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| Dear Friend,
A $170,553,350 penalty isn't small change.
The federal False Claims Act (“FCA”) traces its history back to the Civil War, a time at which unscrupulous vendors sold defective goods such as blankets and boots to the Union army. The result was to adopt legislation both penalizing the filing of false claims and incentivizing private citizens to alert the government by paying them a bounty.
As the law’s developed over time, it now impacts a wide range of equally unscrupulous behavior in a wide range of government contracting, including the filing of fictitious and overstated claims for health care services under federal health care programs.
You're probably familiar with the fact that damages under the FCA are trebled. In other words, $1,000 worth of actual damages becomes $3,000. And, you might be familiar with the fact that, in addition to damages, penalties apply.
Here's where a recent judgment demonstrates the importance of understanding FCA math, especially the fact that added penalties, which exceed $11,000 per claim, can be, and actually are, assessed against each and every claim.
What began with a whistleblower lawsuit under the FCA by a physician employee followed by the entry of the U.S. government into the case, resulted last week in a judgment against two ophthalmologists, Emelike Agomo M.D. and Mustapha Kibirige M.D., as well as Outreach Diagnostic Clinic and Outreach Eyecare, as a result of 14,450 false claims to Medicare.
As alleged by the government in their complaint: The defendants performed standard eye pressure tests on Medicare patients for which they received reimbursement. Simultaneously, they falsely charged Medicare for a special eye pressure test claiming it was performed separately on the same day.
On November 18, 2021, the U.S. District Court for the Southern District of Texas determined that damages total $2,422,350. And, key to the math lesson of this post, the Court also assessed the maximum penalty of $11,803 against the defendants on each of the 14,450 false claims, for an additional $170,553,350.
FCA penalties are not assessed per scheme. Per claim actually means for each and every claim. 14,450 false claims means 14,450 penalties.
The result can be, and is, as I am sure Drs. Agomo and Kibirige would attest, astronomical. As in $170,553,350.
Cooking up a scheme to add a fake charge onto a few thousand patient encounters isn’t a single scheme in terms of penalties; it’s a few thousand of them. All you have to do next is multiply by $11,803 . . . plus three times the amount of the claims themselves. That’s why you learned multiplication and addition when you were in elementary school. |
| | | 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:
They say there’s no correlation between the skill of a chess master in terms of translating it into life strategy off the chess board.
Maybe that’s true. Maybe it’s not.
But in any event, I want you to think about being a grand master in terms of structuring deals.
Why are you structuring the deal? What's the end-game? What’s the liquidity value, if we were to translate this into terms that might be used by a private equity buyer putting money into a venture? In other words, how are you going to get your money back out? What is the very end game in the long-term strategy?
As opposed to seeing events in business deals or business relationships as purely tactical, in other words, as one deal such as an acquisition or the development of an ASC, think beyond the closing of that particular deal.
So with the ASC example, what are you going to do with that ASC five years from now? Is it simply a device to increase current income, or is it part of a future sale, or is it part of the creation of something larger, such as a chain of surgery centers? Or are you building a chain of surgery centers, physical therapy, imaging and other elements – in essence the creation of a mini-system to drive profit during the operational time and also to groom for sale later?
How you’re going to structure the deal, who you're going to deal with, and who you want as part of your team, all factor into this, and surely more than on a piecemeal basis.
Yeah, you should be thinking like a grand master.
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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 - I'm A Partner. I'll Do What I want To - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
If you’re a longtime reader, you know that my view is that almost all of the instances of a medical group’s organization and operation are related . . . that either they are managed in order to achieve success or they are treated silo-like (or even ignored), resulting in stagnation and failure.
In an educational setting (not a client engagement), I was asked whether a physician member of a group, a partner, could opt out of a new managed care agreement being entered into by the group. I was told that the carrier didn’t care if he did.
I found the question to be rather funny. The real question is not one of managed care contracting; after all the affected carrier consented. Rather, the real question is whether the group cares that it is slowly ceasing to be a group.
Letting each partner write his or her terms of partnership is not a long-term strategy for success, it’s a short-term strategy for failure.
Maybe your group thinks the partner’s question was funny, too. But ask yourself how many other “special deals” or “it’s just this once” you’ve let your partners cut, or, worse yet, the group has cut for them. |
| | | Listen to the podcast here, or just keep reading for the transcript.
I listened to a very interesting podcast called “The Soul of Enterprise.” It’s a business podcast mostly aimed at accountants, but it applies to other professional service providers as well.
The hosts were talking about the notion of “yield management,” the concept that airlines use to maximize the profitability from pricing the seats on a plane, and of course, on how they segment those seats into classes, thus segmenting the market.
In other words, they carefully segment each flight into so many first-class seats, so many “premium” coach seats or whatever they call them on the airline, and so many regular coach seats including those dreaded ones back by the lavatory at the tail of the plane.
Airlines have figured out that there are different customers who are flying for different reasons and at different price points. They’ve also figured out that some are willing to travel in a slightly different style. It’s not that the people who fly first class get from Dallas to Chicago any faster, and it’s not the case that anyone flying from Dallas to Chicago is any safer as a result of paying more money to fly first class as opposed to paying bottom dollar fares to sit next to the lavatory in the back of the plane.
And yes, there's an analogy here to healthcare.
I’m not about to suggest that any of you cut back on the quality of the medical service that’s being delivered to patients any more than an airline cuts back on safety when no one is seated in first class.
Instead, I suggest that you think about how the pricing model, that is, the value exchange model, on an airplane can be instructive in terms of how you provide different tiers of service to your patients.
A similar concept is certainly applicable to office practice physicians. There’s the whole notion in internal medicine and family practice of concierge medicine, which is a complete transfer of the notion of first-class care, meaning first-class customer care, first-class human touches, as opposed to, for example, a clinic setting in which the medical care is just as good, but the surroundings in which it's presented differs wildly.
Different patients have different expectations in terms of how soon they will be seen. Different patients have different expectations about how they’re treated. Are they shown to a separate waiting room or are they just plopped in with everyone else? And so on.
Different patients would, and do, attach different price points to the level of service and interaction.
It's also true that payor considerations screw up a lot of this, but certainly not all of this. And, for many of you who are escaping an insurance model, it doesn’t hinder your development of a segmented care "cabin" but feeds right into it.
Think about the way business models in other industries segment customers by the level of service those customers want, and, are willing to pay for. Think about how those or similar concepts can be applied by you. |
| | | 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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