VA says probe continues regarding Minnesota clinics

By Mike Kaszuba

The U.S. Department of Veterans Affairs (VA) said that an investigation is continuing into Sterling Medical Associates Inc., a company that has already agreed to pay $1.85 million to resolve allegations that it filed false claims after it failed to schedule timely appointments for veterans at two Minnesota clinics.

The VA made the assertion in denying the appeal of a request for documents made by Public Record Media (PRM), a non-profit based in Saint Paul.

VA: Investigation remains ongoing

In a September 21st letter to PRM, the federal agency stated that “the investigation from which you requested records remains an open investigation” and that providing documents “could reasonably be expected to interfere with ongoing proceedings by revealing the scope of the investigation.”  The VA’s Office of Inspector General’s Office of Investigations, the letter added, “will close the investigation when they determine that law enforcement proceedings are complete.”

In its appeal, PRM stated that Sterling Medical Associates had agreed to the monetary settlement with the U.S. Department of Justice (DOJ) in March and that the action appeared to have effectively closed the case.

Though the Cincinnati-based company did not acknowledge liability as part of the settlement, the DOJ alleged that between July 2013 and August 2014 the company did not schedule patient appointments at the Hibbing, MN clinic in compliance with requirements and “changed veterans’ requested appointment dates to make appointment wait times appear shorter.”

Sterling had contract to operate VA clinics

The VA awarded Sterling Medical Associates a contract to operate its clinics in Hibbing and Ely, MN in March 2013. The DOJ said the contract was to follow VA requirements that routine appointments be scheduled within 14 calendar days of a veteran’s requested appointment date.

The DOJ added that the “claims resolved by the settlement are allegations only, and there has been no determination of liability.” In the settlement agreement, the DOJ also released the company “from any civil or administrative monetary claim”, including “the common law theories of breach of contract, payment by mistake, unjust enrichment, and fraud.”

The Sterling Medical Associates contract with the VA clinics had drawn earlier media scrutiny.

In 2014, the Minneapolis Star Tribune quoted company employees as saying they were ordered to falsify records.  The paper also reported that internal e-mails related to record keeping suggested that Sterling Medical Associates managers were concerned about failing to meet the 14-day appointment window and urged employees to alter appointment dates after the fact.

The newspaper added that the Minneapolis VA, which operated the Hibbing clinic, maintained at the time that it had a strong relationship with the company and that “there is no evidence of inappropriate scheduling practices at these clinics.”

Ongoing investigation revealed through PRM FOIA appeal

PRM had initially sought records in July regarding the case from both the VA and the DOJ. While the DOJ produced a nine-page settlement agreement with Sterling Medical Associates, the VA said in August that its records were being withheld under an exemption that allowed it to do so if releasing them might interfere with law enforcement proceedings.  The VA’s latest letter provided more details as to the federal agency’s reasoning.

In appealing the VA’s initial denial to produce documents in the case, PRM contended that “it appears unlikely that Sterling would have settled its civil claims if it reasonably expected to litigate other, criminal claims in the immediate future.  Thus, it seems that – in all likelihood – DOJ’s investigation of Sterling Medical Associates has terminated.”

But the VA, in denying the appeal, said the case against Sterling Medical Associates was not closed – and that the documents being requested were not public.

In its latest letter, the VA said that as long as law enforcement proceedings were continuing the agency was not obligated to release documents concerning the case.  “The courts have interpreted the term ‘law enforcement proceedings’ [to] include not only criminal actions, but civil actions and regulatory proceedings,” the VA stated.

“Agencies may protect records under [a federal exemption], if the records fall within the legal guidelines set by the courts,” the VA added. “Specifically, the courts have required agencies to determine, in order to claim this exemption, that disclosure of the records may reasonably cause an articulable harm to law enforcement proceedings.”