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| Dear Friend,
Have you ever known someone who rides things right up to the line?
When’s it a violation of the law?
For example, when is a payment or a lease or some service a kickback?
Depending on how you look at it, it's when and administrative agency says it is (if you view it from the frame of spending hundreds of thousands of dollars on defense costs) and certainly when a judge says it is. That’s the case, for all practical purposes even if the statute or the regs “say” it’s not. Sorry for the tough love.
Take, for example, a current news story outside of healthcare, from securities law in this case.
The crypto platform, Coinbase, revealed last week that the SEC informed it that it would sue if the company carried through with the launch of a new crypto lending platform. The SEC issued a subpoena for information from the company.
Wait, how can arranging a platform for loans (the company is proposing to maintain loan accounts for users who will then lend out, and borrow, crypto currency from one another) be a security?
The answer, for practical purposes, is that if the SEC says it’s a security and sues, then it will be one for Coinbase, that is, unless it spends hundreds of thousands of dollars or more to defend its position and wins.
But how deep are your pockets?
The story highlights what’s wrong with a regulatory state, but we’re not going to fix that this week, are we? But what we can fix underscores how important it is to make doubly, even triply, sure what you’re doing, or better yet, what you’re planning to do, stands a highly likely chance of passing regulatory muster. |
| | | 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.] |
| | Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript:
Let’s talk about ownership. As in well, you think you own your medical group. You have the share certificate to prove it. But how sure are you really, that you own it?
I was recently reading an article in The Financial Times about British schools which had expanded to sell their influence in China. These British schools went about aligning themselves with Chinese companies which would legally own the school campus in China, then pay a royalty fee to the British school. In turn the school would then supply professors and the technical know-how (the knowledge to teach in the style they teach, materials and so on).
This was a way to comply with Chinese government requirements for the British to do business indirectly in China. They were apparently expanding the great market for Western education – especially education that was bilingual (both British English and Chinese).
But then China began to change its mind. They began to pull back on the number of students they were allowing to be registered in the schools and putting more pressure on the companies that run them to not play ball with the British universities.
So here the British universities thought they owned (or had invested in and were going to profit from) a method of business, on someone else’s turf.
However, the rules changed without a vote.
How different is that from an anesthesia group or even a cardiac surgery group that has built its own institute, let’s say in an office building, next to the campus of a hospital? An institute that is even supported in part financially by the hospital via an exclusive contract.
Do you really own that business?
Or has your business become so focused on that one facility and relationship that were the hospital, or even hospital-system, to pull the plug, your business would be mooted?
This issue is going to become stronger and more important as time passes.
Certainly, protecting your ability to do business at a facility is important. Query if by putting all your eggs in that basket, you’ve given so much power to someone else that they can decide matters that are normally your decision. That power that can ultimately pull the plug on your business.
Contracts that give you exclusivity are not always good if they’re your only contract.
Relationships that are exclusive sound great if they’re healthy. But if you don’t have any say in whether they relationship is going to become unhealthy (you’re our favorite flavor, until you’re not) then it’s another situation entirely.
This is not a hospital-based physician issue alone.Unfortunately, I’ve seen this issue come up in surgical groups of various stripes, who’ve had close monetary relationships with hospitals for decades, only to have the plug pulled because they weren’t the flavor of the month. |
| | How to Deploy the Secret Sauce of Opportunistic Strategy
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•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 - "Covid Ate My Homework" Won't Keep You Out of Jail - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
“My dog ate my homework,” said Billy.
Sobbing, Sally said, “my grandma died, so I didn’t have time to write the paper.”
Maybe those excuses worked in fourth grade, and maybe Samirkumar J. Shah, M.D. should have tried them, but the one he went with, “I can’t show up at my sentencing for health care fraud because my doctor says I need to rest at home following a Covid vaccine reaction,” didn’t impress United States District Judge David S. Cercone.
The Background
Dr. Shah, a cardiologist, was convicted in June 2019 of two counts of health care fraud resulting from his submission of fraudulent claims to private insurance plans covered by Highmark Blue Cross Blue Shield and UPMC Health Plan, to managed Medicaid plans issued by Gateway Health Plan, as well as to Medicare, all in connection with outpatient external counterpulsation, also referred to as “ECP” treatment.
