Interview with Thomas Ferrante

Thomas Ferrante is a board certified health care lawyer and senior counsel at Foley & Lardner LLP. This interview took place on October 1, 2018.


To start off, it would be helpful if you could talk about your background and some of that work that you have done that is somewhat relevant to the opioid crisis?

I am a board certified healthcare lawyer and I am with the law firm, Foley & Lardner LLP. We are a national law firm so we have offices across the country--about a thousand lawyers. I physically sit in the Tampa, Florida office even though we service clients across the U.S. and internationally. My practice focuses primarily on healthcare matters. I do have a niche in the telehouse and health innovation states. I do work with hospitals and health systems as well as startup companies to help build out medicine arrangements. I also handle a lot of matters with fraud and abuse, compliance, Medicare and Medicaid reimbursement programs. I have also helped clients with overpayments and issues regarding the Anti-Kickback Statute or the Stark Law. I do a lot of help with corporate compliance programs and things of that nature. Being in Florida we have had a long history in the past decade or two with pain management clinics, opioid issues, and other things over the years as well. It is now much more of a pervasive problem--it sort of filtered through to the rest of the country. It is not something that is new as we have been dealing with it for years. It is sad how much it has progressed but hopefully there are some policy changes coming down the pipe in ways that it can help to mitigate it almost fully.


You have worked with Anti-Kickback rules and self-referral laws. Could you talk a little more about what those rules say and your experience working with them?

So you have probably heard about the federal Anti- Kickback Statute or the Stark Law. Those are sometimes thrown out there and people may or may not know what they mean. To simplify it, really what these laws try to do is prohibit the exchange of anything of value for the referral of services that are payable by a federal program like Medicare. For example, let’s say that you have a major pharmaceutical company that wants to take out a doctor to an expensive/lavish meal or to their favorite concert. And the reason that they are doing that is to induce those doctors, almost like a bribe, to get them to prescribe drugs at certain pharmaceutical companies or drug manufacturers to their patients. Another example is having a pharmaceutical company pay thousands of dollars or having these programs where they take a bunch of doctors on a free cruise. They said that it was to provide an educational program on pharmaceutical companies. It was a little bit more disguised, but it was still meant to entice them to use a certain fentanyl spray/selection. It is not always as obvious as having the exchange of cash/changing hands with money. Sometimes it can be disguised, but at the end of the day what we are trying to avoid with these laws is an improper financial relationship between the doctor and the drug company. This can influence or distort that doctor or physician’s best judgment for the patient. It also undermines that patient’s health and trust and I think that it is particularly troubling when the drugs are opioids. In a nutshell, that is what the laws are about and how they function.

You’ve worked with Medicare and Medicaid reimbursement and compliance. What other kind of issues arose when you were working with that?   

Medicare is probably the biggest payer of healthcare dollars in our country of the United States. Some of the big headline cases talk about X, Y, Z  hospital systems or A,B,C pharma company has to pay millions of dollars in restitution or a fine. Those services involve federal healthcare program dollars, like the Medicare program. So there is another law called the False Claims Act and that is the law that is the big sword that the government will use to extract these very large settlements. The Medicare and Medicaid programs involves payment from the government.  The way that the payment system works is that the pharma companies, the doctors, hospitals provide services and then the bill the Medicare program. The Medicare program usually pays it right away, and then can later audit and see that there was certain negative or nefarious activity that will try to come and take all that money back due to it being billed inappropriately or add big damages to those fines. They would say that there was illegal activity involved like we talked about with some of the bribes that were put forward in front of doctors. That is kind of where you can see those big numbers. Those cases can be brought up with what is called a Qui Tam lawsuit or what is more commonly known as a Whistleblower. That whistleblower, the person who blows the whistle, can receive part of that overall recovery and it provides a really strong financial incentive to report any illegal behavior. There are people who have had a really large recovery because they turned in a healthsystem and received part of that money.

What was the formal term for the Whistleblower?     

It is the Latin term, but I cannot recall the Latin. But it is Qui Tam, and it is a type of plaintiff law case.

So these Whistleblowers were people who worked for the clinic or the health provider?

