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| Dear Friend,
Something old, something new, something borrowed, something blew up.
Apparently, it was a polygamous marriage made in hell.
That’s what was exposed by the U.S. Department of Justice in early November 2021 when they announced the not quite marital settlement agreement whereby multiple anesthesia providers, ambulatory surgery centers, Tenet-owned United Surgical Partners International, and a host of ASC-owner surgeons agreed to pay a combined $28 million to the government to resolve allegations that they violated the federal Anti-Kickback Statute (the “AKS”). The allegations centered on kickbacks in the form of paying and receiving payments for medications, supplies, equipment and labor, as well as free staffing.
The AKS makes it a crime to pay remuneration to induce a referral of a federal health care program patient.
Many mistakenly believe that the AKS focuses only on cash remuneration, as in “here’s $100 for the case.” They believe that it’s somehow okay for a referral-receiving physician or group to contribute toward, or pay the cost of, an “expense” relating to the referred service. This could take many forms, such as payment for the referring party’s expenses, or providing staff to work in the referring party’s office or facility.
In a classic ASC example, an anesthesia group is asked to provide personnel to help move patients from the OR to post-op in an ASC. Or, the anesthesia group is asked to contribute toward the cost of anesthesia drugs. You get the idea; not everyone does.
As to the “not everyone” who need a reminder, giving a referring physician something like a slightly used 2020 Bentley Continental GT (even in the horrific color combination of white with a linen interior) is still like shoving around $288,000 into her pocket.
The same’s true of giving that referring physician or facility some free drugs or some free equipment or some free services, whether they’re provided directly by the referral recipient or whether the referral recipient pays expenses which are actually those of the referral source.
In the case of the $28 million settlement, the government alleged that between 2005 and 2015, Ambulatory Anesthesia of Atlanta, LLC (f/k/a Ambulatory Anesthesia of Atlanta, PC) and Northside Anesthesiology Consultants, LLC made payments for drugs, supplies, equipment and labor, and provided free staffing to a number of Georgia ASCs in order to induce the centers to select the anesthesia groups to be their exclusive anesthesia providers in violation of the AKS, which resultingly caused the submission of false claims in violation of the False Claims Act.
The settlement was entered into by the following individuals and entities:
- Ambulatory Anesthesia of Atlanta, LLC
- Arif A. Aziz, M.D.
- Jean Calhoun
- Jay A. Cherner, M.D.
- David Finkelman, M.D.
- Alan M. Fixelle, M.D.
- DCA Diagnostics, L.L.C.
- The Endoscopy Center, LLC (Savannah)
- Endoscopy Consultants, LLC
- Gastrointestinal Specialists of Georgia, P.C.
- Georgia Endoscopy Center, LLC
- G.I. Diagnostics Endoscopy Center, L.L.C.
- Eugene H. Hirsh, M.D.
- Steven McIntosh, M.D.
- North Fulton Medical Center, Inc.
- Northside Anesthesiology Consultants, LLC
- Northwest Georgia Orthopaedic Surgery Center, LLC
- Stanford Plavin, M.D.
- M. Thomas Riddick, M.D.
- Bruce A. Salzberg, M.D.
- Gary S. Simon, M.D.
- David N. Socoloff, D.O.
- United Surgical Partners International, Inc.
- Wellbrook Endoscopy Center, P.C.
Note that as is often the case in connection with these types of allegations, the settled matter began with a whistleblower lawsuit. The case is United States ex rel. Capitol Anesthesiology, P.C., et al. v. Stanford Plavin, M.D., et al., No. 1:11-cv-2513-SCJ. The nominal plaintiffs, known under the FCA as “relators”, are Kathleen Hartney-Velazco, M.D., Jan Kersey and Capitol Anesthesiology, P.C. According to the DOJ, over $4.7 million of the settlement funds went to the realtors.
Remember, that in cases of this sort, which are civil, not criminal, settlements resolve allegations, do not involve any admission of culpability or guilt, and there has been no determination of liability.
In the broader context, beyond the facts of the recent settlement, penalties for violation of the AKS include jail time, criminal fines, civil monetary penalties and debarment from participation in federally funded healthcare programs.
What passes as common knowledge in this area does not come close to comprehending the complexity of AKS compliance.
In my experience, the other party to one of these deals often claims, rightly or wrongly, that the deal has been “approved by our healthcare counsel.” Maybe they’re lying. Maybe they’re telling the truth and their lawyers are clueless; the lawyers certainly won’t go to jail for their client.
Be very careful when entering into any arrangement with a referral source or a recipient of your referrals. Get experienced healthcare counsel involved at the earliest point. |
| | | 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:
Today I want to talk to you about the wrong road more traveled.
I was thinking a few moments ago (as I gathered my thoughts to record) about when I learned to ride a bicycle.
I remember learning to ride a bike with training wheels. I'd ride in the alley behind my house.
When I was around six years old my father took the training wheels off and drove me, with the bike in the back of his station wagon, to a parking lot about a mile or two from the house. It was a Sunday. He got me out of the station wagon, got the bike out, and told me to ride home. He drove off. Now, that may seem cruel to you. (It might seem even more strange if you knew that my father didn't know how to ride a bicycle.) At that age, it was a very long ride home, but I made it. The street I started at, Sepulveda, is one of the longest in L.A.. I don’t know exactly how many miles it runs from the very north end of the San Fernando Valley all the way into Torrance, perhaps past that.
