Mass. Hospital Double-Booked Surgeries, Whistleblower Says

By Dani Kass

Law360, New York (October 20, 2017, 7:50 PM EDT) — A former Massachusetts General Hospital anesthesiologist on Thursday told a federal judge that she’s sufficiently shown in her qui tam suit that the hospital violated the False Claims Act when double-booking surgeries, even though she hasn’t been able to provide a specific bill charging the government for those patients.

Dr. Lisa Wollman, who first filed her suit in 2015, alleges that patients were treated by residents and fellows without teaching doctors supervising, in violation of Medicare rules, and then left under anesthesia unnecessarily long to wait for doctors busy with other surgeries. She urged the court to reject MGH’s motion to dismiss, saying the examples of patient surgeries are more than sufficient to prove fraud at this stage of the litigation.

“The locus of wrongdoing in this case was not the claims processing department,” Wollman said. “Here, the fraud occurred in MGH operating rooms sealed off from regular traffic. MGH’s billing personnel, who have access to all patients’ insurance information and all claims submitted to Medicare and Medicaid, are not privy to the fraudulent conduct alleged by relator. By the same token, Dr. Wollman … has no more access to the actual claims for payment than a pharmaceutical sales representative has to the claim submissions of the physicians he or she has bribed by payment of kickbacks.”

Wollman said that during her years as an anesthesiologist at the Boston hospital, procedures with the same surgeon would regularly be booked at least two at a time, leaving residents and fellows operating unsupervised, and making patients have to get extra anesthesia if they had to wait for surgeons when needed. That extra anesthesia, which is charged in 15-minute increments, constitutes unnecessary, excessive and dangerous prescribing, Wollman said.

It would be “highly implausible” that none of the thousands of patients involved in these surgeries were covered by Medicare and the state Medicaid program, MassHealth, she said.

Under Medicare regulations, fellows and residents may handle parts of a surgery alone but the surgeon must be there for “key and critical parts.” Wollman said she witnessed several surgeries where no licensed surgeon took part at any point, meaning that they couldn’t be there for those parts.

But the hospital’s motion to dismiss said that the rule is vague, allowing surgeons to decide what parts of surgeries are critical or key and therefore what they need to be in the room for and what they do not need to be present for.

The motion goes on to claim that Wollman doesn’t allege that actual claims were billed to Medicare or MassHealth. It also said that she doesn’t name a specific surgery where a physician wasn’t present for part of the surgery they defined as key or critical, and that such a claim then followed, or name an instance where two surgeries overlapped and the key or critical parts overlapped as well.

The hospital’s motion also said that Wollman’s suit fails to show that Medicare and MassHealth would have denied paying MGH if they knew about the overlapping surgeries, meaning it doesn’t meet the materiality bar set in the U.S. Supreme Court’s landmark Escobar decision.

The anesthesiologist’s opposition to the motion argues that the omissions were material, as MGH allegedly violated regulations that were conditions of payment. Wollman adds that the First Circuit has expanded on Escobar, making it clear that dismissal before discovery isn’t okay if there’s evidence that the alleged violations were material.

The government in February had said that it wouldn’t intervene in Wollman’s suit.

Representatives for Wollman and MGH didn’t immediately respond to requests for comment Friday.

Wollman is represented by Laura R. Studen of Burns & Levinson LLP and Reuben A. Guttman, Traci L. Buschner, Justin S. Brooks and Elizabeth H. Shofner of Guttman Buschner & Brooks PLLC.

MGH is represented by Martin F. Murphy, Neil Austin and Julia G. Amrhein of Foley Hoag LLP.

The case is United States of America et al v. Massachusetts General Hospital Inc. et al, case number 1:15-cv-11890, in the U.S. District Court for the District of Massachusetts.

Article published at www.law360.com

Medicine Is Not Manufacturing

by Caroline Poplin, MD, JD, FACP

It is widely recognized that the continuous increase in U.S. health care costs is unsustainable, even as some Americans remain uninsured and cannot access care. Recently, with encouragement from the Center for Medicare and Medication Innovation, many are honing in on a new, characteristically American solution — namely, that private enterprise should take over medicine and “transform” it. The idea is that private corporations, driven by the prospect of profit, will compete in the marketplace to attract customers, improve quality, and reduce costs while employing the latest business-management techniques.

As a clinician who has cared for patients for more than 25 years, I am skeptical about this approach. My skepticism does not stem from nostalgia; rather, it reflects my concern about inadequate analysis and possible unintended consequences.