Yes, it can be! The most common type of Whistleblower is a disgruntled employee--pharmaceutical company, drug manufacturer, hospital, clinic. They maybe find out if some bad activity happened, try to report it and maybe they get fired or disgruntled with the company. They may run into some plaintiff lawyer, or a Whistleblower lawyer and then they will develop their case. What happens with that case is that they will usually present it to the government and the government will take a look at that case. If they think that it is worth pursuing, then the government will take over the case for the most part and does a lot of the leg work themselves. Once the government gets involved, then it is usually bad news for the health system. Usually there will be some sort of health settlement that will come out of that and the dollar amount would depend on the amount of payments for the services that were rendered. There have been several cases where they have been in the several hundred of millions in terms of settlement numbers. This means that you are talking about a plaintiff that can get millions of dollars just for turning that healthsystem in.

How long has the False Claims Act been a law for?

It is actually a law that came out of the Civil War era. That was back when there were private companies that were providing services to the government and the government was paying them. I think that this had something to do with weapons, roads, and railroads and things like that. In the past few decades it has been used by lawyers, both government lawyers and these Whistleblowers to have an extra strong arm for the healthcare industry and oversight in the billing and reimbursement landscape for healthcare. Again, it is typically only applied to government dollars so if you are only taking commercial insurance or cash pay then it may not apply. But then there is also each state and they may have their own state version regardless of who is paying. So if you are a pharmaceutical company or a healthcare company, another business in compliance, or a compliance officer,  you have to be careful since it is a very regulated industry and there are a lot of rules. Even if you have a good intent, it can be quite easy to foot fault especially with the kind of dollars at stake today.

So these state laws that also deal with fraudulent claims, they can also apply and they are not preempted by the federal law?

No, they are not necessarily preempted. The federal law usually just applies, again, if there is a government program involved. This will usually trump in that case. But let’s say that you are a doctors care office that does not participate in the Medicare program and let’s say that you only take Blue Cross or Aetna health insurance or only cash from your patients. You cannot then just say that since you are not involved with Medicare that you can go around doing all these illegal things that other Medicare participating providers can’t do. That may not necessarily be the case, depending on what state you are in--you may be in a state that has a law. Most states do have a law: California, New York, Texas, etc. In those states, you can have an enforcement and usually in those scenarios it’s the insurance companies that will go after you, or even potentially the state attorney general.


I know that the state of Florida has had some issues in the past with the housing market before the crash in 2008. Were there also issues with pill mill doctors that were just taking cash and writing too many prescriptions?

There was a big issue down here in Florida. I think that one point in time there was a road, I believe in South Florida, and on that one strip of road there were 31 pill mills that were there. There was a lot of abuse--especially in the early 2000’s and the 90’s in the state of Florida with pill mills. The state of Florida did change some rules and they made a Pain Management Clinic Registration requirement. That helped to crack down on it. They also diverted resources to combat that on the state level and to help alleviate it. I think that it has come a long way, but it is still a hot area. I think to this day, there are areas and pockets in the state where it is just off the charts for the number of prescriptions coming through. It is an ongoing battle to state the least.

Generally when people think of doctors, they think about people who are generally well compensated and upper middle class/professional class. Doctors go through all the hurdles and years of medical school, residency, took the Hippocratic Oath. Based on what you have observed, what makes them suddenly open/operate pill mills? It seems a bit counter intuitive.

I think that is a good question. There are a number of reasons and it all depends. I think that there are different categories. There are the category of doctors out there that are just a bad guy/ bad girl. They see it as a way to make a lot more money and they just go down that path. These are certainly highly addictive drugs and there is a black market for them with a lot of money to potentially be there. So I do think that there is a group of  people who are incentivized by the financial gain even if people’s lives are at stake. Similarly, I think that because there is such an issue, especially in a state like Florida, some of it incentivizes medicine. We have it in our culture today where, with the way that our society is set up with the medical malpractice and sometimes ambulance chasing, there is the development of a legal and liability landscape. Doctors are concerned and they fear a patient who could argue that they are not being given the proper medication that they need for their recovery or their pain. They will err on the side of prescribing those kind of pills and services to the patient since they are worried about their own liability. Depending on the medicine culture, you can kind of sprout from that. Another one is that a lot of it is because there may not necessarily be a pill mill and sometimes the patients are tricky. You can have a lot of these patient shoppers and they will go from doctor to doctor and find a way to get it. Sometimes, if a doctor slips up and prescribes someone without the appropriate background or requesting proper medical records. If the DEA sees it, it can be unfortunate. Sometimes even if they are trying to do the right thing they can slip up. I think that there are varying degrees/reasons and I do not think that there is one answer to that question.

