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| Dear Friend,
To paraphrase William Shakespeare, a rose by any other name might just be fraud.
Are marketing agreements legal? What about management or “administrative services” agreements? How about agreements for scheduling? Surely, those type of arrangements can’t send you to prison!
Indeed, they can if they’re just window dressing for underlying fraud.
An X-Ray View
As the aftermath of his conviction at trial in July, 2021, Solakyan and was sentenced on January 28, 2022, to five years in federal prison and ordered to pay $27,937,175 in restitution to victim insurance companies. The underlying scheme submitted more than $250 million in fraudulent claims, the vast majority for MRIs that weren’t medically necessary, through the California Workers Compensation system for medical services procured through bribes and kickbacks to physicians and others. He’s also been barred from working in the healthcare and workers compensation industries during the three years of supervised release that’s to follow his imprisonment.
Solakyan, through Vital Imaging, San Diego MRI Institute, and other companies, operated diagnostic imaging facilities from the Bay Area in the north to San Diego in the South.
Convicted of one count of conspiracy to commit honest services mail fraud and health care fraud, and 11 counts of honest services mail fraud, Solakyan conspired with physicians and others in a scheme in which the doctors were paid bribes and kickbacks in exchange for referral of Workers Compensation patients. Some of the illegal remuneration was in cash and some was in the form of a “cross referral” scheme in which the participants referred patients to one another.
So-called “recruiters” working for the Solakyan entities required physicians to refer a minimum number of patients to receive cross referrals.
And, getting back to the naïve questions at the top of this post, the participants in the conspiracy obscured the true nature of the financial relationships by entering into sham agreements for “marketing”, “administrative services”, and “scheduling”, when the arrangements were really for kickbacks and bribes.
In addition to Solakyan: Chiropractor Steven Rigler pleaded guilty to one count of conspiracy to commit mail fraud and was sentenced to a 6-month federal prison term. Fermin Iglesias, who was the CEO of various scheduling companies, pleaded guilty to conspiracy to commit mail fraud and health care fraud, and was sentenced to five years in federal prison. Co-conspirator Carlos Arguello was sentenced to four years in federal prison.
What You Really Need to Know
1. Just because an arrangement looks on paper like it’s a management type agreement doesn’t effectively cover up an illegal scheme any more than a beach towel covers up an oil spill in the Gulf of Mexico.
2. The underlying scheme, not the ink on the paper, governs legality versus illegality.
3. Kickbacks and bribes don’t have to be in dollars. You scratch my back, I’ll scratch yours (cross referral schemes) are illegal remuneration, too.
4. A state-law scheme (e.g., worker’s comp) quickly becomes a federal offense via the use of the mail or other means of interstate communication (e.g., a fax machine, a cell phone, a text message).
5. Insurance companies have fraud department stacked to the rafters with former criminal investigators and they love to use the feds to pressure fraudsters and to do the collection work (restitution) for them.
6. A rose by any other name would smell as sweet, but a papered-up scheme actually smells like fraud.
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| | | 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 – Get More Sure That You’re Insured - Success in Motion Watch Tuesday's video here, or just keep reading below for a revised, more polished version:
A few minutes ago I passed an old corvette. It was a ’74 or ’75.
One of my college roommates had a ’74, it was an interesting car. It had a great shape, but the build quality was crap. There were gaps where the hood closed; in fact, the gaps were wider on one side than the other. There were gaps in the door panels. And, in the interior, you could almost stick your finger in the panel gap next to the radio.
In fact, those gaps remind me of medical group insurance policies, especially for large groups.
You think you’re covered for an act that one of your members was involved in. Maybe you are because you have entity coverage. Or, maybe you don’t have entity coverage, but you think you do.
Then you find that you’re sued for an event that one of your own members didn’t cause and (to your chagrin, dismay, and holy crap!) you find out that you’re not covered for that.
You know, brokers do a good job, but they don’t always pay attention to what a medical group needs.
There are also other products that can be had, other ways of closing up gaps that exist between policies.
So if you’re a leader of a large medical group, it pays to conduct a very thorough evaluation of coverage gaps in malpractice entity coverage, in general liability coverage, in cyber liability coverage, and in D&O coverage.
Many don't realize that these are not policies that you should simply buy off the shelf; in many cases these products, especially D&O, can be negotiated so that you end up with a customized policy that far better fits your needs and which provides coverage when you have a claim.
Do a coverage audit. Negotiate for needed coverage. Make sure that you're actually insured.
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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 - Why Culture Counts in Healthcare Mergers and Acquisitions - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
If you think the rate of marriage failure is high, consider the fate of business marriages. Depending on whom you ask and whose data is available for analysis, 70 to 90 percent of all business combinations fail to increase owner value.
But that doesn’t mean that you shouldn’t try. What if all of those failures resulted from stupid mistakes?
Many medical groups and other entities in the healthcare industry are considering merger of some sort, whether structured as a true merger in the legal sense or as an acquisition or other combination, as a strategy for their future.
In weighing their alternatives, they tend to look at the hard numbers to gauge the chances of success. Things like increased market share, greater economies of scale, and the amount of the purchase price.
But the so-called soft factors, most importantly the cultural aspects, are essential factors in the ability of the merger to actually succeed several years down the line. This is especially true in connection with medical group mergers, where individuals, not equipment, are the units of production.
You pocket the purchase price or celebrate the true merger of their practice into yours – glasses are clinked and smiles abound. Yet you or your colleagues now have to work with “those people” for the next three or thirteen or thirty years.
What if your group values openness and they value secrecy? What if your group empowers individual action and they value following policy? What if your group incentivizes productivity and they value fixed salaries?
Bigger is sometimes better, but not always. It’s the right bigger that is better.
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| | | Listen to the podcast here, or just keep reading for the transcript.
Do any of these sound familiar? Your group’s been courting facility X across town as an additional service site. Then you learn that one of your partners, through an entity she controls, has been covering it for the last six months. Or how about the opposite? When Dr. Y was admitted to your group as a full partner, he agreed to turn over his contract at facility X to the group as of the end of the calendar year. New Year’s Day, Mother’s Day, and finally Father’s Day come and go and yet Dr. Y refuses to follow through on his commitment. Breaches of fiduciary duty and of contractual commitment within medical groups occur every day. The question is, are those duties enforced? If they’re not enforced, what signal is being sent to the rest of the group? If they’re not enforced, is it because you think it’s too expensive to do so? If that’s the case, what costs are you considering? Do they include your group’s future? There are many ways to prohibit purely self interested conduct, that is, self interested conduct that is not tied to the group’s self interest. These range from placing physicians into categories that, by law, result in the creation of fiduciary duties, to specific contractual provisions. But just as a 500 page contract is no more binding then a few scribbles on the back of a napkin if it is not enforced, periodic attestations and periodic audits of outside interests can be seen as sticks signaling that there will be a price to pay for violation. What signal is your group sending?
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| | | 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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