A Brief History of Medicine, from Ancient Times to 1965

The practice of medicine — caring for the sick and injured — is probably as old as humanity. The earliest records suggest that ancient practitioners were what today we would call professionals: individuals of great learning who adhered to high ethical standards, with a focus on patient welfare — perhaps because they understood that they were privy to their patient’s most intimate secrets at a time when these people were especially vulnerable.
The U.S. will now use corporations and modern management techniques to bring medicine in line with the rest of American industry, reducing cost by ‘producing’ health on a mass scale.”

The most familiar of these standards is the so-called Hippocratic oath. Perhaps the earliest healers understood that a high moral code was necessary to induce trust, which was in turn critical for the best outcome. Also, they were surely aware of the heavy responsibility that they bore, with even a small mistake having potentially devastating consequences. I believe that this high moral code is the reason that, for thousands of years, physicians have been respected and allowed autonomy in their practice. Even as Western medicine has become more scientific over the centuries, the central role of the physician-patient relationship, with the interest of the patient being paramount, has remained the same — until recently.

From 1965 to Today: Unprecedented Change

Over the last 50 years, medicine has totally transformed. Medical knowledge is advancing at an exponential rate, and new techniques for diagnosis and treatment are continually being invented and improved. No longer can an individual physician master all or even most of the available information. As a result of these advances, many illnesses that would have been fatal 50 years ago have become chronic, with patients now requiring treatment for years or even for life. Thus, physicians now must work closely and continuously with one another and with other health care personnel, including mid-level providers, technicians, physical therapists, and so on.

The other important consequence of this vast expansion of medicine is cost. Modern diagnostic techniques, procedures, drugs, and devices are as expensive as they are effective. Nowhere is this more true than in the United States, where our leaders believe in the free market and shun price controls. And the rate of cost growth is unsustainable.

Diagnosis and Treatment (or, Problem and Solution)

Health economists have decided that doctors and patients have caused outsized cost growth by providing and demanding, respectively, wasteful expensive medical services. Years ago, Dr. John Wennberg demonstrated that the utilization of medical services was much higher in some areas of the country than in others, despite comparable populations and health outcomes, which the policy community assumes to be waste. Moreover, policymakers have concluded that fee-for-service has encouraged doctors to provide “volume” instead of “value” (even though fee-for-service is regularly used in both high- and low-cost areas), with third-party insurance insulating patients from costs that would otherwise discipline demand.

In response, our leaders decided that the solution was to revolutionize care delivery and reimbursement systems. At the end of the 20th century, medicine throughout the OECD (Organisation for Economic Co-operation and Development) was still primarily a cottage industry. The U.S. will now use corporations and modern management techniques to bring medicine in line with the rest of American industry, reducing cost by “producing” health on a mass scale. Management will identify valuable care and will organize doctors and other health care personnel to provide this care efficiently by setting performance goals, handing out bonuses and penalties, naming and shaming slackers, and encouraging everyone to compete to meet corporate goals. Doctors still “grieving their loss of autonomy” who don’t get with the program are fired. For-profit Accountable Care Organizations (ACOs) will be so efficient that there will be money left over for robust executive compensation and maximum shareholder value. The key metric under this model is return on investment.

To achieve these goals, executives manage their organizations with the use of elaborate electronic systems that meticulously measure what everyone does, and how quickly they do it, in order to collect Big Data, which in turn is expected to generate Big Insight. Economists predict that vigorous price competition among ACOs will finally bend the cost curve (although consolidating is easier, more profitable, more common, and less likely to reduce cost growth). Consumers will play a key role by switching providers whenever they find care at a lower price, just as they do when purchasing groceries.

Why Medicine Is Not Manufacturing

Nevertheless, the principles of for-profit business are different from those of medicine. Business generally looks to what consumers want, not what is best for them. The idea is to produce what consumers like, or to persuade them to like what is produced. Instead of “first, do no harm,” a central catch phrase of business is caveat emptor (“let the buyer beware”). Businesses are comfortable promoting products that harm consumers as long as the products are legal (e.g., cigarettes, junk food, etc.), and they do not have a fiduciary duty to their customers. In fairness, ACOs believe they know better than their customers what is best for them, and align the incentives of physicians with the goals of the organization rather than the patient. Of course, if there is a problem, physicians are still personally responsible, whereas executives are protected by limited liability. For-profit businesses succeed by promoting their most profitable services to the most profitable consumers, whereas nonprofit hospitals are expected to serve their communities. And, in the 21st century, business routinely takes money out of an enterprise to distribute to shareholders, rather than reinvesting it.

