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| Dear Friend,
Compounded medicine. Compounded kickbacks.
It’s the middle ground between light and shadow, between medical science and stupidity, and it lies between the pit of man’s desires and the summit of his bank account. This is the dimension of disintegration. It’s an area which we call the Indictment Zone.
Jerry May Keeper, Gary Robert Lee, and Krishna Balarma Parchuri. Christopher R. Parks. Three doctors and a former lawyer. The stuff of dreams compounded, so it is said, with a heavy dose of dreams of stuff.
Compounding pharmaceuticals, specific drugs for specific patients, offers tremendous benefit. The problems arise when the benefit is for the prescribing physician. Then, as Dr. Keeper, who pleaded guilty in February 2022, would certainly attest, and as Drs. Lee and Parchuri, and Mr. Parks, might attest, that is, if they elect to testify in their own defense at trial, we’re dealing with analyses under the federal Anti-Kickback Statute (AKS) and state law counterparts.
In a case currently winding its way toward trial in the U.S. District Court for the Northern District of Oklahoma, Lee, et al., are alleged to have engaged in a host of criminal acts centering around a compounded prescription scheme.
Lee and Keepers were charged with conspiracy to commit health care fraud. Keepers and Parchuri was also charged with soliciting and receiving illegal bribes and kickback payments. Additionally, Parchuri was charged with obstructing the criminal investigation into the health care offenses.
According to the indictment, beginning in 2012, Parks and Lee, who controlled several compounding pharmacies including OK Compounding LLC, in Skiatook, Oklahoma, One Stop RX LLC in Tulsa, Oklahoma, and NBJ Pharmacy LLC and Airport McKay Pharmacy, both in Houston, Texas, conspired to pay kickbacks to physicians to induce them to write expensive compounding prescriptions to be filled at the controlled pharmacies.
As a part of the conspiracy, the government alleges that the kickback-receiving physicians were provided with pre-printed prescription pads that listed compounding formula choices; physicians checked a box and then faxed the form directly to the associated pharmacy – no prescription was handed to the patient for him or her to take to a pharmacy of choice.
Claims for payment for the compounded drugs were submitted to federal health care programs as well as to private payors, and the proceeds allegedly split among the defendants using a variety of methods.
The government alleges that Parchuri received up to $50,000 a month in exchange for writing those prescriptions, and that over time, Keepers solicited and received more than $860,000 in kickbacks and bribes.
The indictment claims that kickbacks were disguised through sham agreements, including purported pharmacy and university study “medical directorships” and “consulting physician” agreements, as well as via intermediary limited liability companies.
As always, note that allegations and indictments are charges only and not convictions. The defendants are innocent until proven guilty or until they choose to plead guilty.
However, defending against charges such as these is mindbogglingly expensive. At least one of the physician defendants had replacement counsel appointed for him by the court because he could no longer afford to pay for his own defense.
Whether or not due to economics, on February 16, 2022, Dr. Keepers, in a plea deal, pleaded guilty to one count of soliciting and receiving a healthcare kickback. He admitted that OK Compounding solicited him to write prescriptions for his patients that would be filled by the pharmacy, and that he knowingly received $25,000 from the pharmacy’s representatives.
Pursuant to his plea deal, which is yet to be accepted by the court, Dr. Keepers will serve 36 months of supervised probation and pay no more than $1,518,180.46 in restitution. Keepers is scheduled to be sentenced on May 10, 2022.
It appears as if the allegations against the remaining defendants, physicians Gary Robert Lee and Krishna Balarma Parchuri, and former attorney Christopher R. Parks, are moving forward. One might, guess that Dr. Keepers will be testifying at their trial, but that’s yet to be seen. And, despite that, remember again that there’s been no determination of Lee’s, or Pachuri’s, or Parks’ guilt; until then the allegations are just that, claims asserted by the government.
If convicted, conspiracy to violate the federal anti-kickback stature carries a possible maximum sentence of five years in prison and a $250,000 fine. In addition, violation of the anti-kickback statute itself carries up to 10 years in prison and a $100,000 possible fine. A conviction of health care fraud without injury or death also carries a possible maximum of 10 years in prison, but if resulting in injury or death, the maximum penalty climbs to 20 years or life in prison, respectively.
Compounded drugs are valid treatment. Prescribing them is legal. However, accepting (or paying) kickbacks to prescribe them is a crime.
Seems simple, but each year, no, each week, we’re reminded that “simple” isn’t much of a deterrent to stupid.
There are many legitimate ways for physicians to increase their practice income. They include, depending on state law, investments in compounding pharmacies and the direct dispensing of pharmaceuticals. But any deal must be structured in compliance with the anti-kickback statue. And then, of course, also in compliance with other applicable laws, from Stark to state law considerations.
Just because some other party to the deal tells you that a deal’s been vetted by their lawyers and is “legal,” don’t bet on it. Vet it through your own counsel and assess your own risk. As in carpentry, measure (assess) twice, cut (do the deal) once. Or not do the deal – you get the idea. If you don’t get the idea or if you have questions, contact me.
After all, that other party won’t be paying your fine or doing your time.
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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.] |
| | Watch Tuesday's video here, or just keep reading below for a revised, more polished version:
I’ve been thinking about government shutdowns, not of elective surgery, but of a different kind.
And, yes, this is one of my political/philosophical posts, so if you don't want to read it, skip it.
