Architrave Attorneys Move to Dismiss Earlier Allegations from Dannenhoffer Suit

The attorneys from Architrave Health, the management company for the coordinated care organization in Douglas County, argue that earlier contract reductions ordered by Dr. Robert Dannenhoffer to Architrave’s parent company were part of his job, and not an uncovering of fraud protected under whistleblower laws. Dannenhoffer, the former CEO of Architrave, sued his former employer this year, arguing he was fired for reporting Medicare and Medicaid fraud at the organization.

Attorneys from Architrave Health and Mercy Medical Center have moved to strike two key elements of a lawsuit brought by former Architrave director Dr. Robert Dannenhoffer, hoping the judge will dismiss issues they believe are irrelevant before a jury considers the self-referral allegations.

Architrave is the management company for Umpqua Health Alliance, the coordinated care organization for Medicaid recipients in Douglas County. As Roseburg’s community hospital, Mercy co-owns Architrave along with the Douglas County Independent Practitioners Association, the physician group.

The charges that the attorneys want dropped stem from an overpayment of a special services contract for family planning services to DCIPA, and the cancellation of a $360,000 consulting contract to the group after the association showed no evidence of actual consulting.

Dannenhoffer did not renew the consulting contract for 2014, and the Architrave board voted to reduce the family planning contract in October 2014 after Dannenhoffer said the payments to DCIPA far exceeded its costs.

The attorneys from Architrave and Mercy argue that since Dannenhoffer was just doing his due diligence as CEO by purging these contracts, they do not constitute the uncovering of fraud that might make him eligible for federal or state protections against retaliation as a whistleblower:

“Neither action is alleged to have involved Dannenhoffer’s belief that he was exposing a potential fraud on the U.S. Government or anyone else. Instead, Dannenhoffer alleges that he terminated the Consulting Agreement and recommended a pricing change for the Special Services Contract because of the business impact on Architrave,” wrote Chicago attorney Linda M. Doyle of McDermott, Will & Emery.

She also said, “They have no relevance to Dannenhoffer’s claims for retaliation related to the CMS Self-Disclosure issue, blacklisting, or tortious interference. And Dannenhoffer cannot contend that these allegations should be preserved because they somehow relate to Architrave’s general state of regulatory compliance. This case is about Architrave’s alleged retaliation and post-termination unlawful conduct towards Dannenhoffer. Architrave should neither have to defend nor engage in protracted discovery concerning irrelevant and sprawling issues.”

The attorneys for Mercy and Architrave then asked for a jury trial on the remaining issues, including a federal Stark fraud violation for self-referring patients to the Umpqua Medical Group, a physician-owned clinic that is part of DCIPA. Dannenhoffer claims that he uncovered the violation, but Architrave argues that its attorneys recommended that the business self-report the violation after a compliance check. The Stark report was filed in January 2015 with the Centers for Medicare & Medicaid Services.

Dannenhoffer was fired two weeks after the Stark report, after he refused to resign.

He continues to argue that the earlier reports that cut off business to one of Architrave’s parent companies constitute a pattern of reporting unethical behavior that rankled his bosses and should be used as evidence to bolster his argument that the self-referral violations he uncovered would not have happened without him.

“Nothing in these filings refutes Dr. Dannenhoffer’s whistleblower claim that he was fired because he refused to condone or continue a pattern of fraudulent behavior,” said his attorney, Jennifer Middleton, in response to questions from The Lund Report. “It was Dr. Dannenhoffer who insisted on the legal review that confirmed the improper billings. Legal confirmation of Dr. Dannenhoffer’s concern made it impossible for the Architrave board to avoid self-reporting the violations.”

The Architrave board, which has control over most of the patient decisions by the Umpqua Health Alliance CCO, has met separately from the Umpqua board and in secret without public oversight. The Umpqua board had included a Douglas County commissioner, Tim Freeman, but after Freeman and other board members began making inquiries into the Dannenhoffer firing, they were kicked off the board, which was then integrated into the Architrave board.

In his original complaint, Dannenhoffer accused the leaders of Mercy and the DCIPA of creating Architrave as “a vehicle through which [they] could funnel cash to DCIPA, Inc. to fund its budget.”

Oregon’s CCO system has been plagued by accusations of poor oversight from the Oregon Health Authority, and wildly differing payments to the 16 CCOs based on unorthodox actuarial methods and accounting of costs at CCOs that have generally not been made available to the public or to legislators.

In addition to the uproar in Douglas County, in Lane County, the Medicaid money in the Trillium Community Health Plan CCO, was seen as so lucrative that it was bought up by the out-of-state for-profit Centene Corporation, and Trillium has sued the state and the Register-Guard to prevent the disclosure of the physicians who profited from the deal.

And in Portland, FamilyCare CCO continues its lawsuit after the state ordered it to repay $55 million after the Oregon Health Authority reset its rates at a much lower level than its competitor, largely based on reported costs of the new members from the Affordable Care Act expansion, not on actual risk.

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