Whereas a key to business success historically has been standardization, Wennberg demonstrated that American medical practice is characterized by considerable variation. To my knowledge, no one has carefully investigated the reason for this variation beyond observing that it is greatest in areas of significant scientific uncertainty. Analysts frequently assume that this variation is simply a function of physician greed, patient fecklessness, and opportunity — that is, doctors provide unnecessary services in some geographic areas because they can, because they have monopolies, because insurance policies are too generous when patients demand such services, or because of some other reason — but the only factor ever actually identified is that there are more services in areas with more doctors.

Business leaders prize continuous change and innovation, especially disruptive change, to stay ahead of the competition. In medicine, especially when evidence for new approaches can be thin and when anxious patients value predictability and reliability, the value of continuous change is more ambiguous.

Unintended Consequences

Electronic health records (EHRs), which all physicians who participate in Medicare are required to use, illustrate the difference between business and medicine. Vendors design EHRs for managers, not for physicians or their patients. These records measure everything that providers do and assess the associated results: a fundamental tenet of management is that you cannot manage what you cannot measure. However, some of the things that are most important to a sick patient — time, empathy, compassion, continuity of care — cannot be easily measured, and therefore do not count. Moreover, what physicians truly want (and what patients expect) is a completely interoperable record that includes all of the available information about each patient. And, as we know, EHRs are an important cause of rising physician burnout, now believed to affect almost half of American doctors.

More subtly, but even more importantly, the for-profit business mindset is changing the mission of medicine. It is becoming clear that the way to save money in medicine is to focus on the sickest patients — for example, by providing social support such as housing and transportation as well as close medical supervision. However, the way to make money in an ACO is to focus on population health — that is, to “maintain the health” of healthy consumers — because there are more of them, the cost is low, and the outcomes are excellent. But we now know that the health of any population is primarily a function of the social determinants of health played out over years. No ACO, however large, can control these factors. Medicine plays only a small role in true population health.

The Upshot

Certainly, medicine can learn from other disciplines such as business. However, it is possible that some functions do not work as well in an explicitly for-profit setting, at least in this country: consider, for example, for-profit universities, private prisons, for-profit nursing home chains, for-profit hospices, and even ambulance services. Indeed, in a New Yorker article profiling McAllen, Texas (the city that once had the highest health costs in the country), a cardiologist told Atul Gawande that “We took a wrong turn when doctors stopped being doctors and became businessmen.”

Yes, there are business aspects to medicine. But to treat medicine as just another business is to deny its soul, the essential element that has given patients comfort and relief for thousands of years and does so even today.

Caroline Poplin, MD, JD, FACP
Of Counsel and Medical Director, Guttman, Buschner & Brooks, PLLC; Columnist, Medpage

 

Source: NEJM Catalyst, https://catalyst.nejm.org/medicine-not-manufacturing-business/, October 18, 2017

Celgene to Pay $280 Million to Settle Fraud Suit Over Cancer Drugs

The pharmaceutical company Celgene has agreed to pay $280 million to settle claims that it marketed the cancer drugs Thalomid and Revlimid for unapproved uses, the company said on Tuesday.

Under the terms of the settlement, which resulted from a lawsuit filed by a whistle-blower — a former sales representative at Celgene — the company will pay $259.3 million to the United States and $20.7 million to 28 states and the District of Columbia.

. . .

“The company got the idea that it could be fast and loose with what it was saying about its drug because it was selling to cancer patients who might be in need,” Mr. Guttman said. “At the end of the day, what this is about is that even when you’re on life’s edge,” he added, a company “can’t break the law by off-label marketing a drug.”

. . .

The settlement was reached after federal prosecutors declined to intervene in the case, although they continued to monitor it. Under the federal False Claims Act, private citizens like Ms. Brown can bring a suit against companies in the United States and share in any recovery. The amount of her reward has not yet been determined, Mr. Guttman said.

. . .

Read the full story here.

Whistle-blower files suit over alleged double-booked surgeries

By and
The Boston Globe

Orthopedic surgeons at Massachusetts General Hospital repeatedly kept patients waiting under anesthesia longer — sometimes more than an hour longer — than was medically necessary or safe, as they juggled two or even three simultaneous operations, according to a federal lawsuit that alleges frequent billing fraud at the prestigious hospital.

