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Compound Drugs: Miracle Cure Or Kickback Lure?
It’s the middle ground between light and shadow, between medical science and stupidity, and it lies between the pit of man’s desires and the summit of his bank account. This is the dimension of disintegration. It’s an area which we call the Indictment Zone.
Gary Robert Lee, Krishna Balarma Parchuri, and Jerry May Keepers. Christopher R. Parks. Three doctors and a former lawyer. The stuff of dreams compounded, so it is said, with a heavy dose of dreams of stuff.
Compounding pharmaceuticals, specific drugs for specific patients, offers tremendous benefit. The problems arise when the benefit is for the prescribing physician. Then, as Drs. Lee, Parchuri, and Keepers, and Mr. Parks, might attest, that is, if they elect to testify in their own defense at trial, we’re dealing with analyses under the federal Anti-Kickback Statute (AKS) and state law counterparts.
In a case currently winding its way toward trial in the U.S. District Court for the Northern District of Oklahoma, Lee, et al., are alleged to have engaged in a host of criminal acts centering around a compounded prescription scheme.
Lee and Keepers are charged with conspiracy to commit health care fraud. Keepers and Parchuri are also charged with soliciting and receiving illegal bribes and kickback payments. Additionally, Parchuri is charged with obstructing the criminal investigation into the health care offenses.
According to the indictment, beginning in 2012, Parks and Lee, who controlled several compounding pharmacies, conspired to pay kickbacks to physicians to induce them to write expensive compounding prescriptions to be filled at the controlled pharmacies.
As a part of the conspiracy, the government alleges that the kickback-receiving physicians were provided with pre-printed prescription pads that listed compounding formula choices; physicians checked a box and then faxed the form directly to the associated pharmacy – no prescription was handed to the patient for him or her to take to a pharmacy of choice.
Claims for payment for the compounded drugs were submitted to federal health care programs as well as to private payors, and the proceeds allegedly split among the defendants using a variety of methods.
The government alleges that Parchuri received up to $50,000 a month in exchange for writing those prescriptions, and that over time, Keepers solicited and received more than $860,000 in kickbacks and bribes.
The indictment claims that kickbacks were disguised through sham agreements, including purported pharmacy and university study “medical directorships” and “consulting physician” agreements, as well as via intermediary limited liability companies.
As always, note that allegations and indictments are charges only and not convictions. The defendants are innocent until proven guilty.
However, defending against charges such as these is mindbogglingly expensive. At least one of the physicians defendants had replacement counsel appointed for him by the court because he could no longer afford to pay for his own defense.
If convicted, conspiracy to violate the federal anti-kickback stature carries a possible maximum sentence of five years in prison and a $250,000 fine. In addition, violation of the anti-kickback statute itself carries up to 10 years in prison and a $100,000 possible fine. A conviction of health care fraud without injury or death also carries a possible maximum of 10 years in prison, but if resulting in injury or death, the maximum penalty climbs to 20 years or life in prison, respectively.
Compounded drugs are valid treatment. Prescribing them is legal. However, accepting (or paying) kickbacks to prescribe them is a crime.
Seems simple, but each year, no, each week, we’re reminded that “simple” isn’t much of a deterrent to stupid.
There are many legitimate ways for physicians to increase their practice income. They include, depending on state law, investments in compounding pharmacies and the direct dispensing of pharmaceuticals. But any deal must be structured in compliance with the anti-kickback statue. And then, of course, also in compliance with other applicable laws, from Stark to state law considerations.
Just because some other party to the deal tells you that a deal’s been vetted by their lawyers and is “legal,” don’t bet on it. Vet it through your own counsel and assess your own risk. As in carpentry, measure (assess) twice, cut (do the deal) once. Or not do the deal – you get the idea.
After all, that other party won’t be paying your fine or doing your time.
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| | Wisdom. Applied. 134 - Surprise (Medical Bills)! Language, Framing and Your Bank AccountBoth state and national politicians certainly know what side the bread is buttered on, and who’s doing the buttering. There are far more patients than physicians, thus the rush to fix the problem they’ve defined as “surprise medical bills.”
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| | | It’s a quiet morning. I’m standing here in the kitchen sipping a cup of coffee and looking out the window as I dictate this.
There’s a squirrel perched on the curb. It's apparently deep into making the decision as to whether it will make it across without being hit by a car or eaten by a hawk.
So too, are our paths governed by choices.
I have a favorite way of looking at this and I’ll share it with you. Don’t tell anyone.
I call it the “two yous.”
Before making a decision consider that there is not just one of you, there are actually two of you: the present you and the future you.
All choices present in the present. They're made by your present you. However, each choice small or large that you make in the present impacts the future you.
Take, as the simplest test, a decision to be made by me… now… as to whether to have another slice of toast. It will impact my weight tomorrow. It might be worth it. It might not be. But, at least, I should consider the impact on the future Mark before shoving it into my mouth.
The nice thing about this little heuristic, the “two yous,” is that it’s short and handy and can be applied to nearly all choices, all decision-making, from the seemingly innocuous to the seemingly momentous. Each choice vibrates in a way impacting what might be or might not be an available choice in the future. And, each choice either takes you toward, or away, from your goals, whether those goals are to fit into that tuxedo or to exit the deal with a $97 million payout.
As they say, the choice is yours. Will it add or subtract from your future you?
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| | Podcast Compilation Greatest Hits - Strategy Edition 1.0
We've curated our most popular podcasts on strategy into our first compilation album.
Sit back, enjoy, and think about your future.
Listen here. |
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Come listen to Mark speak in sunny Las Vegas on June 5, 2020, at The Advanced Institute for Anesthesia Billing and Practice Management
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| | | | | | We all hear, and most of us say, that the pace of change in healthcare is quickening. That means that the pace of required decision-making is increasing, too. Unless, that is, you want to take the “default” route. That’s the one is which you let someone else make the decisions that impact you; you’re just along for the ride. Of course, playing a bit part in scripting your own future isn’t the smart route to stardom. But despite your own best intentions, perhaps it’s your medical group’s governance structure that’s holding you back. In fact, it’s very likely that the problem is systemic. The Medical Group Governance Matrix introduces a simple four-quadrant diagnostic tool to help you find out. It then shows you how to use that tool to build your better, more profitable future. Get your free copy here.
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| | | Whenever you're ready, here are 4 ways I can help you and your business:
1. Download a copy of The Success Prescription. My book, The Success Prescription provides you with a framework for thinking about your success. Download a copy of The Success Prescription here.
2. Be a guest on “Wisdom. Applied. Podcast.” Although most of my podcasts involve me addressing an important point for your success, I’m always looking for guests who’d like to be interviewed about their personal and professional achievements and the lessons learned. Email me if you’re interested in participating.
3. Book me to speak to your group or organization. I’ve spoken at dozens of medical group, healthcare organization, university-sponsored, and private events on many topics such as The Impending Death of Hospitals, the strategic use of OIG Advisory Opinions, medical group governance, and succeeding at negotiations. For more information about a custom presentation for you, drop us a line.
4. If You’re Not Yet a Client, Engage Me to Represent You. If you’re interested in increasing your profit and managing your risk of loss, email me to connect directly. |
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