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| Dear Friend,
UnitedHealth is pulling cases from hospitals.
In case you weren't listening, on June 15th, UnitedHealth told you where they were going to push cases, and it wasn't to hospitals.
That's the day on which the parent company, UnitedHealth Group, announced that their goal is to ensure that more than 55% of outpatient surgeries and radiology services are delivered at a high-quality, cost-efficient site of care. If you haven't already figured it out, “cost-efficient” is a euphemism for not at a hospital but at an ASC or freestanding imaging center. Feel free to read the full report which is filled with gobbledygook about sustainability and stakeholders and other woke BS designed to get people to lay off the $22.4 billion in profit they made in 2020.
Laugh about it or cry about it, the bottom line is the same: they are cutting costs by moving all cases that can be moved out of the hospital out of the hospital. Where does that leave you? |
| | | Business Life in the Time of Coronavirus Mini-Series
The coronavirus crisis caused a short term economic crisis for many medical groups. Our mini-series shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
[If you haven't already seen them, follow this link to watch our entire series.] |
| | Tuesday – Thinking Your Way Out of the Compensation System Box – Success in Motion Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript:
Growing up, one of our neighbors was an airline pilot. I recall several airline pilot strikes and a resulting resetting of pilot salaries, with raises for experienced pilots such as our neighbor and a new, much lower tier applicable to all new hires.
How did they get away with it? By that, I mean the bifurcated compensation system. It was because there were only a handful of airlines and they were all union shops. If you wanted a job as a big plane pilot, those were the rules.
I read this week about the one-upmanship among a handful of large law firms in connection with their almost yearly battle to raise their new associates', that is their employed attorneys', compensation. In that context, if they raise the pay to new hires, they also have to raise the pay to their other employed partnership track attorneys, well, at least until they fire them as not being “partner material”. But, as the article pointed out, the firms might not be able to afford those salaries without reducing partner compensation, a significant problem.
You can see the differences in these salary structures.
In the airline pilot situation, a relatively small ecosystem contained and constrained by union rules, it was possible to push the senior pilots’ compensation up, insulating them from the much lower pay scale imposed on all new hires.
In the law firm example, a situation shared by many medical groups, the pressures are opposite: If you increase compensation to new hires in order to attract them, it might exceed the compensation paid to current employees who, unlike the airline pilots, will demand being “topped up” or will leave for positions elsewhere. And, all of that puts significant pressure on partner compensation.
Admittedly, it's a difficult situation and there's no single magic bullet. However, there are various monetary and non-monetary strategies, depending upon your particular situation. It might be trite to use the phrase "thinking outside the box", but it’s better than being stuck in a box.
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| | How to Deploy the Secret Sauce of Opportunistic Strategy
Webinar On Demand
They say that COVID-19 has changed the world, creating the "new normal." Many of your colleagues and many hospital administrators are running scared.
Others, leaders like you, know that crisis means opportunity.
Let me provide you with the strategic tools and insights that you need in order to seize opportunities, whether they’re in the context of your current business relationships, the expansion of your business activities, or the creation of new ventures.
You will learn:
•Defense as a defective default: It’s necessary, but not sufficient.
•Exploiting weakness: Drop the guilt and identify opportunity.
•Flat line negotiation is fatal: Understand its myths and limitations.
•Negotiation reality: Learn to identify and deploy on multiple planes to affect the outcome.
•Maneuver: Harness the power of maneuver, both in overall strategy and in specific negotiation strategy.
Others see a crisis and freeze in fear. Learn how to see the opportunities and obtain the tools to increase your odds of obtaining them.
The price to attend is $479. The cost of not attending is astronomical. |
| | | Wednesday – Was the Cure Worse Than the Disease? Surprise Medical Billing and U.S. Anesthesia Partners v. UnitedHealthcare – Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Frédéric Bastiat, the 19th Century French political economist, saw it clearly in 1850. Today's politicians and so-called patient advocates, not so much.
In his famous essay, That Which is Seen, and That Which is Not Seen, Bastiat explained that governments legislate to correct a problem (and then bask in the glory of having taken action) but never truly consider what problems they create when they enact the legislation to correct the problem. In other words, politicians act based on what is seen (the initial “problem” and the easily seen “solution”) but do not pause to consider the potential damage that their actions will later cause, that which is not seen.
Over the past several years, so-called patients’ rights protestors, and, if anyone were looking, insurance companies, advocated against the claimed evils of “surprise medical billing” the situation in which, in its purest form, involves a patient's receipt of a full UCR bill from out-of-network hospital-based physicians in connection with surgery by an in-network surgeon at an in-network hospital.
The “solution”, which varies slightly state by state and is also the subject of federal legislation, is to impose a requirement on the out-of-network physicians to accept a purported “fair fee” arrived at by reference to average contracted rates.
But, of course, the devil is in the details.
As I pointed out years ago when legislation of this ilk first surfaced in California, there's nothing inherently fair in this notion of paying a purported “fair fee”. If there were, insurers would never have been in favor of it.
As I pointed out at the time, there are multiple reasons why a group might be out-of-network such as the fact that the carrier has narrowed their network and refuses to contract with them, or the rates that the carrier offers are so much lower than prior rates, that they are completely unacceptable. Additionally, as I've seen myself, in connection with contract renewal negotiations, carriers threaten groups to take significant cuts or they will be thrown out-of-network and forced them to accept “fair rates” which are even lower. Carrying though with that threat and generally narrowing networks seeds the data that will later be used to determine “fair rates”. In other words, if a carrier tosses every group with high rates out of its network, the geographic average rate becomes low, with a spiraling tail effect.