Dr. Lisa Wollman, a former anesthesiologist at Mass. General, alleges in the lawsuit that at least five surgeons endangered patients by regularly performing simultaneous surgeries. Wollman charges that the doctors also defrauded the government by submitting bills for surgeries in which they were not in the operating room for critical portions of procedures, leaving the work to unsupervised trainees.

Wollman said she witnessed surgeons performing simultaneous operations repeatedly from 2010 to 2015, when she left MGH for New England Baptist Hospital. She said hospital policy gave the doctors financial incentives to do more procedures, and they never told patients they would be going back and forth between operating rooms.

“This often meant an unwitting patient was left fully anesthetized — unconscious, paralyzed, intubated, dependent on a ventilator to breathe — for longer than medically necessary, often in the care of trainees, without the backup of a properly qualified surgeon, despite legal requirements,’’ said the suit filed Wednesday in US District Court in Boston.

Mass. General has previously disputed the validity and importance of virtually every complaint about surgeries that overlap, saying there’s no evidence any patients have been harmed. On Wednesday, Mass. General released a statement defending its approach to surgery: “The MGH continues to believe that its practices comply with all applicable laws and regulations, and the hospital will defend the claims accordingly.”

The lawsuit is believed to be the first filed by an MGH physician in the wake of a controversy that roiled Mass. General for years and prompted a national debate over safe surgical practices. Though many surgeons schedule operations to overlap by a few minutes — letting trainees close the surgical wound of the first operation while the surgeon moves on to the second — the debate at Mass. General focused on surgeries that overlapped for much longer.

There’s been relatively little research into the safety of simultaneous surgery, though a University of Virginia researcher found no increase in complications in operations that overlapped by up to 45 minutes. The American College of Surgeons last year issued its first-ever guidelines saying the practice is broadly permissible, within limits, but that “the patient needs to know” whenever a doctor runs more than one operating room at a time.

Wollman listed 16 dates from 2011 to 2013 when five orthopedic surgeons performed at least two operations simultaneously for hours. In every case, the suit said, patients lay under anesthesia longer than was warranted, increasing the risk of complications and inflating anesthesia charges.

Many of the allegations in the 54-page complaint were reported by The Boston Globe Spotlight Team in October 2015 in the first in a series of stories about the double-booking at MGH and other teaching hospitals. Wollman was among several doctors who criticized the practice to hospital leaders in meetings and in e-mails later obtained by the Globe.

The hospital dismissed the orthopedic surgeon who led the opposition to double-booked surgeries, Dr. Dennis Burke, for allegedly violating hospital policy by providing the Globe with internal records. Burke argued that he was fired for blowing the whistle on double-booking.

Wollman’s lead attorney, Reuben Guttman of Washington, D.C., argues that the doctors violated rules for two government health insurance programs, Medicare and Medicaid, which require surgeons to be present for all “critical portions” of an operation in order to get paid. If surgeons weren’t present and billed the insurers without making their role clear, it could constitute billing fraud, though the rule has seldom been enforced.

Wollman initially filed the lawsuit under seal in May 2015. It was recently unsealed after Carmen M. Ortiz, who was US attorney at the time, and state Attorney General Maura Healey declined to join the suit as plaintiffs. Wollman filed a revised version of the suit Wednesday, telling the Globe in a statement released by her lawyer that she decided to pursue it without government help because she wants to end a practice “based on deception and driven by economic benefit.”

“I am pursuing this case because my ethical obligation is to patients — past, current, and future — who are unknowingly scheduled for concurrent surgeries,” said Wollman, who worked at Mass. General, Harvard’s largest teaching hospital, for more than 20 years.

Both the US attorney’s office and Healey’s office declined to comment on Wollman’s suit.

The lawsuit, which names MGH and its parent company, Partners HealthCare System, as defendants, uses pseudonyms for five orthopedic surgeons who allegedly supervised simultaneous surgeries and, in Wollman’s view, defrauded the federal and state governments in the Medicare and Medicaid programs. But the Globe was able to identify several of the surgeons based on earlier reporting.

One of the surgeons appears to be Dr. Jon J.P. Warner, chief of MGH’s shoulder service and the highest compensated employee at the hospital about a decade ago, earning just over $2.1 million one year, according to financial documents filed by the hospital. Wollman’s suit said Warner, identified only as “Surgeon A” in the lawsuit, regularly booked two simultaneous operations in the morning and two in the afternoon.

One morning in October 2011, the suit said, a 65-year-old patient on blood pressure medication waited under anesthesia for a full 90 minutes before Surgeon A arrived from another operating room to start the patient’s surgery. The suit said Surgeon A had scheduled the two long shoulder operations to start within 15 minutes of each other.