I know that Florida has also had an issue with rehab centers, and the laws may have changed since the time where I was reading about it, where the licensing requirements to open a rehab center were not particularly stringent. A lot of them were opened and in some parts of the country they would do tests and other kinds of procedures where they would be getting reimbursements from them and a lot of them were not necessary.  What did you observe in that space?

That is actually an issue or a problem that I would say is not as unique to just the state of Florida. I would say that a problem that we see in all states in our court cases, and instances where all that comes down to would be the medical necessity. The primary way that doctors get paid in our healthcare system is on a fee-for-service (FFS) basis. They are almost incentivized from a financial perspective, as well as from a defensive perspective in fear of being sued, to order more tests. This is part of our healthcare culture right now for better or for worse. Combine that with well, maybe you will have actors taken into their clinic, and I have seen them take homeless people off of the street, state that they are providing them services (whether they are or not), and billing Medicaid or Medicare to provide additional revenue. That is an issue in not just substance abuse or rehab facilities, but we have seen it come out of nursing homes, home health and physician offices.

So that looks like that is an issue that can pop up in multiple areas within healthcare and not just with opioid prescriptions or things related to opioids. It’s more of a broader issue?

Exactly. There are certain pockets, like home health, that for a while were under a higher level of scrutiny because there was a greater concentration of abuse with the federal program. We have seen it in the medical equipment industry--they also had some heat on them. Those were some areas that now, are dealing with the opioids as well. There are different trends over the years of what industries/service types that end up having an increase in issues of taking advantage of the program, and  also where the government will focus its attention on to audit and oversee.

Throughout your practice, what was the most memorable experience that you had? Was it something that you observed or something that someone said? What really stuck with you?

Oh, that is a tough one. I worked for quite a bit on a certain hospital transaction, where it was a public hospital that was selling itself or bidding itself out to potential buyers. There was for-profit hospitals coming in to try to buy it as well as not-for profit hospitals. It was a rewarding experience because it was a failing public hospital and the community desperately needed the hospital. It was great to work on a deal where you had some buyers with resources. Ultimately it was a not-for profit hospital that ended up winning the bid and taking over. It was great to see this kind of consolidation where a community did not lose a hospital. It was kind of a rural area with a elderly community, and those folks don’t travel as easily as some younger folks do. It would have been a great burden on that entire area if the hospital went away. The fact that it was saved and that I got to kind of help with that deal, I thought was pretty rewarding. I have gone back there since and the town is just as vibrant as ever. It is a small, sleepy beach town and the people there are doing well! They have state of the art facilities now in their location because of the transaction, which is great.   

You have mentioned how doctors basically work on a Fee for Service (FFS) basis, and how that can sometimes lead to a perverse incentive to order more tests and do more things in order to be a higher reimbursement. Do you see there being a policy solution to that? Or do you think that the solution would have to involve a change in the system of how compensation is done for doctors (larger system of change)?


The Fee for Service program is the Medicare way of payment--around since the creation of Medicare in like the 50’s or 60’s. And then you had the advent of the HMOs that came about in the 90’s. Today now we are experimenting risk sharing, or capitated payment. This is where, instead of getting paid for each test that you perform, we work with what is called a value based model. In this model, the doctor takes a population of patients and are incentivized and paid to keep them healthy. This would be a capitated rate, which would be a per person/member per month. Let’s say that I get assigned to me 1000 patients per month. They then say to the “TJ” Health System, “take care of these patients and we will give you $50 per patient per month. If you can treat them and it only costs you $30 per month, then you can keep the upside and that’s how you can profit. If you treat them and it costs you $60 then you will be losing money and you won’t do well.” It then incentivizes the health system to really implement strategies with preventive care and really try to control costs with holistic approaches. It has the systems being more proactive rather than reactive, in a way that they try to keep people healthy. So that is where I think the industry is trending. It is a slow turn in that it, our health care, does not move quickly. I do see it trending that way and I think that’s the future of healthcare and the way that we will ultimately be able to control our out of control spending in the U.S. Healthcare system.

