the parties. And so again, back to industry standard, what would your clients do if this were in the normal course of business if they were trying to be above board? And that’s what we want to see as well. I don’t think it’s cookie cutter. We just want to see what did the target do to try to in good faith, assure that what they were doing was aboveboard and compliant with the law.

Lauren Rodriguez:  So we had another question in regards to HHS’s launching the regulatory spring to coordinated care. Do you think that the current Safe Harbors and exceptions under AKS and Stark are sufficient to allow for coordinated care models?

Justin Olson:  Sadly, I am not familiar with this initiative. So with that qualifier, I can’t fully answer the question, but I will say and this is purely my… Again, personal capacity. Stepping back looking at the health care industry from a 30,000-foot view, I think the assumption in this question that trying to do what is best for the patient can sometimes seem like it’s at odds with the spirit of the regulations, health care is extremely complicated in this country. We understand that. And we understand that often greater coordination, greater sharing of resources, is in some cases in the patient’s best interest, however, where there’s increased coordination, increased information sharing increased efficiencies, the solutions that your clients come up with, may not comply with the Safe Harbors.

So all that to say, I think, our office and I truly appreciate that the tension that arises at the end of the day, I think the purpose of the statutes is to do the best that Congress can in recognizing some low hanging fruit that by any standard is not going to harm patients, is not going to waste government resources. But as health care evolves, it can expose maybe some things that the regulation doesn’t take account of. And I think that’s probably the spirit behind the regulatory sprint that CMSs is engaged in. So that’s my attitude, I think, to that general landscape that you see, which I don’t think is exclusive to health care, I think any highly regulated industry is going to have the same types of tensions.

As the industry evolves and develops, presumably in an attempt to satisfy consumers and be for the good of the public. There’s always going to be tension with whether what’s best for the patient is really accounted for by the regulation. So that said, as an employee of a law enforcement agency, essentially, we have to go with what the statute says. And so I would think that CMS is aware of these things as well. And if you ever get them on one of these webinars, they can say more.

Lauren Rodriguez:  So in your time at the AUSA’s office, I’m sure you’ve dealt with some defendants, or potential defendants that you are like, “Oh my gosh, if you just would have done X, it would have been fine.” What is X? What do you suggest to providers, to physicians entities that would maybe save you some time, and them some time?

Justin Olson:  I would say listen to your general counsel.

Lauren Rodriguez:  Can you say that one more time?

Justin Olson:  Listen to your general counsel. That’s right. So I’m sure your clients can relate. You have a case where the business side of the brain, of the client so to speak has a great solution to increase revenue and increase patient demand and meet all sorts of good needs that make complete business sense. They say, “Oh, yeah, we got to get legal involved, hey Legal, what do you think?” And then Legal puts the kibosh on it all and then the CEO pilot forward. And then five years later, we’re deposing the CEO and saying, “Hey, you got this email from your general counsel, it said, we can’t do this? We got to change some things.” And you replied, “Who cares?” I would say that… You don’t want that. So, if there’s anything, I think most physician groups, hospitals, medical providers in Indiana are very sophisticated and very thoughtful. And I know the general counsel’s in those organizations want to do what’s right. And so that’s good for us. That’s good for our state. That’s good for Treasury, I hope that your clients just listen to their GCS and-

Lauren Rodriguez:  The attorneys.

Justin Olson:  Yeah.

Addison Bradford:  Well, Justin, we really appreciate you taking the time to talk to us today and sharing your insight on this issue. If there are any questions you have that weren’t addressed today, to our webinar participants, feel free to email me, Addison, at abradford@hallrender.com or Lauren at lrodriguez@hallrender.com. As mentioned earlier, we do have additional health care compliance resources related to real estate with our newsletter and podcasts, which would be happy to share. We thank you all for joining today and appreciate your time.