The Clinton Herald, Clinton, Iowa

October 17, 2013

Jury begins deliberating malpractice case

By Katie Dahlstrom
Assistant Editor

DAVENPORT — The city's legal malpractice case against the attorney who represented it in a 2009 Medicare fraud case is in the jury's hands.

After 13 days of trial, closing arguments concluded Thursday and the jury began deliberating whether attorney Michael Walker and his firm Hopkins and Huebner committed legal malpractice and caused the city damages as they represented the city against a federal lawsuit brought by former Clinton firefighter Timothy Schultheis. If jurors find Walker's negligence caused damages, they will be asked to award the city an amount they deem appropriate, with the city asking for $4.67 million.

Schultheis alleged in a whistleblower case, filed under seal in 2008, that the city knowingly submitted claims to Medicare and Medicaid that were falsely billed as advanced life support rather than basic life support in order to receive higher reimbursement rates. The case was unsealed in September 2009 after the federal government declined to intervene, prompting the city to hire Walker.

The city settled the case for $4.5 million in 2010, less than a year after Walker was retained to represent the city. Officials now allege the settlement was too much, too soon and a result of Walker's negligence.

Before the jury retired this morning, Walker's attorney Bob Waterman asked them to send a message to the city of Clinton by returning a verdict that Walker was not negligent.

Walker and his firm performed legal research, reviewed thousands of documents, retained an expert, obtained information from Schultheis' attorney, interviewed key city employees and presented a number of defenses, Waterman said. In response to the allegation that Walker was not qualified to take the Schultheis case at all, Waterman referred to Walker's experience with other federal statutes and hundreds of trials.

Walker advised the Clinton City Council to pursue a settlement because he felt the city faced a dangerous case and too many people knew what was going on and chose to do nothing, Waterman said. Former interim city attorney David Pillers also advised the city council to approve the settlement, Waterman mentioned. By not training its staff who submitted the bills to Medicare and Medicaid, the city was like an ostrich with its head stuck in the sand, Waterman said.

The city's accounting specialist Sarah Nolan, who submitted bills during the time under scrutiny in the False Claims Act case, testified she didn't check the codes for accuracy and was not trained in ambulance coding, a fact her then- supervisor, former finance director Deb Neels, knew. Looking the other way is not a defense against the False Claims Act, Waterman told the jury.

"That's this case. I could stop now. That's what this case is about," Waterman said.

He also pointed out the fire department leaders, who supplied the patient care reports from ambulance runs that the finance department used to submit claims to Medicare and Medicare, assumed those in the finance department knew what they were doing. The right hand didn't know what the left hand was doing, Waterman said. By leaving out the finance department's lack of training, the city's attorneys didn't tell the jury the whole story, he said.

Waterman also contended that EMS Director Andy McGovern did not know what he was doing when he instructed paramedics how to code ambulance runs.

"It's like out of Matthew and Luke, the blind man should not lead a blind man because they will fall into a pit," Waterman said. "We've got the blind leading the blind."

McGovern and former fire chief Mark Regenwether's repeated requests for the city to outsource billing and institute a dispatch protocol were also relayed to the jury during closing arguments. Waterman pointed out since the city outsourced billing in 2010, its ALS rate has dropped from 99 percent to 86 percent, a 13 percent decline that he credited to the fact that someone is now verifying the codes before sending the bills. Waterman called the jury's attention to the 60 percent ALS, 40 percent

BLS split reported to Walker by the billing and coding expert retained in the Schultheis case, Douglas Wolfberg. The ratio was revealed to be an off the cuff ratio Wolfberg based on his experience that was not meant to be taken as a national average. While Wolfberg testified it was not meant as a national average, Lamar Blount, an expert Walker retained for his defense, said based on information from the Centers for Medicare and Medicaid Services, the national average from 2005 to 2008 was 64 to 68 percent ALS. Jurors were also reminded of Blount's and billing and coding expert JR Henry's report stating the city had erroneously upcoded 18 percent of its claims from 2002 to 2008, which could have resulted in up to $16 million in civil penalties. Henry testified this week he had mentored Wolfberg, a point Waterman also raised in his closing argument.

The city didn't bring an expert to refute this error rate, Waterman said, asserting if the city's attorneys could have found an expert to say McGovern was right in his billing, they would have. He also criticized the city's False Claims Act expert, Ronald Clark, who had never tried a civil jury case or been involved in a legal malpractice case and did not practice in Iowa. Clark's criticisms of Walker showed a double standard, Waterman said. Clark was only given half the story, Waterman said. Clark testified he hadn't read the report from Henry and Blount, reviewed Sarah Nolan's or Andrew McGovern's testimonies or read a deposition from a Firehouse software expert that said the city's duplicate reports could not have been the result of a software glitch.

Waterman also defended Schultheis, pulling out Schultheis' "glowing" performance reviews from the 18 months he worked at the Clinton Fire Department. Besides a comment on his February 2008 review that Schultheis questioned procedures, his reviews showed a Schultheis very different from the "headstrong," "disgruntled," firefighter the city portrayed him as, Waterman said.

While the city argued Walker should have taken Schultheis' deposition, not taking it was a move that kept Schultheis from learning the "terrible" facts the jury has learned through the legal malpractice case, Waterman said.

"We'd be in the same place we are today, only it would have been a lot worse," Waterman said.