Payors cover ECP only for patients who suffer from disabling angina, and only when a physician supervises the treatment.
Yet Shah advertised ECP as the fountain of youth and claimed that it made patients younger and smarter. He offered the treatment for a range of ailments other than disabling angina, including, among others, obesity, high blood pressure, low blood pressure, and erectile dysfunction.
To support false claims, he instructed employees at his more than 18 locations to indicate on billing sheets that every patient had disabling angina. In many cases, neither he nor any other physician was present at the location when treatments were performed.
As if billing for medically unnecessary and unsupervised ECP treatments weren’t enough, Shah also double-billed insurers by billing for both a “bundled” ECP code, which accounted for and included payment for various incidental procedures, and then separately submitting claims for the same included procedures.
In addition, Shah routinely submitted fabricated patient files and made false statements concerning his practice, his patient population, his record-keeping, and his compliance with applicable coverage guidelines.
Time, or Not, to Pay the Piper
Between his June 2019 conviction and July 2021, Shah remained free, awaiting sentencing. Yes, the wheels of justice turn slowly, but eventually even that bus reaches its destination.
Facing a July 14, 2021, sentencing, Shah’s attorney made a motion that same day to continue the inevitable based on the claim that Shah’s doctor told him he needed six weeks bed rest due to an allergic reaction to the Covid vaccine.
Likely to no one’s surprise, the motion was denied and when Shah still didn’t show up for sentencing, the judge issued an order for his arrest. He remained in jail until August 5, 2021, when he was sentenced to 78 months of imprisonment followed by three years of supervised release as well as ordered to pay restitution of over $1.2 million to the victimized payors, in addition to forfeiting another $500,000.
Some Lessons
In addition to the serious slice of schadenfreude sprouting from the Shah story, you’d be well advised to note that most physicians engaging in billing fraud do so on a smaller scale than the industrial-sized health care fraud overseen by Shah. However, it’s just as illegal.
Billing for unnecessary tests and procedures, even on a small scale, is particularly egregious because of the risk inherent to the victim patients, let alone the financial fraud on payors.
Shah went down because of what appears to be an initial investigation by the Pennsylvania Attorney General’s Medicaid Fraud Control Unit. Often, physicians engaging in such scams are tripped up by someone within their office or at an outsourced billing and collection service who becomes a whistleblower, whether in the context of a false claims act lawsuit which then triggers a criminal investigation, or as an anonymous “tipster.”
If you can’t do the time, don’t do the crime.
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| | | | | Listen to the podcast here, or just keep reading for the transcript.
There’s a management saying that what’s measured improves. As a result, managers love to measure things. But measuring does not always indicate value.
Take for example a family of three with total income of $200,000 a year. The parents have another child. Should grandma call the parents to commiserate because the family’s per capita income just dropped from $66,666 to $50,000?
So clearly, you’ve got to be measuring the right thing.
The family comedy described above has a medical group analogy. Groups must distinguish between measuring things which are efficient and measuring things which create a much improved or larger experience for the recipient.
What if you were running a restaurant instead of a medical group. Let’s say you decide to measure and reward on the basis of the time a waiter or waitress takes to picks up food in the kitchen and deliver it to the table. Soon, waiters would be jogging through the joint, tossing plates onto the tables. Slopping the food onto the table with a smirk would still be 99th percentile performance, but the total customer experience would be at rock bottom.
So clearly, some things that measurement says are now “improved” aren’t anything of the sort.
Now back to running a medical group. Take a look at your group’s compensation plan. If you simply measure units produced by your group members–that is, you pay by units only–then you are encouraging fast delivery, not courteous service: tossing the plates, so to speak. On the other hand, if you’ve adopted a fixed compensation system, $X per month as salary, you’ve taken away the incentive to work harder, and you’ve ignored the notion of an incentive for better performance. Of course, that still begs the question, what is better performance?
Correctly formulated, a group compensation plan is not just about encouraging efficiency, it’s about encouraging effective performance in a broad sense. Some of that performance is capable of meaningful objective measurement, but a significant portion is not — but that portion can’t be ignored, it still has to be considered and group members must be cognizant of its impact on their overall compensation. |
| | | 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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