Yet, the suit said, Warner wrote on the patient’s operative note that he participated in the entire surgery. Wollman complained to hospital officials at the time, the suit said, and Warner corrected his report.

On another occasion, one of Warner’s patients lay waiting for him anesthetized when a second surgical patient asked Wollman if she could see Warner, the suit said. It turned out that Warner was in another building on the MGH campus seeing other patients, the suit alleges.

Warner, described by the hospital as one of the nation’s foremost shoulder surgeons, could not be reached, but in the past has declined to discuss specific cases to protect patient privacy.

In general, Warner wrote in a 2015 statement to the Globe, “The suggestion that I am not managing all my patients’ care while they are in the operating room is both untrue and malicious.”

Warner noted he always performs the key components of surgery and that fellows occasionally do “noncritical activities,” such as positioning and making the initial incision.

Wollman said another doctor, identified as Surgeon B, “never appeared in the room” for an April 2013 operation when he was supposed to be the attending physician and she provided the anesthesia. Based on e-mails cited in the lawsuit that are identical to ones obtained by the Globe, Surgeon B appears to be Dr. Malcolm Smith.

Wollman said the patient suffered a serious and sudden constriction of the airways while Surgeon B was not present, though a senior trainee was. The lawsuit said that Wollman complained to the operating room director about Surgeon B’s absence, writing, “Isn’t he obligated to be there?”

But Wollman said senior medical officials at Mass. General did not follow up on her concerns “except to threaten her by saying that she had violated patient privacy and could face legal action.”

Smith could not be reached for comment, but he has previously said he did nothing improper and declined to comment on individual cases. In 2015, he told the Globe in a statement that allegations that he did not take proper care of his patients were based on “innuendo, incomplete and inaccurate data.”

But Wollman claims that incidents like the one involving Surgeon B both were frequent and continued long after the hospital placed more limits on overlapping surgeries in 2012.

“The practice of billing for unreasonable and unnecessary anesthesia was not a remote occurrence” among orthopedic surgeons, the suit says. “Rather, it was commonplace and a direct outgrowth of the concurrent surgery practice which, to succeed, required patients to be put under general anesthesia waiting for their surgeon to arrive.”

Guttman, Wollman’s attorney, said it was premature to talk about the damages if Mass. General is found to have improperly billed Medicaid and Medicare, but the costs could be considerable. The law calls for treble damages and Mass. General could face an additional penalty of at least $5,000 for each instance of improper billing, Guttman said. If Wollman prevails, he added, she could potentially receive 25 percent to 30 percent of any money recovered under the False Claims Act.

cf  www.bostonglobe.com

Reaching Into Mud Puddles

danguttman
Dan Guttman on the Tibet side of the approach to Mount Everest. Photo by Nancy Brockman

Dan Guttman has spent decades using discovery and dogged research to peer into government and industry secrets. He has found out how the U.S. environmental operating system really works, and achieved real improvements. Now he is helping students in China and the United States learn how to translate between — and improve — their respective OSs

It’s hard to define Dan Guttman. “He is part lawyer, part historian, part gumshoe investigator,” according to Government Executive magazine. He can’t really define himself. “I never decided that environment would be the backbone of my career,” Guttman emailed me, briefly in between flights from China to Washington and back. Since 2004, when he began a two-year Fulbright scholarship in Shanghai, he has been working with colleagues in China and the United States in the development of educational programs on the environment, law, and public policy management.

Guttman continued his biographical selfie: “If there has been a theme to my work, it has been learning about how people with limited means can use knowledge and law to effect change and to account for those in power.” For more than three decades, he did just that, exposing corruption, malfeasance, and danger to American workers and citizens from the legal and environmental externalities of industrialization and from the evolving obscurity of related governmental actions. Now he uses that experience while teaching at and working with colleagues in universities in China.

Asked to describe his environmental awakening, Guttman told a story. “During a walking safari along the Luangwa River in Zambia, we came across a dry river bed. But there was a puddle in the mud, maybe four feet wide. Our local guides stuck their hands in, and came out with a huge fish — which seemed to be as big as the puddle.” Life is everywhere, surviving where it seems impossible, Guttman realized. However, the event also is a metaphor for his career, which has been an ever-evolving exploration of what can be found in the muddy puddles left behind by business decisionmaking and governmental policymaking.

