Behavioral healthcare has generally lagged behind advances in medical healthcare including business models for reimbursement of care.
As behavioral health providers migrate into the 21st Century world of the Affordable Care Act, they are beginning to meet the more sophisticated care from practice groups such as providers of medical directors and, more recently, providers of urinalysis and laboratory services.
This becomes that much more complicated as treatment providers have been offered opportunities to invest in larger platforms with an expectation of a return on that investment.
But as with any investment, there is always risk.
The question then becomes, who is responsible for communicating that risk accurately to the would-be investor?
This appears to be a timely question as the parties in the pending U.S. Supreme Court case of Omnicare Inc. et al. v. Laborers District Council Construction Industry Pension Fund et al. make their arguments on appeal from the Sixth Circuit Court¹s opinion found at 719 F.3d 498 (6th Cir.2013).
In this case, Defendant Omnicare – the nation’s largest provider of pharmaceutical care services for the elderly and other residents of long-term care facilities in the United States and Canada – have been sued by investors who purchased Omnicare securities. The underlying suit claims Omnicare and four former top executives failed to tell investors about kickback arrangements through which Omnicare received rebates from drug manufacturers, in exchange for promoting certain medications. Omnicare also is alleged to have misled shareholders about its accounting practices, contracts with drugmakers, alleged promotion of off-label uses for Johnson & Johnson’s antipsychotic drug Risperdal and a drug-recycling program, according to the suit.
Omnicare told the U.S. Supreme Court in a brief filed Monday that its executives cannot be held responsible for opinions expressed to investors that later turned out to be false, as they had no obligation to disclose.
While the case is actually more narrow in scope (pertaining to strict liability), the overall concept is what is at issue: Are the courts going to shift more and more of the responsibility to those in the otherwise complicated healthcare field to fully explain how the business operates so that the would-be investors can be ³fully informed?² What will a ³material omission of fact² look like?
With the various consumer-driven changes to information required of any stock or investment offering since the Great Recession, and with healthcare continuing to be one of the largest aspects of our economy, don¹t be surprised to see Congress (or the courts) continue down the path of assigning responsibility to the offeror to make full disclosures.