I know that you have represented clients investigated by various federal and state agencies. Were there cases where the client did not necessarily have nefarious intentions, but it was simply a matter of misunderstanding some of the rules or something of that sort?

A situation where it was about getting to know the rules more and complying with them?

Every single day. It is a very complex regulatory scheme. There has been very few cases that I have been involved in, where I have defended the client, where I thought that they were a completely bad actor. Typically a lot of these rules are counterintuitive and sometimes they can be very technical. The Stark Law is a very strict liability statute, which means that it doesn’t matter if you are a saint and try to do everything right. If you technically fall outside the letter of the law, it doesn’t matter. You will be automatically fined and you will automatically be seeing a decent violation. That’s what strict liability means. The other statute, the Anti-Kickback Statute, is a little bit more of a subjective standard. There’s an intent based requirement to it. The government’s job is to look at the case/facts, and if they think that there’s even one purpose of an arrangement, that one purpose could be bad. So let’s say that maybe they are paying the doctors for something that they maybe shouldn’t, but that’s a small part in the overall arrangement in helping everybody, really good for the patients, good for the community etc. The government’s position is that it doesn’t matter. If one part of the arrangement is illegal, then it taints the whole thing, and they can come after you. They are trying to discourage that type of behavior. So yes, I have seen all different kinds of shades of grey and it depends on what it is exactly the government can hold your feet to the fire and put you in a difficult position on. They try to  present to people upfront what the lists are. But sometimes there is not just a straight up black and white answer, and it is a little bit of a risk analysis. These providers and pharmaceutical companies then have to look at it and make an assessment and move forward with their business model in the best way that they think they can do that.

In general, do you think that the regulatory scheme that is in place sometimes goes too far or do you think that it sometimes doesn’t go far enough? Or does it depend on specific areas?

I think that it depends on the lawyer. There are some parts of the Stark Law that for a long time, for example, that technically if you didn’t have both parties sign a contract, let’s say that someone forgot to sign or they didn’t have a copy of the contract, you could get into trouble. Technically it could cause all of the services that your doctor did be called into question. If it was a brain surgeon or a big orthopedic specialist then it could be millions of dollars. The hospital system is then in a mess with a non signed contract and confused as to how it’s regulate. Sometimes you start walking a little bit too technical. The CMS, which is the administrative agency that administers and oversees that law, had loosened up some of its interpretations and tried to come up with ways so that it would be a little less burdensome. But there are those that advocate against the Stark Law and say that it is too much of a drag on the healthcare history and the system and doesn’t really provide much benefit--not level to its burden. That’s one piece. There’s instances where maybe the regulation and the healthcare history and the pharmaceutical manufacturers from the drug advertising will then fight back. I think that some could argue, given the current opioid addiction crisis, that that should be addressed as well.   

When it comes to what happened with the opioid crisis, with people becoming dependent on opioids, what role/responsibility do you think pharmaceutical companies (like Purdue) should have in the effort to alleviate the crisis?

That is a tough one. I think that the first one is to really adhere to the compliance and the laws that are currently out there. The laws and most policies are out there to really disconnect the financial incentives of having doctors issue prescriptions based on financial reward or a bribe versus what is in the best interest of their patient. I think that there should be more of a burden of education to really foster cultural compliance in those pharmaceutical companies and in the industry. I think that education for the sales representatives as well. Most of these folks are just trying to make a living and part of what their job is to do is to go out there and sell their product. But with this industry and with the crisis, I think that this needs to be regulated and tailored and to take a step back and think about how the message is being communicated. To see how the drug itself is being marketed correctly for off-label use in a way that could keep the pharmaceutical company from potentially causing harm to the patients out there. I think that having a better understanding of the laws out there and then maybe having more investment from the industry as a whole into education to its customers and its own sales representatives. As well as the investment into new medicinal solution that can help with the addiction and help the people currently having problems with them.

I think that those are all the questions that I have for you. Are there any additional thoughts or ideas that you would like to share?

I would be curious to know what your thoughts are on what you think is going to be the best solution with the current opioid environment.

