Q&As regarding Besler Consulting's settlement with the federal government

 

What was this dispute about?

The government engaged in a multi-year investigation of hundreds of hospitals across the country that received increased Medicare outlier reimbursement as a result of increasing their charges for hospital services. Besler assisted certain hospital clients in modeling various pricing structures, and some of these hospitals were encompassed in the investigation. Primarily, Besler provided our clients with the data and analytical tools necessary for the hospital's management to make appropriate pricing decisions to enable the hospital to remain competitive in today's hostile economic environment. The consulting project was broad-based and focused on all third party payors, including commercial health plans, self-funded plans and the Medicare program.

 

Did Besler do anything inappropriate?

Absolutely not. We provided our clients with the data and tools to help the hospitals make decisions regarding their charge levels and to assess the overall impact of various pricing structures. We also advised our clients to obtain legal advice from their attorneys in conjunction with their pricing decisions and, in many cases, Besler paid the fees for the legal advice furnished to the hospitals by their attorneys. More to the point, we believe that our clients and our firm acted in accordance with the Medicare rules that were in place at the time, and that our clients followed the advice that they received from their lawyers. For this reason, in agreeing to settle, we did not in any way admit that our firm engaged in any wrongdoing whatsoever.

 

Why did Besler decide to settle?

This has been one of the most difficult personal and professional decisions that Phil Besler has made. However, from a business perspective, it simply made sense to bring this matter to an end.

We maintain our strong and unwavering belief that our clients and our firm acted in accordance with Medicare rules that were in existence during the period under review. Also, we remain exceptionally confident that we would have won had this matter gone to court. However, a consulting firm like ours simply cannot afford to fight the full power of the federal government and its endless resources.

For nearly three years, we have been involved in ongoing discussions with the government over this issue. During this period, we dedicated a substantial amount of money, energy and resources in an effort to bring this matter to a close, for our firm and for our clients. We achieved significant progress, and we were recently presented with the opportunity to bring closure to this matter.

We are taking advantage of this opportunity so that we can end this distraction, and so that our firm and our employees can focus full attention and resources on addressing the needs of the healthcare community. Our firm's contribution to this settlement is much less than the amount that would have been spent on legal fees and related costs had we pursued this through the courts.

 

Why did the government investigate Medicare outlier payments to hospitals?

In October 2002, reports were published regarding Tenet Healthcare and that system's Medicare outlier payments. These reports triggered national scrutiny of the complicated Medicare regulations that were adopted in 1989 to calculate Medicare inpatient outlier reimbursement for hospitals. The Centers for Medicare and Medicaid Services was criticized by some for not revising its regulations in the face of data over the years suggesting that modifications to the outlier calculation methodology might be in order. The government launched an investigation and Tenet, for its own reasons, agreed to a settle with the government for over $800 million, thereby stimulating the government's interest in pursuing other settlements.

 

How will Besler Consulting be impacted by this settlement?

We believe that healthcare providers who are personally familiar with Besler Consulting recognize the character, quality and integrity of our firm and our employees, and our firm's longstanding commitment to compliance. We appreciate the real value in putting this situation in our rearview mirror and focusing our undivided attention on doing the things that we need to do in order to continue to assist our clients. We are confident that the majority of healthcare providers will be sensitive to, and appreciate, the business reasons for agreeing to settle.