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| Dear Friend,
Call it a bad dream. Called a nightmare. Just don’t sleepwalk into a violation of the federal anti-kickback statute (“AKS”).
The AKS, a criminal statute, makes it illegal to knowingly and willfully offer, pay, solicit or receive any remuneration to induce a person:
(1) to refer an individual to a person for the furnishing of any item or service covered under a federal health care program; or
(2) to purchase, lease, order, arrange for or recommend any good, facility, service, or item covered under a Federal health care program.
Although violation of the AKS can lead to fines and penalties, including imprisonment, the law can also be enforced civilly by way of a federal False Claims Act (i.e., “whistleblower”) lawsuit.
Even though the AKS has been in existence since the early 1970’s, many subject to it appear to be prone to violate it. In part that’s because it’s possible to sleepwalk into some less than completely obvious violations of the law. Note, though, that these sorts of violations are neither secret nor esoteric; they just don’t rise to the attention-getting level of bags of cash, phony marketing agreements, and payments for “educational presentations” that last fewer than 29 seconds.
A recently settled whistleblower action alleging an underlying violation of the AKS provides an illustration of the type of arrangement that is perfectly legal in many industries and professions, but which was alleged to be illegal in the healthcare context.
The settlement involves the agreement of Philips RS North America LLC, formerly known as Respironics, Inc. (“Respironics”), a nationwide manufacturer of sleep and respiratory durable medical equipment (“DME”), to pay $1,283,825.40 to settle allegations that it unlawfully induced referrals for its equipment in violation of the AKS and the False Claims Act. In addition, Respironics entered into a five-year Corporate Integrity Agreement (“CIA”) with the Department of Health & Human Services’ Office of Inspector General (“OIG”). The CIA requires Respironics to implement and maintain a robust compliance program that includes, among other things, review of arrangements with referral sources and monitoring of Respironics’ sales force. The CIA also requires Respironics to retain an independent monitor, selected by the OIG, to assess the effectiveness of Respironics’ compliance systems.
Note that the settled allegations were just allegations – Respironics did not admit to any wrongdoing, none was proved, and Respironics was never criminally charged.
Specifically, the government alleged that Respironics helped a customer DME supplier procure a twelve-month, interest-free loan that was fully guaranteed by Respironics. Under the arrangement, Respironics bore the full financial risk of non-collection on the loan in the event the DME supplier defaulted on the loan. The United States contended this arrangement violated the Anti-Kickback Statute and, in turn, the False Claims Act. Note that it wasn’t alleged that Respironics made good on the customer’s loan.
The takeaway here is that although it’s relatively easy for physicians, medical group leaders, facility administrators, and others subject to the AKS to quicky understand that outright bribes and kickbacks of the cash-in-the-envelope variety are illegal, it’s another thing for many to think carefully enough to realize that they need to very carefully vet, through experienced counsel, what appear to be routine transactions.
Examples of arrangements of this sort, those into which one could sleepwalk, include providing commercially unreasonable free rent under lease arrangements, providing financing for facility investments, entering into credit enhancement arrangements, or providing simple marketing support, can lead to criminal and civil liability.
Make obtaining an AKS analysis as much a part of a deal as you make putting on a seatbelt part of driving. Be safe out there.
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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 often kid that the reason I stayed in school is that I failed making change at McDonald’s.
Sad to say, but It’s true. It was before cash registers told you how much change to give and I just wasn't very good at making change.
Now there are probably other reasons that I stayed in school, but math was not my strong suit.
Over the years I’ve become a lot better at math, and better at questioning the thinking that goes behind the numbers. I've noticed that it’s very simple to throw some numbers on a physical or digital page and “wow” people with them.
Case in point: I’m looking at a deal right now whereby someone (not my client) is looking for investment money for a new venture, a venture that in essence is being pulled out of an existing large business, a business that those sponsoring the new venture don’t run.
They probably don’t have access to the actual numbers, but based on what they’ve put on a piece of paper, they are claiming a significant “pre-money” valuation of a business that doesn’t exist.
