A recent National Incident Management System (NIMS) update alert from the NIMS Implementation Center, included obscure reference to a frequently asked question (FAQ) document on the FEMA website. This document, posted on April 20, 2007, like many documents before it was deeply buried within the FEMA website, accessible only to those who knew where to find it.
The last two questions on this FAQ document dealt with a raging debate regarding the repercussions of failing to be NIMS compliant before the looming September 30, 2007 deadline.
The first answered the question of whether the Joint Commission required NIMS compliance for accreditation. The answers stated “Not at this time.”
The second question similarly was a response to inquiries regarding whether CMS required NIMS compliance for Medicare and Medicaid benefits and reimbursements. Again the answer was “Not at this time.”
The April 20th update was posted almost exactly three weeks to the day after High Alert, LLC. privately circulated a pre-released draft of its white paper on the association of NIMS, NRP, the NIMS Implementation Plan for Hospitals and Healthcare, the Federal False Claims Act (Qui Tam) and the Sarbanes-Oxley Act. In that much circulated document, High Alert referenced several early positions by the Justice Department and the NIMS Implementation Center that placed hospitals and other healthcare facilities at risk of Medicare fraud and the repercussions of that fraud under both Federal False Claims Act and Sarbanes-Oxley.
High Alert sounded the claxton alarm warning that failure to be NIMS compliant while still billing Medicare and Medicaid could constitute a violation of the Federal False Claim Act, thus opening institutions to significant legal repercussions.
Several legal scholars had reviewed this potential and concurred with High Alert’s conclusions, adding that willful blindness regarding NIMS Compliance does not constitute a defense. Similarly, the fact that Federal False Claims complaints are sealed for the first 120 days would by necessity mean that healthcare facilities and hospitals filing Sarbanes-Oxley Reports while under a Federal False Claims complaint would be guilty of a second violation, that being a false Sarbanes-Oxley Attestation.
Several officials within the Department of Homeland Security, FEMA and Department of Health and Human Services requested copies of the High Alert draft document in the weeks prior to its official release in early April. Within a week of the release of High Alert’s white paper the FAQ statements were posted to the internet. Interestingly, it was not until late June that the existence of these clarifications was publicized.
This raises the specter of a continuing plan to place hospitals and healthcare facilities in danger of violating of both the Joint Commission Accreditation guidelines and the Federal False Claims Act for failing to be filling NIMS compliance by the September 30 deadline.
Hospitals and healthcare facilities can take a little solace in the fact that this FAQ document state “not at this time” in response inquires that the possibilities raised by High Alert’s document will result in actual federal prosecution.
There further persists the question of whether or not a private relator can bring Qui Tam action under the Federal False Claims Act, despite the fact that the federal government is currently disallowing any intention of bringing such claims on its own, “at this time.”
The history of the Federal False Claims Act demonstrates that enforcement has been primarily at the hand of private citizens acting in the function of “relator” bringing Qui Tam actions thus ever expanding the application and implication of the Federal False Claims Act.
The legal connections between liabilities under Federal False Claims and the Sarbanes-Oxley Attestation has been well-established both by High Alert and by others. Thus when Qui Tam actions are successfully argued for failure to comply with NIMS hospitals and their corporate executives would face serious legal jeopardy.
Of even greater concern is the fact that even if a Qui Tam action were unsuccessful, the fact that the Qui Tam action may not be disclosed by any party requires that the existence of this potential liability be omitted from any Sarbanes-Oxley report filed during the corresponding time frame. This willful omission of a potential liability is the very definition of a Sarbanes-Oxley disclosure violation. Due to this legal “catch 22,” the CEO and CFO who signed the fraudulent Sarbanes-Oxley Attestation face civil and criminal prosecution.
The recent NIMS Integration Center alert and its associated FAQ document may allay the fears of hospitals as they move forward quickly to meet the September 30 implementation deadline. However, those facilities who view this document as reassurance that there are no significant repercussions for failure to be NIMS compliant may find that the copies of the High Alert document circulated at the Department of Homeland Security, FEMA, the NIMS Implementation Center and CMS served as a template for NIMS enforcement.
The ultimate question is, did the Federal government blink or is this a bit of informational sleight of hand?