So, I was just thinking about very long roads, and that's the analogy, the long road we are all on in many ways. And, that got me thinking about the long road to a deal.
Some deals come together very quickly, while other deals move glacially.
Sometimes along the way the deal doesn’t look too good. Something happens. What do you do? Do you continue going because of the “sunk cost” of the deal so far?
I don’t think you should.
Instead, you should follow the proverb that however far you’ve gone down the wrong road, turn around and go back. Yeah, it's easy to say but very difficult to do. I guess psychologically we feel that stopping or turning around is failure, as if failure itself is bad. As a result, many think that failing in the negotiation is worse than continuing through with a bad deal. I’ve seen this play out probably thousands of times. I’ve seen the pain and expense of unwinding a bad deal. I’ve seen the horrible effects of a bad deal that was closed by someone who was rewarded for closing deals, not for the kind of deals that were closed. Think about these things when you have hit some sort of an inflection point at which you wonder, "is this deal really a good one?" This contract? This partnership?
If it's not, then even if you’ve sunk a year and a half of effort into planning it – stop, turn around, and go back.
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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 - Rainbows, Unicorns and Fraudulent ASC Deals - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
ASCs can be great investments for physicians. Oh, as long as they are real.
But if all they are are rainbows, unicorns, and clear blue sky, then you’d better stay away.
The problem, of course, is telling the difference.
Some seem to have a hard time doing so.
I recall a story from a couple of years ago in which three members of a family, the promoters of a fake surgery center scheme, pleaded guilty for their roles in defrauding investors.
But wait, the story gets better. The three initially settled a civil suit brought by the New Jersey Bureau of Securities that they defrauded 26 investors in an ASC scam. How much money they took is unclear, but the facility itself was never built. The trio agreed to pay $5.5 million to settle, $4 million of which was in investor restitution.
No sooner than the ink dried on the settlement, the family then conned 15 of the same investors out of $3 million in a second scam!
This time, the scamsters were charged criminally and, eventually, pleaded guilty. Two are facing years behind bars and one is to receive probation.
One thing’s for sure, their ASC has a 0% infection rate. Or, maybe it’s 100%. I guess it all depends on what exactly we’re measuring.
Simply warning you to do due diligence in connection with any ASC investment seems trite, but this case, which is humorous only because neither you nor I was one of the conned investors, illustrates why it’s not.
You might say it’s anecdotal, but in my practice I’ve seen multiple forms of ASC scams, from fake surgeries and fake patients, to patients who had surgery but didn’t require it, to surgery center promoters who, as did the defendants in the above scam, used surgery center proceeds to pay for items for their personal use.
The bottom line for you, as an ASC investor, is to carefully investigate the deal, and its promoters, on the way in, and on a periodic basis after the investment is made.
If you don’t, then don’t be surprised that some of the investment is sitting in the promoter’s garage. It’s that red Ferrari F430 Spider parked next to the blue Bentley Continental GTC Speed.
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| | | Listen to the podcast here, or just keep reading for the transcript.
Dr. Watson.
No, not some man named Robert or some woman named Roberta. But the machine, the computer, created by IBM.
Will today’s physicians soon be referred to as “human physicians” or “carbon-based docs” as opposed to the silicon-based kind? Paging Dr. Robot?
Maybe. Maybe not.
But in many areas the handwriting is on the wall, at least as to some elements of physicians’ actual medical practice roles, and it’s not looking so good for you. That is, if you’re one of the carbon-based kind.
Even if you think that I’m overstating the impact of a roboticized or AI future, you need to hedge your bet. In this post, let’s examine a very simple question: If Dr. Watsons (whether owned and controlled by your group or not — that’s another question) alter the demand for carbon-based docs within your group, does your group have a mechanism for “rightsizing?"
Unfortunately, many medical groups operate a very flat structure, bulked up on owners, often due to a culture of near lock-step advancement. They have a preponderance of owners compared with few non-equity-holding physicians.
That compounds the affect of their failure to adequately address the ability to flex total staffing downward. With the exception of terminating non-owners without cause or simply not renewing their employment agreements, these groups have no affirmative way to pare back the rest of their staff, the bulk that consists of owners. The notions of simply adjusting work assignments downward (e.g., moving all physicians to part time) or of waiting for physicians to voluntarily leave the group (for where?) are inadequate.
Medical groups must now protect their options to act if, or better said, when, the impact of quickly advancing technology impacts their staffing level. What steps must group leadership take? What steps may they take? Who, at what level, makes the decision?
Now is the time to address these issues. It will take time to consider alternatives and make decisions as to those that the group will adopt. It takes time to get buy-in from those required. It takes time to make the required revisions to agreements. And it takes time to get those agreements signed and in place.
If you wait until the actual impact of Dr. Watson hits your group, I assure you that it will be impossible to force the implementation of the changes that will be required to preserve your group and its business.
Yes, you can choose to do nothing and wait. Doing nothing is a choice, a choice to risk becoming nothing.
[Yes, there’s a chance that this article was written by an AI machine and that a good chunk of law practice, too, will be taken over by Dr. Watson’s brother, also named Watson. I’ve got my contingency plan, which is the point.] |
| | | 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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| | Help Us Help You With Helpful Content
What tailored content would you most like to see during this
time? How can we focus on solutions to your most pressing strategic concerns?
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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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