So, what’s behind that? What supports those numbers? Are they simply made up?
Yes, they are.
But if you don’t ask the questions, if you simply believe the numbers, if you’re just good at making change, then the only one who is getting shortchanged is you.
Question numbers in any deal. They’re often not "facts" at all. Very often, especially in the deal-making world, from the expected case volume at a facility to M&A, numbers are just statements of opinion.
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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 - Efforts Don't Necessarily Equal Value - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
I recently heard a news story announcing that General Motors was, per its agreement with the Auto Workers Union, making bonus distributions of, as I recall, $8,300 per worker.
Asked to comment, the union spokesperson said that although the workers appreciated the bonus money, it did make up for the fact that they had not received wage hikes for several years.
Completely missing from her comments, and probably from her mind, was the fact that it's only because of a bailout with our money do any of those union members still have jobs at General Motors.
There is a major disconnect here between efforts and the creation of value. This disease doesn't afflict only those working on the manufacturing line at General Motors, but those in the corporate office as well. All of their previous efforts, and I have no reason to doubt that they devoted huge amounts of time and effort to their tasks, resulted in an overall loss of value: cars that didn't sell and costs that ate the company alive.
Value, on the other hand, is determined by the customer.
Of course, this holds true in all areas (excepting those in which the government has meddled, causing more harm than good, say, as in public schools) including healthcare.
Many physician group members, from leaders to newly hired employees, think that merely showing up and doing their cases is what creates value in terms of the ongoing relationship with their facility. It doesn't.
Look, I'm not saying that treating patients isn't of value. What I am saying is that those efforts are not equivalent to the creation of value in terms of the relationship with facilities. The same holds true in connection with the creation of value as to the relationship with referral sources.
One thing's for certain, the government's not going to bail out your medical group. |
| | | Listen to the podcast here, or just keep reading for the transcript.
Although I’ve been told that the quantum mechanics principle known as quantum superposition suggests that particles can exist in two separate locations at the same time, it tells us nothing about physicians being able to be in two places at once.
That’s odd, because physicians sometime demonstrate that ability, at least on billing records.
On the other hand, in settling civil False Claims Act allegations against her, Anuja Kurichh, M.D., an internal medicine physician and sole practitioner in College Park, Maryland, and her practice, PHC Healthcare, LLC, made no admission of any sort, including, one would suppose, of quantum supposition, when she agreed to pay the United States Government $555,000 to resolve allegations that she violated the federal False Claims Act by submitting claims to Medicare and the Federal Employees Health Benefits Program for procedures and medical management codes indicative of face-to-face patient encounters supposedly lasting for time intervals of ten to fifteen minutes, despite being, per travel records, outside of the United States on the billed dates of service.
According to the government’s allegations, Dr. Kurichh also billed Medicare and the Federal Employees Health Benefits Program for the interpretation of ultrasounds purportedly performed by another physician who did not, in fact, perform those services.
As is always the case in regard to settlements, the claims against Dr. Kurichh and PHC Healthcare are allegations only. The settlement is not an admission of liability by Dr. Kurichh or PHC Healthcare, LLC, nor a concession by the government that its claims are not well founded.
Some Timely Tips For You
- No matter what quantum physics might suppose, the government will never believe you can be boating in Belize and billing in Boston at the same time.
- Even though you are too smart and too honest to try to pull off anything of the sort, the other physicians in your group might not be, especially if your compensation plan pays them based on productivity. Claims made by your group as a result of your physicians’ claimed services can get your group into the same civil mess.
- And, importantly, there need not be any improper intent behind any of your, or your group’s physicians’, billings--a simple mistake, that is, negligence, will get you to the same spot.
- For individuals, the recommended course of action is the same: Don’t commit fraud. Be very careful about billing related mistakes.
- Have both electronic and manual processes, double-checks, and internal reviews in place to prevent erroneous claims and to discover any errors before the government (or a whistleblower) does. If you do discover irregularities, get counsel immediately because the clock will be ticking as to the return of overpayments.
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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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