A while back, I attended a very large national healthcare conference. One of the lectures I sat in on involved a guy speaking who was, in essence, the chief lobbyist for a certain medical specialty's national organization. He talked about all the “tremendous wins” from their lobbying efforts.
He was talking about lobbying around a MACRA-this and MACRA-that, which led me (in the back of the room) to wonder why so much money needed to be spent on lobbying efforts, and on whether things like MACRA are just giant wastes of time that we get a result of representatives of far below average intelligence, who have nothing better to do than pass moronic legislation, they themselves having never engaged in anything of much productivity.
What makes this worse is that half-baked laws are implemented by unelected bureaucrats who have to justify their jobs by making up other laws (oops, regulations that have the force of law), when those who are making those things up can’t even be tossed out of office because, absent a government shutdown, they're unelected and very hard to fire.
Do we need all these "non-essential" folks?
What would things be like if we didn’t have them?
Might they have to find productive jobs?
Might they stop gumming up the works that cost medical groups countless thousands or maybe even tens of thousands of dollars a year in lost productivity as well as the cost of the actual dollars paid out in order to comply and to prove up compliance?
Many bemoaned the government shutdowns of elective surgery. But maybe a permanent government shutdown of these "non-essential" regulators is what we should all be hoping for. |
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The price to attend is $479. The cost of not attending is astronomical. |
| | | Wednesday - From Pigs to Model T's to Medical Care - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
"Value based billing" remains dominant in the medical industry news. Mostly, though, it’s a lie because value is determined by the customer, not by some bean counter at CMS. Sure, CMS may be paying the bill for Medicare patients, but the patients are the actual customers and only they can assess whether value was truly delivered.
Yes, I know. I can hear you out there, the third guy from the left, wearing khakis and a white lab coat, muttering, “But, CMS is paying the bill." And, of course, that’s the problem. Once organized medicine (read that as the letters A, M and A) bought into the concept of Medicare in 1965, physicians opened the doors to government meddling. After all, if the government is going to pay, the government is going to demand something, and something more and more and more, as the price for payment. To quote President Reagan, "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.’”
When you hear the words “value based” in connection with healthcare, just view them as a flare in the night warning you that within the next moment or so you’ll hear something that sounds socially useful but which has nothing, or very little, to do with anything other than figuring out how to pay you less or control you more. This is especially true if the comments are coming from an “economist,” because economics is the study of who gets what in the actual world, while today's so-called “economists” are those who’re preaching who should get what in their imagined world. Unfortunately, these folks are often paired with those who have guns, i.e., the government, to enforce their nonsensical theories.
If you don’t believe that value is determined by the patient, here’s an interesting story, as noticed on the web from the site of Florida TV station WPTV.
An expectant mother, Paula D’Amore, was in labor and on her way to Boca Raton Regional Hospital with her husband. They were just a wee bit late, as the baby popped on out in the D’Amore’s car in the hospital parking lot with help from Mr. D’Amore followed by some assistance from a few nurses who came on out to their car.
The value issue?
Well, the hospital decided to bill Ms. D’Amore the full charge of the use of its delivery room, over $7,000, even though neither Ms. D'Amore or her baby were ever in the delivery room. (Attention hospital CEOs: neither car nor parking lot equals delivery room.)
Another local news outlet, the Sun-Sentinal newspaper, reports that the hospital’s vice president for marketing said the hospital felt that the delivery room charge was a suitable bill. Perhaps the paper got the guy’s title wrong, because it seems more like “VP of sales prevention” than of marketing.
The point, of course, is that the value of the services received by Ms. D’Amore can only be assessed from her point of view, not the hospital’s. Even more ridiculously, is to assume that someone over a thousand miles away, as in Washington, DC, can determine value.
Yes, the payor can dictate the amount that they will pay. But at least let’s be honest about this and acknowledge that that amount has nothing to do with value. Of course, saying “screw you, this is what we’re paying and this is the data you have to give us before we’ll give you even that” isn’t politically correct, and these folks are if anything, politically correct. |
| | | Listen to the podcast here, or just keep reading for the transcript.
Time travel.
A joke? Or can you do the equivalent right now?
It's a familiar theme in literature and even television. H.G. Wells' The Time Machine. Quantum Leap. Even Dr. Who.
But this isn't a post about science fiction. And it's not a post about metaphysics.
It's a post about determining where you are in your practice and especially the business of your practice. It's about who determines that place, you or someone else. And, at its heart, it's a post about losing the old lockstep notion of a career that, for physicians, can be traced back to elementary school -- the notion of having to work your way up the ladder.
But why are you convinced that you have to work your way up the ladder step-by-step? Why can't you simply jump, skipping ahead as many rungs you want, taking a quantum leap from your present position to another more desirable one? You can.
This has parallels in connection with the commoditized healthcare market we're presently in. Some cower in fear, metaphorically and actually, of the creative destruction decimating medical group stability. But at the very same time, there are some physicians who've made tremendous leaps in respect of their success and in the success of their groups. They haven't let societal trends dictate their future. This requires a different mindset. A mindset that you're not trapped by the circumstances.
On an almost daily basis, I get personal emails, email threads, and listserve entries bemoaning the sender's circumstances – it's like a parody of senior citizens sitting around the pool, one out doing the other with stories of maladies and discontent. Yet at the same time, I'm dealing with a professional who is in his late 80s and who is planning his next big move with the mindset of someone in his 50s. He's not playing the game – or rather, he's playing his own game.
What game are you playing? What league have you put yourself in? |
| | | 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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