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IN-HOUSE COUNSEL: Terry ‘Teska’ J. Moreau, St. Luke’s Episcopal Health System, Houston, Texas. TITLE: Senior vice president and general counsel AGE: 46 CORPORATE WORK: In the past four years alone, Moreau has set up nearly 20 different corporate entities and maintained their corporate records. She works on legal matters involving the medical staff as well, including representing the hospital when doctors are involved in disciplinary hearings. “That is something that I get directly involved in,” she says. She also gives legal advice to St. Luke’s senior business executives. For instance, she would review any business arrangement they’re considering entering into with a competitor to make sure it doesn’t raise antitrust concerns. LANDMARK: In a case that seems headed to the U.S. Supreme Court, St. Luke’s is the defendant in Ex rel Joyce Riley v. St. Luke’s Episcopal Hospital, which could redefine the False Claims Act, the federal whistleblower law. At issue is whether it is constitutional for whistleblowers to sue on behalf of the government for alleged fraud. Joyce Riley, a former hospital nurse, sued St. Luke’s under the False Claims Act, charging it with defrauding Medicare by giving patients unnecessary medical treatment. In November 1999, a three-judge panel of the 5th U.S. Circuit Court of Appeals found that the provision allowing whistleblowers to pursue civil actions on behalf of the government after uncovering fraud was unconstitutional. In reaction to a split in the circuits on the issue, in September an en banc panel of the 5th Circuit heard the case. If St. Luke’s prevails in the case on constitutionality grounds, the case could have a profound effect; the federal government has relied on the whistleblower law to recover hundreds of millions of dollars from companies accused of defrauding the government. Concerning the specific allegations of fraud, Moreau says, “We strongly deny the allegations. The case was filed in 1996 [and] we’ve prevailed at every step along the way. At this juncture, we are willing to see the case all the way through. That might include an appeal all the way to the Supreme Court.” Moreau said that she oversees the work of outside counsel, Houston’s Vinson & Elkins, approving all of their actions, and she provides St. Luke’s senior executives and board of directors with updates on the case. BIG WIN: A 1997 Texas Supreme Court verdict in one of St. Luke’s lawsuits was “considered a major victory for all hospitals,” Moreau claims. St. Luke’s Episcopal Hospital v. Agbor was brought by the parents of a baby whose arm was permanently damaged during delivery at the hospital. The doctor involved settled with the plaintiffs for a large amount. But the parents argued that the hospital was also liable for negligence in credentialing the doctor. “We successfully argued before the [Texas] Supreme Court that you cannot hold a hospital liable without also having a finding of malice on the part of the hospital,” Moreau says. “I was involved in oversight and strategizing and decision-making with the risk manager as to how far we were going to take that case,” which started in 1992. ACQUISITION: In 1999, St. Luke’s and the hospital next door to it in the Texas Medical Center, Methodist Health Care System, jointly purchased a company that provides the business-management services for a very large physician group and the building that houses the doctors and all of the administrative services. The $150 million deal was one of the largest that St. Luke’s has been involved in. Moreau says it was also the most complicated project she has worked on. “It was months and months of negotiations,” she says. She and the general counsel at Methodist Health Care System each hired outside transaction counsel to work on the deal. Moreau explains that during the negotiations, she “assisted in drafting documents [and] acted as liaison between the business people at St. Luke’s [and] the outside team of lawyers. “I oversaw their work and helped coordinate along with my counterpart next door.” OUTSIDE COUNSEL: The acquisition of the physician-management services firm marked the first time that Moreau went outside of Houston to hire legal counsel. She chose the Los Angeles office of Chicago’s McDermott, Will & Emery, relying on Jeff Lemkin, who heads the health law section in the firm’s Los Angeles office, for much of the work. The other outside law firms she uses all are either Houston-based or have offices there. Mayor Day Caldwell & Keeton handles St. Luke’s medical malpractice litigation and represented it in the Agbor case. Fulbright & Jaworski deals with regulatory matters, while Vinson & Elkins, in addition to handling the Riley False Claims Act case, also works on corporate matters. Its attorneys are helping with a year-long effort to make sure that all the records of St. Luke’s numerous corporate entities are up to date. Regarding choosing outside counsel, she says, “I would pick a firm based on if we’ve worked with them before on a particular kind of case.” Other factors include who is representing the plaintiffs and where the case is located. PET PEEVE: “The difficulty litigators have in seeing and appreciating the importance of the big picture to the client,” says Moreau. “Fighting the battle to the bloody end in every issue may not be in the best interest for St. Luke’s.” “They have a very difficult time in pulling back and understanding why the client may not want to pursue litigation or stay in fight mode or to win. Winning isn’t everything.” STARK II: One item on Moreau’s agenda are the new so-called Stark II regulations. This past January, the federal government finally published the regulations for the 1995 law, which prohibits a doctor from ordering health services for a Medicare patient from a business with which the doctor has a financial relationship. Law firms that specialize in health care are working on summaries of the regulations to send to their clients. Moreau says she will look at the summaries so she can compare the new regulations “with our current arrangements with physicians and any proposed arrangements to make sure we’re in compliance.” ROUTE TO THE TOP:Moreau graduated from the University of Louisiana, Lafayette, in 1975 with a degree in microbiology. She worked in hospital labs in Louisiana and Texas for several years before starting law school at South Texas College of Law in 1980. She continued working part time while attending school and graduated in 1984. Moreau decided she wanted to be a hospital attorney while still in law school. “I had worked in health care and believed in its mission,” she explains. Her first job after graduating was as a staff attorney for the Veterans Administration regional office in Houston. In 1987, she became a senior attorney at the University of Texas Medical Branch in Galveston, Texas. “That was my nightmare commuting experience. I drove a hundred miles a day for two years,” she says. St. Luke’s hired her to be assistant general counsel in 1990. She was named acting general counsel two years later and was given the position permanently in 1993. FAMILY: Moreau is single. LAST BOOK READ: “Built to Last,” by James C. Collins and Jerry I. Porras.

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