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| Dear Friend,
Boilerplate.
That's the subject of this Monday's blog post, Did You Notice the Notice Provision? You can follow the link to read the post online, or just keep reading for the rest of the story.
Most likely you skipped right over all of those sections at the end of the contract. You know, the ones that you probably call “boilerplate” (that’s what lawyers call them, too).
Most people think that boilerplate is just extra stuff that lawyers toss in. Longer contracts mean more fees, right?
But boilerplate isn’t “extra stuff” at all; in fact, it’s the exact opposite: boilerplate got its name because it provides a protective layer around the rest of the contract, provisions design to help you sure that you get the deal that’s laid out in the deal-related provisions of the document.
Despite the mini-law school lesson above, there’s still a chance that most people gloss right over the boilerplate in an agreement. No, I know that’s not you, but just in case you forward a copy of this blog post to someone else, let’s talk about one of the provisions that is far more important than it appears, the notice provision.
The notice provision is, as its name indicates, the provision describing who gets notice, how that notice must be delivered, and how much notice (i.e., how much time) must be given in order to trigger certain events under a contract, such as giving notice of breach and triggering the allotted time to cure.
In my opinion, there’s no such thing as a standard notice provision. Let’s play with some, but by no means all, of the alternatives and see what you think.
1. Who gets notice? The parties alone or the parties plus someone else, say their legal counsel? If it’s to the parties plus someone else, must both actually be sent the notice or is it that notice to one is required but that the second receives it as a courtesy?
2. If the parties are entities, is notice addressed to the entity itself or to a particular person?
3. How is notice to be sent? By regular mail? By some type of special mail such as registered? By overnight courier such as FedEx? By email? By in person delivery? By more than one method? “Has the analysis changed since the beginning of the Covid pandemic? (No, but it took the pandemic for most to do the thinking.)
4. Is notice effective when it is dispatched or when it is received? What does “received” mean, actual receipt or deemed receipt? What about the kind of provision that says that notice sent by US Mail is effective, say, three days after mailing? It once took over a month for something mailed from our Santa Barbara office to reach the Dallas office—if that were a mailed notice, was I supposed to guess that it was sent and what it stated while it sat in some corner of the post office?
5. Do your answers change depending on whether you think you are the one more likely to receive a notice or the one more likely to send it? Do your answers change depending on what sort of notice you’re most likely to receive or to send? The answers are likely “yes” and “yes”.
We could go on, but this isn’t a post about contract drafting. Instead, it’s a reminder to make sure that you engage in meaningful conversations with your legal counsel over all of the elements of an agreement, not just the ones that say that someone is going to pay you $120,000 a month as a management fee until further notice – oh, you probably noticed that notice bit.
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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:
“Trust but Verify” - Reagan’s words.
“Get it in Writing” - My words.
Look, many of those listening to this are leaders of medical groups with contracts with facilities of one sort or another – an exclusive radiology contract, or an anesthesia contract at an ASC, even for a solo doc, a contract with an employer.
You may have a marvelous relationship with the facility administrator. You’ve known this man or woman for 23 years, and their word has been their bond. But now it is time to negotiate another agreement and you get to some deal point and they say, “well you’ll just have to trust me on this.”
You might trust “Sally” more than you trust your own mother (I’m assuming you loved your mother, and trusted her). But how do you know “Sally” is going to be there when it comes time to call enforcement of that deal point? How do you know that “Sally” isn’t going to be strong-armed and pressured by her boss when it comes to enforcing this point.
I’m not saying this has anything to do with, “Well, don’t you trust me?”
“Absolutely, I trust you, but what if you’re not here when it comes time to enforce what you’re saying you agree to?”
Now if it’s impossible to get that in writing, then I suggest you consider that you don’t have it at all. If you can accept the fact that you don’t have it at all, and it would be considered a “nice to have”, but not an “absolutely, I must have it”, then go ahead and do the deal.
But don’t complain and don’t blame yourself when you later need to enforce that agreement, only to find out the agreement isn’t real, the agreement never existed and you come to hear, “I never said that. How do I know what she said? I’m the new administrator.”
You get the idea.
Trust me on this.