I know that it is complicated and I know that pretty much every state now has a prescription drug monitoring program, which can help with things such as the doctor shopping and things like that that were happening. I also know that there are concerns that the pendulum could swing too far the other way, and basically the new focus on less opioid prescription could adversely affect patients that genuinely suffer from debilitating pain. Of course you also have a significant population of patients who now have opioid use disorder and they can no longer have access to opioid legally. They then go towards getting opioids illegally. I know that it is very complicated and there have been efforts to have more medication assisted treatment and make sure that people have access to it and that it is covered by insurance (Medicaid). Hopefully that is something  that can help the population/patients that have been affected. I think that in general it seems like there is also just a culture where one of the drawbacks of the move to managed care is that doctors would have to see patients faster. It was much easier to write a prescription for something and then that would help the patient as opposed to something more time consuming. I also know that when it comes to pain management, there have been explorations of alternative remedies, such as physical therapy and acupuncture and things like that. However, I also know that it is much easier for insurance companies to cover just a prescription for a bottle of pills as opposed to something that would take multiple sessions/might be a cap onto how many are covered. I have been reading an article about someone that was on medication assisted treatment. The copayment that she had was much higher for the medication assisted treatment than had been for the opioid painkiller that had made her dependent in the first place. I think that there are issues where changes in policy can make a difference, but I also do think that there needs to be a change in the culture. If someone does become injured, they should be able to have those kind of opioid based painkillers, and there is a context for that. But in other cases, I think that they should try something else first. Like you said, it is a complicated system and there are many factors at play. There is no single magic bullet that is going to fix everything. It looks like at a lot of states have been trying to do reforms to help alleviate the crisis and will continue to do that--including Florida which have had many challenges with this very issue. So those are kind of my thoughts in a nutshell.

So from your perspective if you could change any policy (state level, federal level or medical licensing standards) to help alleviate the opioid crisis, what would you consider looking at?

So this one is probably more controversially charged and that is because I work alot in the healthcare technology state. But because of there was a law that was passed, I think in about 2008, that was called the Ryan Haight Act. Back then, there was sort of a proliferation in the 90’s and the early 2000’s of a lot of these online pharmacies. You could just go online and basically click a button or two and get controlled substances sent to your door. There was a minor at the time, or a high school student, that overdosed and it was due to this online kind of pharmacy. The reaction that came out of circle Legislature was to try to put a crack down on the drug diversion and some of these online pharmacies, and pass a law. To put it very simply, one of the things that the law requires is that you have to have an in person visit with the patient--there are some exceptions. However generally speaking, you have to see a patient physically in person before you can write a prescription for a controlled substance. There is a lot of merit to having that requirement. In today's age where I think the medium of healthcare delivery is leaning to a more technological solution. It points to not only decrease the cost of care but to also increase access to those in a rural area. It is a little bit more of a drag on what some of the potential benefits could be. For example, for some of the medical assisted treatment/therapy that you referred to in those medications, like suboxone, or some of the things that are substance abuse facilities and some of the education coaching that goes along with that or behavior therapy as well. A lot of that can be, I think, helped by using ___medicine, for example. There is a shortage right now, I think of psychiatrists and I think that the opioid crisis can go hand in hand with some of the behavioral health issues that we are having today. The prescribing and the use of behavioral health treatment can really help with it as well. I think that substance abuse disorders are very well connected often times with the opioid addictions. I think that could be a great way to open up the mental health treatments using technology. However it is currently outlawed because some of the laws from when the internet pharmacies were really prevalent and caused a lot of issues.

It is so interesting looking at it from a mental health perspective. I know that one of the challenges is that there is going the be differentiation between services for physical health and the services for mental health--they being viewed as two separate things. Both the medical system and the insurance system see them as separate in terms of the resources that are devoted towards one versus the other. That is a very good point that it should all be looked at holistically.

Right! And you mentioned it as well like, for example, when a patient has some addictive tendencies or has a history of substance abuse or behavioral/mental health issues, that going into post surgery or dealing with some chronic pain, I think that the doctor should be made aware of that.  Also having a mental health counselor that can help to come up with a plan of care or a health treatment that can strongly discourage the use of these opioids, even if there is some pain, and maybe encourage the alternative methods. In this type of situation, you have someone with certain mental health issues and they are higher risk of the opioid addiction than others. Just having a doctor just prescribe it based on the pain symptoms, is not always in the best interest of the patient.