A poor student in high school, Guttman had political awakenings in college amidst the anti-Vietnam war and civil rights movements. “As editor of the student paper I found my candy store: the license to go out and ask questions of people at the top, as well as at the bottom and in between. When my tenure was up, as student body president I found myself in the middle of a successful student strike.” The university president was compelled to reinstate students expelled following a sit-in to protest recruiters from Dow Chemical, the maker of napalm. “This was a first experience in the unexpectedness, swiftness, and, for better or worse, power of group action.”

Starting law school at Yale in 1968, amid student protests and following the two assassinations the previous spring, Guttman found himself asking how the people in power were doing so poorly. “This was what I wanted to find out about — how did the so-called best and brightest, the social science experts schooled at fancy places, use their knowledge in the service of power?” Then he was electrified by a speech Ralph Nader gave to the law students. Guttman became a Nader’s Raider and began an analysis of that power with fellow Raider Barry Willner. What started as a study of think tanks turned into the discovery that since the mid 20th century much of the core work of the U.S. government was being done by private contractors — management consultants like McKinsey and Booz Allen, think tanks like the Rand Corporation and Mitre Corporation, and other self-professed experts.

“The Constitution and all these statutes are directed at protecting us against the abuse of power by government actors,” Guttman once told a reporter. “Well, what happens when private contractors, who aren’t covered by these laws, do much of the government’s work?” When the study was published as a book in 1976, The Shadow Government was called “pioneering research” and an “important study of a national scandal” in two different New York Times reviews.

At the start of his career, “My questions focused on how things work and not the environment as such,” Guttman says today. “But, at each step, a portion of the world of environmental governance came into view.” In 1974, he went to work at Spiegel & McDiarmid, a young law firm founded by George Spiegel, “an American original who, with a band of colleagues, local officials, and citizens, and help from the Department of Justice, were taking on the electric power industry,” Guttman says. “If there is such a thing in law, George was a genius. George’s teachings included the small — ‘If you want to hide something from a lawyer, put it in a statute’ — to the fundamental. Knowing the law and the facts are essential, but not enough.”

Opposing electric utilities and oil companies, Guttman had to learn how to deal with opponents who are powerful, have money, and question your ethics — indeed threaten sanctions for proceeding with a case. “Law school did not teach the psychology and ethics of being on the opposite side from power,” he says. “These were things I learned, often as a fly on the wall, listening to Spiegel & McDiarmid mentors debate and address what seemed like career-threatening intimidation from companies, law firms, and, sometimes, judges.”

As Guttman explains it, in the late 20th century, hundreds of small, municipally owned electric systems were dying on the vine because of inability to engage in economies through coordinated electric power supply. Large investor-owned utilities denied the cities access to their transmission grids, on the premise that they (as regulated monopolies) were immune from antitrust laws. “George saw this was not so. Representing groups of municipal electric systems throughout the U.S., we intervened in federal agency proceedings where utilities sought rate increases or other benefits. George pointed out that ‘public interest’ tests in relevant statutes compelled agencies to consider evidence of anticompetitive conduct. When the agencies ignored the cities, we went to appeals courts and the Supreme Court, winning decisions that provided a bill of rights for electric industry competition.”

As rights were obtained, the firm worked with cities to push for entrance into transmission and power pooling that had been the investor-utility preserves. “As I look back, in fighting monopoly power on behalf of citizens, and in the name of efficiencies, George and colleagues pioneered in pushing into law and practice concepts of power pooling and open transmission that are the pediments of today’s smart grid.”

Through this litigation, “I came to see the right to court discovery as a distinguishing feature of our system — an equalizer through which citizens learn things unknown to government, CEOs, and the media.” The mud-puddle metaphor holds here. Representing Florida municipalities during the 1978 nationwide natural gas shortage, he found himself doing his first ever cross examination. The witness was Ken Lay, then a Florida Gas official who would use the company as a springboard for what later became Enron.

“Lay’s testimony was flatly contrary to discovery documents showing that the alleged Florida shortage was the result of conspiracy among the gas company and oil companies, through which gas contractually obligated to the cities was sold at higher and unregulated prices on the intrastate markets.” The discovery documents led to the Federal Power Commission’s consideration of referral to the Department of Justice. The gas company (and Amoco) quickly settled the case.

