| View this email online if it doesn't display correctly |
| |
|
|
| |
| Dear Friend,
It was a very, very short speech.
On March 24, 2022, a federal jury found yet another physician, Steven Chun, M.D., of Sarasota, Florida, and an Insys Therapeutics, Inc. sales representative, Daniel Tondre, of Tampa, Florida, guilty for conspiring to pay and receive kickbacks and bribes, in the form of speaker fees, in return for prescribing Insys’s fentanyl drug, Subsys.
Chun owned and operated a pain management medical practice and prescribed a large volume of Subsys, an expensive liquid spray form of fentanyl. To induce Chun to write more and higher dosages of Subsys prescriptions, Insys, through Tondre, held sham speaker events and paid Chun from $2,400 to $3,000 per event.
According to federal prosecutors, the sham speaker events were often attended only by Chun's family and friends or by repeat attendees, and attendance logs included falsified or forged signatures. The government alleged that Insys also bribed Chun by hiring his then-girlfriend to work as an Insys liaison to facilitate the approval of insurance forms for Subsys, including those submitted to Medicare.
All in all, the government alleged that Chun received more than $278,000 in illegal kickbacks and bribes from Insys, and that Tondre received more than $737,000 in salary and commissions over the several years of the scheme. Medicare Part D paid more than $4.5 million for Subsys prescriptions written by Chun.
Each of Chun and Tondre face many years in federal prison.
The Federal Anti-Kickback Statute and Other Prohibitions
In general terms, the federal Anti-Kickback Statute (“AKS”) prohibits the offer, demand, payment, and acceptance of remuneration—that is, of anything of value—for referrals.
The federal government, and many courts, interpret the AKS to apply even when an arrangement may have many legitimate purposes; the fact that one of the purposes is to obtain money for the referral of services or to induce further referrals is sufficient to trigger a violation of the law.
State laws differ in their treatment, scope and interpretation, but generally contain similar provisions barring remuneration for referrals, sometimes expressed as anti-kickback or fee-splitting prohibitions.
The Takeaways for You: - Money: The are many legitimate ways for physicians to increase their practice income. They include, depending on state law, investments in pharmacies and the direct dispensing of pharmaceuticals.
- Structure: But any deal must be structured in compliance with the federal Anti-Kickback Statute, the Controlled Substances Act, Stark, and numerous other federal laws, as well as with various state law counterparts and other restrictions. Your investment in structuring things correctly is an investment in yourself and your jail-free future.
- Compliance Auditing: No matter how well structured, it’s essential that you engage in periodic compliance audits coordinated through legal counsel. Laws change and actual behavior impacts all of the structure and planning. Even the best planning can be made worthless if illegal conduct takes place within the context of what was planned to be a proper structure.
- Investigations: If you learn that you (or any person or entity connected to the operation) are under investigation, immediately engage a team of experienced healthcare attorneys and criminal defense counsel. Many potential prosecutions are resolved at this stage.
- Indictment and trial: Again, immediately engage a defense team of healthcare and criminal defense counsel.
[Thanks to longtime blog follower “J” for bringing Dr. Chun’s conviction to my attention.] |
| | | 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 want to talk to you about an underlying issue, an issue that prevents many medical group leaders from taking action. It's a simple one. It's fear, the fear of criticism, of "what are people going to think?"
Those other people might be in your own group, or professional colleagues in another group. They might be hospital administrators.
What are they going to think about the action you took? Whether that action was successful or whether it failed, the fear is the same.
It sounds simple, but unfortunately, in my experience over the last four decades of working with medical group leaders, I find that it's often the thing that holds people back.
A clue to the cure to the fear comes from a line in the musical "Evita": “It doesn’t matter what those morons say."
Yes, I know that Ms. Peron and her husband turned out to be dictators; but that's not my point. Don’t shoot a gift horse in the mouth.
Make decisions and take actions that you, as the group’s leader, believe are best. Don’t worry about criticism.
Think of it this way: Even if you make the world’s best decision, someone in the future, armed with perfect 20/20 hindsight, is going to criticize you anyway.
So here's the thinking tool:
- You know how to make decisions.
- You are in charge of making decisions.
- If the others, whoever they might be, don’t like the decisions, well just REDACTED them.
It might sound harsh to the uninitiated, but it's actually very liberating. |
| | 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 - Lab Made Kickbacks? Allegations Lead to 10 Indictments. How Not to be Number 11. - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Lab made meat. Lab made leather. Both appeared in the news this week.
But so, too, did the indictment of 10 individuals, including two physicians and one nurse practitioner, for an alleged lab made $300 million kickback scheme.
According to an indictment announced by the U.S. Attorney's Office for the Northern District of Texas on February 10, 2022, the conspiracy involved clinical lab kickbacks disguised as legitimate business transactions.
The scheme claimed by the government involves several lab companies including Unified Laboratory Services, Spectrum Diagnostic Laboratory, and Reliable Labs LLC, which allegedly paid kickbacks to induce internal medicine specialist Eduardo Canova, M.D., family medicine practitioner Jose Maldonado, M.D., and nurse practitioner Keith Wichinski to order medically unnecessary lab tests, which were then billed to Medicare and other federal healthcare programs.
The government alleges that the remuneration was disguised to appear as if it were legitimate. This includes assertions that the defendants were paid, via money funneled through marketers, for claimed medical advisor services that were never performed, that the labs paid portions of the doctor’s staff’s salaries, and that the labs paid a portion of their office leases, contingent on the number of lab tests they referred.
