PATH audit marches on

Last month, a federal appeals court upheld a lower court ruling against a lawsuit challenging the government’s actions in pursuing the Physicians at Teaching Hospitals (PATH) audit.  The lawsuit, filed by the Associaton of American Medical Colleges and other organizations, sought to stop the feds from pursuing their heavy handed actions. 

The appeals court, however, threw out the suit not on its merits, but on its lack of “ripeness.”  They suggested that once the feds' actions have run their course, affected hospitals may reinitiate court action against the PATH audit at that time.  The 9^th circuit appeals court also referred to the feds actions in undertaking the PATH audit as “draconian,” lending some solace to the plaintiffs, and leading some to believe the courts would ultimately be sympathetic to their position.

Unfortunately, even when the process is sufficiently “ripe”,  Medicare is likely to make a jurisdictional argument that is likely to delay effective court action for years.  The Medicare statute prohibits suing the government, at least until all administrative remedies under the regulations have been tried first.  This requirement might never be met, and the plaintiffs' challenge of the PATH audit therefore might never be heard on its merits.

DrRich comments:

The PATH audit, which we have reviewed extensively, is perhaps the first and best example of the government’s true intentions under the new Fraud and Abuse statues. Which is to say, their real intent is not to stamp out fraud and abuse, but to intimidate doctors into behaving according to the government's wishes as opposed to behaving according to their patients' best interests.  The PATH audit retroactively applies new federal regulations to actions that took place (for the most part in good faith) well before the new regulations were spelled out. (Hence the court's characterization of the feds' actions as draconian.)  The PATH audit, indeed, is a perfect example of the Regulatory Speed Trap, and the vigor with which the feds have clung to their pursuit of the PATH audit is very revealing of their actual intentions under the Fraud and Abuse statutes.

So while the courts have given the targets of the PATH audit some solace through their characterization of the feds' action, it does not appear likely that these sentiments will have any concrete benefit – at least not in the foreseeable future.  The Feds thus have been given a green light to pursue these and similar efforts.

In the end, this is too bad for doctors.  More importantly, it is too bad for patients (whose doctors are, out of necessity, growing more and more concerned about things other than what is best for them), and is yet another reason individuals need to take steps to protect themselves within the health care system.

08/12/2000

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