Opinion ID: 72598
Heading Depth: 4
Heading Rank: 2

Heading: Kelly, Suba & Managed Risk

Text: Kelly was a certified public accountant and chief financial officer and vice-president of Healthmaster, second in command to Garrison. Kelly was also the trustee for Healthmaster's self-insured worker's compensation trust fund. In 1990, upon Kelly's recommendation, Garrison hired Suba as Healthmaster's insurance risk manager to reduce the worker's compensation claims and injuries of Healthmaster's three thousand employees. That same year, Kelly and Suba formed their own company, Managed Risk, ostensibly to provide risk management for self-insured worker's compensation and health insurance funds. Suba 4 The Medicare Act provides a controlling standard against which all coverage determinations must be measured under Part A: Notwithstanding any other provision of this sub-chapter, no payment may be made ... for any expenses incurred for items or services which ... are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. 42 U.S.C. § 1395y(a)(1)(A). 5 An organization is related to the healthcare provider through common ownership which exists if an individual or individuals possess significant ownership or equity in the provider and the institution or organization serving the provider. 42 C.F.R. § 413.17(b)(2). In general, Medicare will reimburse a home health care agency for only the cost of the supplies or services received from the related company. See 42 C.F.R. § 413.17(c); United States v. Calhoon, 97 F.3d 518, 525 (11th Cir.1996), cert. denied --- U.S. ----, 118 S.Ct. 44, --- L.Ed.2d ---- (1997)(involving the reimbursement by Medicare of royalty fees paid to a hospital's related company). owned twenty-four percent of Managed Risk and served as its president. Mrs. Kelly owned twenty-four percent. Majority ownership (fifty-two percent) was owned by two trusts controlled by Garrison and Kelly for the benefit of the Garrison children. Managed Risk operated out of Healthmaster's Augusta corporate offices yet it maintained a mailing (post office box) address in Atlanta. Business cards for Managed Risk listed an Atlanta answering service telephone number as its business number. Healthmaster was Managed Risk's primary client.