In 1979, Guttman took a leave of absence from the firm to follow his muse in government service. Newly elected Senator David Pryor (D-Arkansas) became interested in contractors who do the work of agencies and soon found out that Guttman, as an author of The Shadow Government, was the leading expert. Pryor asked him to serve as special counsel in oversight investigations and hearings. “We studied the Department of Energy and the Environmental Protection Agency,” Guttman says today. “We saw that much of their activities were delegated to invisible private contractors, too often with conflicts of interest unexamined by officials.” To Guttman, the experience demonstrated the usefulness and power of congressional oversight. It was just a few years after the OPEC oil embargo that had brought America to its knees. “We discovered that in planning for another embargo, DOE called on a contractor that, unbeknownst to DOE, was doing oil planning for OPEC countries.”

In 1989, when Guttman did a second stint in the Senate with Pryor’s committee, foreign policy focused on Japan’s economic power. DOE hired a contractor to steer a highly controversial shipment of plutonium to Japan through bipartisan congressional opposition. “We found that, again unknown to DOE, the contractor was simultaneously reporting back on its work for the U.S. government — including its dealing with Congress — to Japan’s electric utility beneficiaries.” Columnist Andy Rooney wrote a humorous article on hearings led by Pryor, in which he described “Dan Guttman, a bright young lawyer who apparently hasn’t combed his hair this year but is otherwise hard to find fault with. Guttman asked many of the most penetrating questions himself, and [the DOE official he was grilling] was often unable to reply at all.”

In between his stints with Pryor, Guttman and his brother, Reuben, a labor lawyer, accidentally came to represent workers in an event yielding another serendipitous entry into environmental law. As Guttman explains today, “The workers we came to represent — janitors and oil, chemical, and atomic workers — see environmental problems that governments, the press, and top corporate officials don’t see. They are the proverbial ‘canaries.’ U.S. labor law is weak. But threats to worker health and safety are also threats to community health and safety. So, on behalf of workers, and working with environmental NGOs, we began to use, and make, environmental law.”

As school buildings aged, janitors were the first exposed to friable (flaking) asbestos. On behalf of the Service Employees International Union, he teamed with Robert Percival and the Environmental Defense Fund to bring a successful lawsuit against the Reagan administration’s EPA. “The case,” Guttman recalls, “was the first use of the citizen petition provision of the Toxic Substances Control Act, which provides for de novo U.S. district court review.”

Peering into a mud puddle, court discovery showed that EPA staff’s draft responses had granted their petition. Then, following a note from EPA’s deputy administrator that said, “Don’t piss off OMB,” the petition was denied. “We took the documents to Congress. Following hearings, with bipartisan agreement and speed that seems impossible today, they enacted
the 1986 Asbestos Hazard Emergency Response Act, which required EPA to engage in a rulemaking on asbestos in schools. Following perhaps the agency’s first use of negotiated rulemaking, the workers joined EPA to support the regulations against unsuccessful asbestos industry appeal.”

In the early 1990s, through further serendipity, the two brothers came to represent the workers who operate the U.S. nuclear weapons complex. Guttman had been asked by Nye County, Nevada, the locale for the proposed Yucca Mountain nuclear waste site, to help advise it based on his knowledge of the Department of Energy. “We organized a workshop and a guy named Richard Miller called. He was an assistant to the president of the Oil, Chemical, and Atomics Workers, which represented DOE contractor employees who were the backbone of the weapons-complex workforce. Richard asked if I wanted to help the union in its dealings with DOE and its contractors.”

The workers had little recourse under labor laws, but knew how government and its contractors had created hazards, and how sums spent to address them were too often making them worse. Could they invoke laws other than labor law? Indeed they could.

In a series of lawsuits, OCAW, represented by the Guttman brothers, drew on environmental law to successfully take on the nuclear weapons complex, and, ultimately, obtain in 2000 bipartisan congressional enactment of a law to compensate those of the 500,000 weapons workers sickened through government and contractor negligence. Once again, court discovery uncovered facts not known to top corporate and government officials. “When Fluor Daniel, the engineering firm operating DOE’s Fernald, Ohio, site, sought to replace OCAW workers who knew the hazards, discovery revealed, unbeknownst to top DOE officials, Fluor was doing cost-benefit analysis of whether to comply with the Occupational Safety and Health Act.”

According to Guttman, Fluor told the court that workers would be protected by a DOE approved health and safety plan. “But Richard Miller appeared to be the only one who had ever read the plan.” To DOE’s embarrassment, the plan stated that workers were not to volunteer health and safety information to government inspectors. On receipt of these documents, a House oversight committee invited embarrassed DOE and Fluor officials to testify. As a result, Fluor’s senior site official was terminated, DOE agreed to changes in its management, and the case was settled.