In fact, as I argued years ago and as I argue now, the entire point of surprise medical billing legislation, from the insurers’ point of view, likely unseen (but who knows) by the political class, was to force more physicians out-of-network, the very “wrong” that the legislation claims to cure.
Of course, life is even more complicated than this, as two lawsuits filed last week by U.S. Anesthesia Partners (“USAP”) against UnitedHealthcare (“UHC”) demonstrate.
Not only did UHC demand significant cuts from USAP in connection with contract renewal, UHC, through its various operating units, is itself in the anesthesia business.
USAP claims that UHC is squeezing them from all angles, “like a boa constrictor”. It claims that UHC is engaging in a group boycott and that it’s using unlawful tactics and pressure campaigns, even “bribing” surgeons to steer patients away USAP, which is now out-of-network in Texas and Colorado.
As might be expected, UHC, in statements reported by the New York Times, maintains that the suits are “just the latest example of the group’s efforts to pressure us into agreeing to its rate demands and to distract from the real reason that it no longer participates in our network” and that private equity backed groups “expect to be paid double or even triple the median rate we pay other physicians providing the same services.”
Interestingly, both USAP and UHC appear to be leveling antitrust type claims against one another. UHC’s statements include allegations that USAP is using its market power to demand outsized reimbursement. And USAP appears to be alleging that UHC’s horizontal structure (an insurer, a facility owner, and a physician practice owner), allows it to exert improper power over rates paid. Last but by far not least, both USAP and UHC might be courting potential danger. The Biden administration has signaled a much tougher stance in connection with both horizontal (same market consolidation, such as USAP’s market growth in anesthesia) and vertical (different market consolidation, such as UHC’s growth in health coverage, facilities, and physician services) antitrust enforcement. Their highly public spat is likely to draw enforcement attention. And, either or both might entertain “dropping the dime” on the other, only to have the call ring back on themselves. |
| | Thursday – Surgeon and Controlled Companies Pay $4.5 Million Settlement Months After Medtronic Pays $9.21 Million Tip (Settlement) For Meals at the Surgeon’s Restaurant– Podcast
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| Listen to the podcast here, or just keep reading for the transcript.
Last week, the U.S. Department of Justice announced that South Dakota neurosurgeon, Wilson Asfora, M.D., and two medical device distributorships that he owns, Medical Designs LLC, and Sicage LLC, agreed to pay $4.4 million to resolve False Claims Act allegations relating to illegal payments to Asfora from Medtronic USA, Inc. and others to induce the use of medical devices in violation of the Anti-Kickback Statute and other allegations.
According to the U.S. Government’s allegations, Medtronic agreed to Dr. Asfora’s requests to pay for over 100 social events, including scores of expensive meals, at Carnaval Brazilian Grill, a restaurant Medtronic knew Dr. Asfora owned. The Government alleged that the sponsored events were social gatherings for which Dr. Asfora selected and invited his social acquaintances, business partners, favored colleagues, and potential and existing referral sources, with Medtronic picking up the tab.
Why? Well, the story as told by the Government is a familiar one: They allege that the events were payments to benefit Dr. Asfora and induce him to use Medtronic’s SynchroMed II intrathecal infusion pumps.
Whether or not Medtronic liked the food is anyone's guess, but in October 2020, they paid the U.S. Government $8.1 million to resolve Antikickback Statute allegations that the “social events” were kickbacks to Dr. Asfora. Medtronic paid an additional $1.11 million to resolve allegations that it violated the Open Payments Program by failing to accurately report payments it made to the neurosurgeon.
And now, the Government’s skewered Dr. Asfora, extracting $4.4 million to resolve False Claims Act allegations relating to illegal payments to him from Medtronic USA, Inc. and others. In addition, Dr. Asfora’s two companies, Medical Designs and Sicage, agreed to pay $100,000 in penalties to settle allegations that they violated the Open Payments Program by failing to report to the Centers for Medicare & Medicaid Services (CMS) Asfora’s ownership interests and payments made to Asfora.
But wait, there’s more: In addition to the settlement and penalties, Dr. Asfora, Medical Designs, and Sicage have each agreed to be excluded from participation in federal healthcare programs for a period of six years.
As is always the case in connection with settlements mentioned above in this post, the claims resolved are allegations only, and there has been no determination of liability.
As you know, the federal Anti-Kickback Statute prohibits directly or indirectly offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, TRICARE, and other federal healthcare programs.
CMS’ Open Payments Program requires that device manufacturers such as Medtronic and distributors such as Medical Designs, and Sicage report their financial relationships with healthcare providers.
Over the years, I’ve seen “disguised” AKS violations in all shapes and sizes, from demands for free services and free personnel to the payment of “rent” for storage cabinets to payments for speeches that lasted a few moments, if that.
Are others so “disguised” that they haven’t been discovered? I’m sure that’s the case.
But when they are discovered, there’s hell to pay: violation of the AKS is a crime. People are in jail, right now, for violating it. In addition, violation of the AKS serves as the grounds for civil action under the False Claims Act, including those cases brought by whistleblowers, to recoup not only the amount of the related, tainted claims for federal health care program reimbursement but also treble damages plus five-figure per claim penalties. |
| | | Calibrate Your Compass
Read our exclusive RedPaper to guide you through this evolving situation.
The coronavirus crisis caused a short-term economic crisis for many medical groups. Our RedPaper shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
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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.
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| 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 Free.
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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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