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| | How to Deploy the Secret Sauce of Opportunistic Strategy
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•Defense as a defective default: It’s necessary, but not sufficient.
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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 - Refill on Compound Drugs: Miracle Cure or Kickback Lure? - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
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 statute 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. |
| | | Listen to the podcast here, or just keep reading for the transcript.
Even if you can't even spell sinuplasty, understanding the lessons of the January 5, 2022, indictment of Raleigh, North Carolina ENT Anita Louise Jackson, M.D. will make you breathe easier.
Dr. Jackson, who operated Greater Carolina Ear, Nose & Throat, P.A. (“GCENT”) billed Medicare in excess of $46 million from 2014 through 2018 for more than 1,200 balloon sinuplasty procedures on more than 700 patients. Those billings resulted in more than $5.4 million in Medicare payments to GCENT.
Jackson apparently came on the government’s radar (via a program integrity contractor audit) because that volume made Jackson the top Medicare paid provider of balloon sinuplasty in the U.S. even though GCENT was outside of a major metropolitan area.
In the Superseding Indictment made public last week, a federal grand jury indicted Dr. Jackson for:
- Adulteration of Medical Devices in violation of 21 U.S.C. §§ 331(k), 333(a)(1), 333(a)(2), and 351(a)(2)(A).
- Ten counts of Paying Illegal Remunerations in violation of 42 U.S.C. § 1320a-7b(b)(2)(B) [i.e., the federal Anti-Kickback Statute].
- Three counts of Making False Statements Relating to Health Care Benefits, in violation of 18 U.S.C. § 1035(a)(2).
- Two counts of Aggravated Identity Theft, in violation of 18 U.S.C. § 102A(a)(1).
- Three counts of Mail Fraud, in violation of 18 U.S.C. § 1341.
- Conspiracy, in violation of 18 U.S.C. § 371.
Note that an indictment is a series of allegations only. Dr. Jackson has not been convicted of anything and the criminal trial process is just beginning.
However, if convicted, Jackson faces a maximum term of imprisonment of 20 years for Mail Fraud, 10 years for Paying Illegal Remuneration, 5 years for Conspiracy and Making False Statements, and a 2-year mandatory prison sentence for Aggravated Identity Theft consecutive to any other punishment. She also faces fines exceeding $250,000.
The indictment alleges that Dr. Jackson reused, as a routine business practice, no more than 30 strictly “single use” balloon sinuplasty devices to perform the thousand-plus sinuplasty procedures. Although represented to patients as sterile, the indictment alleges that the devices were simply washed with soap, water and some cleaning agents and then air dried in a non-sterile environment before reuse.
The illegal remuneration charge relates to allegations that Dr. Jackson routinely concealed from her Medicare patients the true amount that they were obligated to pay for the procedures, leading them to believe that they either owed nothing or only a small co-payment. The government alleges that she did not collect the patient copayments and ultimately wrote them off without making genuine efforts to collect. That, according to the indictment, resulted in Medicare paying all, or nearly all, of the balloon sinuplasty charges for her Medicare patients, when Medicare was in fact obligated to pay only 80% of the charges.
The indictment alleges that Jackson used cloned medical records, in some cases word for word, and not complete, per patient, medical records, to justify the necessity of the procedures and to document their performance. It also alleges that Jackson acquired patient signatures on various forms after the fact and had an on-staff notary notarize them as of incorrect dates. Additionally, after being directed as a result of audits to repay Medicare more than $1.7 million, Jackson is alleged to have created and supplied false medical records to support an appeal of the audit result.
The Obvious and More Esoteric Lessons For You Even if the Indictment is Hot Air - Don’t adulterate devices or other items and then use or supply them as unadulterated.
- Don’t subsequently lie about the bona fides of the devices or items.
- Don’t bill for items that were not provided.
- Don’t routinely write-off Medicare patient balances or even present Medicare patients with false bills that indicate no or a falsely low co-pay.
- Don’t use template, or even worse, cloned medical records to support your claims, even if the services were completely, properly, and ethically performed.
- Don’t falsify records and signatures or the date on which they were obtained.
- Don’t lie to federal auditors.
And, perhaps the most important, don’t set yourself up to go to prison by thinking you are setting the government up to overpay 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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| | | | 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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