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Conner v Salina Health Ctr.
10th Circ.

Conner was denied reappointment to Salina following a peer review panel recommended against the reappointment.  Conner filed suit that he was due federal due process even though the hospital was private.  The district court said it was private and there were no federal grounds and the hospital was not a state officer.  The 10th Circuit agreed that the plaintiff was deprived of no federal rights.  The court also found that traditionally peer review was not regulated by the state. 

Conner v. Salina Regional Health Center, Inc. (10th Cir. 2008)

In U.S. ex rel. Conner v. Salina Regional Health Center, Inc., the court held that if the express certification does not specifically state that compliance is a prerequisite to payment, the court “must look to the underlying statutes to surmise if they make the certification a condition of payment.” The court rejected the notion that a very broad certification of compliance with all health care laws and regulations could satisfy the specific requirements of the FCA. Conner alleged that Salina Regional Health Center (SRHC) submitted false certifications of compliance in its annual cost reports, in which health care providers notify the government of over- and under-payments resulting from Medicare bills submitted throughout the year. The underlying statute regulating annual cost reports did not expressly condition payment on the certification of compliance. Instead, Conner asked the court to find that the compliance certification found in the annual cost report explicitly conditioned Medicare payments on compliance with all applicable Medicare statutes and regulations. Conner, 543 F.3d at 1218.

The court explained that this broad interpretation of the certification requirement could not be reconciled with existing Medicare regulations and enforcement of the FCA:

Although this certification (appearing on the annual cost report) represents compliance with underlying laws and regulations, it contains only general sweeping language and does not contain language stating that payment is conditioned on perfect compliance with any particular law or regulation. Nor does any underlying Medicare statute or regulation provide that payment is so conditioned. Thus, by arguing that the certification’s language is adequate to create an express false certification claim, Conner fundamentally contends that any failure by SRHC to comply with any underlying Medicare statute or regulation during the provision of any Medicare-reimbursable service renders this certification false and the resulting payments fraudulent.

Id.at 1219. The court noted that the Medicare statutes have many ways of enforcing underlying laws and regulations, including a plan of correction, a reasonable time period to address deficiencies, and the opportunity to correct billing practices. If, after these conditions are satisfied, the provider remains substantially noncompliant, Medicare program participation may eventually be terminated. Conditions of payment, on the other hand, “are those which, if the government knew they were not being followed, might cause it to actually refuse payment.” Id. at 1218–1220. Because the court found that the certification in SRHC’s cost report related to conditions of participation, the court held that no false claim had been filed. Id. at 1226.

Link to case law

Legal discussion on his case

Limiting the Scope of the False Claims Act: the Tenth Circuit’s Decision in United States ex rel. Conner v. Salina Regional Health Center

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