The litigation against DOE on behalf of workers led to Guttman’s being asked to serve as executive director of a presidential advisory committee to do independent inquiry into press revelations that during the Cold War the government performed human radiation experiments on unwitting citizens. The committee, composed of biomedical and radiation science, bioethics, law, history,
and data experts, analyzed and made public hundreds of thousands of documents, many from classified files held by the Pentagon and the nuclear weapons complex. At the same time, the committee conducted 30 days of public hearings and reviewed ongoing human subject research.

The report to President Bill Clinton told the story of what had gone wrong, with recommendations to address lessons learned, particularly about the relationship between government and contractor secret-keeping and citizen exposure to risk. “As with the work with Senator Pryor and the value of congressional oversight, this was an education in the value of citizen inquiry, conducted independently yet in cooperation with agency officials,” Guttman says today.

In 1996, Vice President Al Gore announced a quarter-billion-dollar deal by which contractors would remove nuclear waste from the Oak Ridge laboratory and recycle the material for unrestricted commercial use. “The nuclear workers saw the administration’s supposed ‘win-win’ as an effort to bust the union,” Guttman remembers, “and also, in replacing experienced workers, an invitation to environmental disaster without environmental review.” When the Clinton administration refused to listen, the workers went to court, with the Guttman brothers and Barbara Finamore of the Natural Resources Defense Council as co-counsel. “Here, again, discovery revealed facts seemingly unknown to highest-level officials,” Guttman says.

In 1999, Judge Gladys Kessler held that Section 113(h) of Superfund barred standing for the plaintiffs, but proceeded to state that they had unearthed “ample evidence that the proposed recycling significantly affects the quality of the human environment.” The judge confirmed that “no national standard exists” for the core recycling work. The result, she explained, “Is no oversight by any federal regulatory agencies.” The judge termed “startling and worrisome” the absence of opportunity for “public scrutiny or input on a matter of such grave importance.” DOE Secretary Bill Richardson declared a moratorium on the recycling.

Guttman and colleagues began to use whistleblower law, for fraud against the military, but also violation of natural resource regulations, recovering hundreds of millions for the U.S. government from oil companies who cheated on royalty obligations. In addition, the Oak Ridge nuclear waste recycling case led to the use of whistleblower law to protect against environmental harm. “And I was the whistleblower,” Guttman adds. Following the DOE recycling moratorium, the Nuclear Regulatory Commission proceeded with rulemaking to permit recycling. “In October 1999, I went to testify at the NRC’s public hearing. I was shocked to discover from the draft rules made available that the NRC had turned over rule drafting to SAIC, one of the very DOE recycling contractors that, as Judge Kessler had found, had already made a mess of it.”

Through his work on contracting, Guttman knew conflict-of-interest rules required SAIC to disclose its relevant interests. “I assumed SAIC had done so and that NRC had cynically hired the contractors without regard to conflicts. When I began to express my disgust in testimony, I was stunned to learn that NRC staff had no clue of the contractor’s further interests or Judge Kessler’s decision.” Much to his surprise, in December 1999, NRC terminated the contract.

Then the Department of Justice brought a False Claims Act case against SAIC for failure to disclose its conflicts. “In court I testified as a government witness, a first and humbling experience.” The jury found SAIC had made dozens of false statements to the NRC. Following a 2010 ruling on SAIC’s appeal, the case was settled with contractor payment to the government. In its 2016 decision in Universal Health Services, Inc. v. Escobar, the Supreme Court confirmed the SAIC case’s core principle: government contractors can commit fraud under the False Claims Act by failing to disclose
conflicts of interest.

As Government Executive wrote, Guttman “helped set the parameters” for debate over contractor use. In a 1983 decision, the Fifth Circuit had cited The Shadow Government for the proposition that while EPA may use contractors, “an agency may not delegate its public duties to private entities,” particularly if there may be a conflict of interest. Following the 1989 Pryor hearings, the White House reviewed and altered its policy on what work can be done by contractors, to reserve to agency personnel “inherently governmental” functions and to require conflict-of-interest disclosures. EPA also undertook to revise its contractor conflict rules. “However, the fundamental problem remains,” Guttman says today. “Despite law and policy, because of continued caps on Civil Service hiring, contractors not subject to ethics, pay, and open information rules that apply to agency officials continue to do much basic work, including environmental work, too often beyond official oversight capacity and public view.”

Reprinted by permission from The Environmental Forum®, March/April 2017