You were right in describing that there are just so many different aspects of the system. Part of what made me really interested in the opioid crisis is that there were a number of decisions that were made or structures that were set in place where, if they had been different, the opioid crisis would have been different. It may not have been as severe as it has been. It was interesting to look at it analytically and seeing how it worked exactly and what was happening/what incentives were being created, and seeing what kind of expectations were there from both the side of the patient as well as the doctor. Also looking at what was the cause and effect, and how could things be changed or at least ameliorated from that perspective. I think that you have such a great vantage point in your practice since you can see it from that perspective. That gives you a lot of insight and I can tell from how you were describing everything in this interview. You really have that great inside view of how that all kind of happened.

Yeah, it wasn’t really sort of one thing that I think is the cause or the solution. It is kind of all tied together and there are a lot of stakeholders and a lot of things that we have to change to make our healthcare system better, and our healthcare system moves slowly. It is certainly not an easy thing to fix, our healthcare system, and how it works is extremely complex and I think that is part of it too.

Definitely. There is no single magic bullet that will fix everything. It is more about negotiating different priorities and balancing different things. Where do you see Florida, with where Florida is now with regards to a lot of these issues, in the future? Do you see things getting better or do you see some challenges coming up ahead that have to be endeared before things turn around?

I think there is going to be some continued challenges. I think Florida has come a long way from where it was a decade ago on some of these issues. Some of the laws and the policies that were passed were helpful. Some people see it as a good thing and others argue against it. Florida in 2016, from a constitutional referendum with the population, passed a medical marijuana law. Some people advocate say that there is a alternative potential treatment there. We are a fairly conservative state so there are definitely a good enforcement environment to try to stop drug diversion. At the same time, some of the medical marijuana activity could potentially be put into place to help with alternative treatment or opportunities for chronic care. I think that is sort of where we are headed now and what the current status of the state is. Still, I think that with the elderly population and the size of our state, I think we are the third largest or second with regards to population, there is going to continue to be kind of those issues. We are also a very international state given our proximity to South America. Historically it has been a state where some of the scripts get put on the black market and filtered up. They don’t necessarily stay here and they will get sent to other states where they have problems like West Virginia, Kentucky, Vermont. Some of the times it originates down here in Florida given the elderly population. I think that part of it is to crack down on those clinical pill mills that are not doing it right and try to keep encouraging the ones that are doing it correctly to be successful.

I would assume that also, and it would seem that a lot of people in the medical community are now more cautious. I am sure that they know about how the opioid crisis has flared up the way that it has. They also probably know about what they have heard on the news about various people being indicted for insurance fraud and other violations of the law.

Oh yes certainly. I deal with clients all the time that have been under investigation for it and it certainly changes the way that they practice going forward. There is still tension because at the end of the day, some of these physicians are dealing with patients in pain and are monitoring/modifying the dosage and they believe they should be allowed to use their professional medical judgment to manage this person’s pain. That is something we cannot forget too--that there is some good that come out of these drugs. It is all about balancing that with those that are just trying to come back everyday and issuing dozens of pills a day. It just has to be monitored. I know that Florida for a while was considering reducing the pill capacity for something like only being to get two weeks worth, and then having to go back to get a new script. When you really have some tunnel vision and are looking at the opioid crisis, it is easy to say that of course that pill capacity will stop it and help the crisis. But then you have to look at those that really need the medicine, especially where someone has a illness where they cannot move very freely. So to require that a patient come every two weeks when it used to be every two months, that puts a lot of extra stress and burden on the patient. It is not necessarily healthy for them either, and that is what I think is the hard part about this. You do not want to throw the baby out with the bathwater when we approach this. I think that we should be more precise and surgical with how we address the issue, and it is tough to do that.


Were there any other additional comments that you would like to share?

I think that this is a great topic for a podcast. I think that it is all something that we need to be educated about. I happen to work in the healthcare industry on the legal side, but I am also a user and consumer of healthcare services in the United States, as we all are. I think we all need to me made aware of how the system works and how it could affect us and how it affects our fellow people/citizens here in the United States. I think it’s a great concept.

Thank you so much for sharing your wisdom. Looking at it from the perspective of someone working in healthcare compliance as an experienced attorney is very insightful. I really appreciate you taking the time to talk about your work. Thanks so much.