Of particular interest to physicians who would never consider becoming involved in any of the alleged activity, but might have been interested, even if momentarily, in physician-owned lab models, the government also alleges that Jeffrey Madison, the founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory, convinced the co-founders of Reliable Labs LLC, Biby Kurian and Abraham Phillips, to convert Reliable into a physician-owned lab. The indictment claims that Reliable offered physicians ownership opportunities only if those physicians referred an adequate number of lab tests.
It's claimed that the scheme generated more than $300 million in fraudulent billing and that Dr. Canova received more than $300,000 in kickbacks for ordering more than $12 million worth of lab tests, and that Dr. Maldonado received more than $400,000 in kickbacks for ordering more than $4 million worth of lab tests.
The charges levied against the various defendants include conspiracy to commit healthcare fraud, conspiracy to pay and receive healthcare kickbacks, offering or paying illegal kickbacks, and soliciting or receiving illegal kickbacks.
If convicted of the alleged conduct, the defendants face up to 55 years or more in federal prison.
For the curious (and to satisfy schadenfreude), the indicted defendants are: - Jeffrey Paul Madison, 56, founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory
- Mark Christopher Boggess, 49, chief operating officer for Spectrum and Unified
- Biby Ancy Kurian, 49, co-founder of Reliable Labs, LLC
- Abraham Phillips, 50, co-founder of Reliable Labs, LLC
- Dr. Jose Roel Maldonado, 48, family medicine doctor based in Laredo
- Dr. Eduardo Carlos Canova, 44, internal medicine specialist based in Laredo
- Keith Allen Wichinski, 50, board-certified nurse practitioner based in San Antonio
- David Michael Lizcano, 56, owner of DCLH, a marketing firm engaged by Unified, Spectrum, and Reliable
- Laura Ortiz, 58, sister of David Lizcano and an employee at his marketing firm
- Juan David Rojas, 34, owner of Rojas & Associates, another marketing firm engaged by Unified, Spectrum, and Reliable
Remember, an indictment is an allegation of criminal conduct; it is not a determination of illegality nor is an indictment itself evidence. Drs. Canova and Maldonado, and each of the other defendants, are presumed innocent until proven guilty in a court of law.
The (Should be) Evident Takeaways
The federal Anti-Kickback Statute makes it illegal to offer, solicit, pay, or accept remuneration for the referral of services or products to federal healthcare program patients.
Penalties for violation of the AKS include jail time, criminal fines, civil monetary penalties and debarment from participation in federally funded health care programs.
What passes as common knowledge in this area does not come close to comprehending the complexity of AKS compliance. Certainly, any payment in cash or in kind, such as for rent or staff salaries, in connection with a referral arrangement should easily be seen by you for what it is – a kickback.
More sophisticated schemes, often centering around, in the lab context, physician-owned labs and schemes that claim to segregate referrals of federal healthcare program patients from all other patients, are, for many, harder to spot, but they should all be viewed by you as painted with fluorescent bullseye targets.
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 in time – and, that means, before you do it. |
| | | Listen to the podcast here, or just keep reading for the transcript.
Another day, December 8, 2021, to be exact, another $4.2 million.
That's the settlement the government will receive in total from an ENT, Jeffrey M. Gallups, M.D., the founder, owner, medical director, and past-CEO of Georgia-based Milton Hall Surgical Associates (“MHSA”) a/k/a The Ear, Nose & Throat Institute, and medical device maker Entellus Medical to settle kickback allegations in violation of the federal Anti-Kickback Statute.
Originating from a whistleblower suit filed by a former MHSA physician, the government alleged that Dr. Gallups received kickbacks from Entellus in various forms including cash and all-expense-paid trips, in return for Gallups requiring MHSA’s dozen-plus physicians to use Entellus’s sinuplasty medical devices and to increase the number of sinuplasty procedures conducted on patients (and, therefore, increase the volume of Entellus devices sold).
Although allegations are simply allegations, and in resolving them there was no admission of culpability, Gallup agreed to pay $1.2 million, and Entellus (through its new owner, Stryker Corporation) agreed to pay $3 million, to resolve the civil case.
Interestingly, the same settlement resolves civil allegations against Gallups that he also entered into a kickback arrangement with NextHealth, LLC, a now-defunct medical testing laboratory. Pursuant to the government’s claims, Gallups directed MHSA physicians to order toxicology and genetic tests from NextHealth over physician objections that the tests were not medically necessary. Gallups allegedly received 50% of NextHealth’s revenue from the ordered tests.
And, although the settlement involving Dr. Gallups discussed above relates to civil claims, on October 21, 2021, Dr. Gallups pleaded guilty to health care fraud, that is, criminal allegations, relating to NextHealth.
Some Takeaways For You
- Kickbacks are big business, both for those paying and collecting them, but also for the government.
- Civil allegations, whether or not arising from whistleblower claims, make the government a dollar-on-dollar return that makes Warren Buffett look like a beginner.
- Civil allegations can be settled, but doing so rarely involves the resolution of potential criminal allegations. You can pay up in dollars and then pay up later with time, time behind bars, that is.
- Yeah, I have a dog in the race, but get competent legal advice before agreeing to get anything of value, including a discount, from someone or some entity with whom you do business or with whose business you can impact referrals. You don’t want to gallop down the same road as Gallups, do 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.
|
| | 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?
|
| | | | 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.
|
|
|
| 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.
|
| | | | 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. |
|
|
