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| Dear Friend,
Money from hell.
Unlike Franz Kafka’s Joseph K., arrested and charged with a crime about which he is given no information and for which he is ultimately convicted and condemned to death, Alexander S., full name Alexander Shister, a Milwaukee, Wisconsin-area pharmacist and now felon, knows full well the crime for which he was charged, pleaded guilty, and was sentenced: violation of the federal Anti-Kickback Statute, the AKS, in connection with a pain cream scam.
Unlike Joseph K., there will be no state-administered knife through the heart, “only” 18-months imprisonment, a $40,000 fine, and the obligation to pay close to $1 million in restitution to Medicare and Medicaid.
Shister owned four Milwaukee-area pharmacies. Beginning in 2016, Shister engaged in a scheme to pay co-defendant David Guerrero kickbacks of $100 per Medicare and Medicaid patient referral, in total over $100,000, for expensive compound pain creams. Guerrero, not a medical provider but an employee of two medical clinics, used his position, often without the patients’ knowledge or consent, to order approximately $1 million of medically unnecessary pain creams, including creams not even received by patients.
Guerrero was previously sentenced to 32 months’ imprisonment for his role in the kickback scheme with Shister, as well as a second kickback scheme involving a local medical laboratory company.
The Shister/Guerrero tale is just the latest pain cream scam to be mentioned on this blog. For example, see Greasy Kickback Residue Is All That’s Left of Pain Cream Fraud, Compound King Breaks Bad, Gets Creamed, and No Matter How Hard They Tri[Care], Another Compounded Medicine Scam Creams Out.
Unfortunately, pain cream scams often spread to physicians, sometimes even to hospital-based physicians looking to pick up a little (well, actually, a lot) of cash on the side, generally by way of what appears to be telemedicine, but which is just a technologically polished scam.
The problem became so large that in 2022, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) issued a new Special Fraud Alert urging caution when entering into arrangements with telehealth companies.
Here, in encapsulated form, is what you need to know:
- These schemes, which abound, exploit the public’s acceptance of remote treatment tech, and purport to use telehealth, telemedicine, or telemarketing services.
- In some of these schemes, the companies intentionally pay physicians kickbacks to prescribe prescription medication. Other schemes involve unnecessary DME, genetic testing, and wound care. All result in fraudulent claims to Medicare, Medicaid, and other Federal health care programs.
- Although the breadth of scams is wide both in type, as mentioned above, and in operation, e.g., call centers, staffing companies, marketers, brokers, etc., the commonality is the use of kickbacks to recruit and reward the practitioners.
- Generally, the telemedicine companies solicit and recruit purported patients and shunt them to practitioners, with the aim of arranging for the order or prescription of medically unnecessary items and services for individuals with whom the practitioners have limited, if any, interaction, and without regard to medical necessity.
- Payments to practitioners are sometimes described as payment per review, audit, consult, or assessment of medical charts.
- The telemedicine companies often tell practitioners that they do not need to contact the purported patient or that they only need speak to the purported patient by telephone.
- Practitioners are not given an opportunity to review the purported patient’s real medical records.
- The telemedicine company may direct the practitioner to order or prescribe a preselected item or service, regardless of medical necessity or clinical appropriateness.
- In many cases, the telemedicine company sells the order or prescription generated by practitioners to other individuals or entities that then fraudulently bill for the unnecessary items and services.
The Special Fraud Alert includes a nonexclusive list of telehealth/telemedicine fraud scam characteristics for you to keep in mind:
- The purported patients for whom the practitioner orders or prescribes items or services were identified or recruited by the telemedicine company, telemarketing company, sales agent, recruiter, call center, health fair, and/or through internet, television, or social media advertising for free or low out-of-pocket cost items or services.
- The practitioner does not have sufficient contact with or information from the purported patient to meaningfully assess the medical necessity of the items or services ordered or prescribed.
- The telemedicine company compensates the practitioner based on the volume of items or services ordered or prescribed, which may be characterized to the practitioner as compensation based on the number of purported medical records that the practitioner reviewed.
- The telemedicine company only furnishes items and services to Federal health care program beneficiaries and does not accept insurance from any other payor.
- The telemedicine company claims to only furnish items and services to individuals who are not Federal health care program beneficiaries but may in fact bill Federal health care programs.
- The telemedicine company only furnishes one product or a single class of products (e.g., durable medical equipment, genetic testing, diabetic supplies, or various prescription creams), potentially restricting a practitioner’s treating options to a predetermined course of treatment.
- The telemedicine company does not expect practitioners (or another practitioner) to follow up with purported patients nor does it provide practitioners with the information required to follow up with purported patients (e.g., the telemedicine company does not require practitioners to discuss genetic testing results with each purported patient).
The danger to physicians and other practitioners considering participation in these arrangements is that they potentially implicate multiple Federal laws, including the Federal anti-kickback statute (the “AKS”), the Federal criminal law that prohibits knowingly and willfully soliciting or receiving (or offering or paying) any remuneration in return for (or to induce), among other things, referrals for, or orders of, items or services reimbursable by a Federal health care program. Other triggered laws include the Civil Monetary Penalty Law, the criminal health care fraud statute, and the Federal False Claims Act. Penalties range from multi-year prison terms to significant fines to very large civil penalties.
Often lost on physicians is the fact that even though they might not be the moving party involved in the scam, liability falls on both sides of a kickback scheme. In other words, you can be personally liable, criminally and civilly, in connection with these scams, including for submitting or causing the submission of claims.
With lots of money at play, it’s not hard to see why the government is motivated to investigate and prosecute in order to obtain huge fines and the benefit of the forfeiture (generally to the investigating agency) of scores of millions of dollars.
Some final takeaways for you:
Any deal must be structured in compliance with the federal Anti-Kickback Statute, Stark, and various state law counterparts and other restrictions.
Money, big money, is tempting. I know because I’ve counseled many clients in connection with telemedicine “ventures” paying what they must have thought was money from heaven.
Yes, telemedicine has many valid applications. Violation of the AKS and committing fraud are not among them.
And, the money’s not from heaven. It’s from hell.
Let’s talk before you consider any telehealth or telemedicine arrangement.
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| | | Tuesday - Are You Being Taken for a Ride?- Success in Motion
Watch the video here, or just keep reading below for a slightly polished transcript:
Are you being taken for a ride?
Well, I’ve got two dogs back here. I'm not sure whether you can see them; we’re on our way to doggie daycare today.
That sort of reminded me of the notion of being taken for a ride.
Here’s what I’m talking about.
Let’s say that you’re the leader of a hospital-based medical group. What story are you being told by hospital administration? What promises have they made to you? How have they documented those processes?
When you last negotiated your exclusive contract did they give you the line, “We don’t need to put it in the agreement, you can trust me. Have I ever lied to you before?”
Now, maybe this person hasn’t lied to you before. Maybe the administrator has always been a very straight shooter. But I’m telling you if that administrator leaves, even if you could trust that person, you don’t know the next person and they won’t know the side deal.
Don’t be taken for a ride.
There’s the expression, "trust but verify". You want to trust, but document.
Remember that. If a deal isn’t documented, then when push comes to shove, it’s not really a deal; you may be on your way to, well, metaphorical doggie daycare.
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| | Wednesday - Stars Don't Audition. Why Are You Responding to That RFP? - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript: When I first began practice, I worked for a law firm that represented clients in the entertainment industry.
One thing that struck me from each morning's required reading, Daily Variety, was that although it carried many announcements of auditions for minor roles, stars didn't have to audition at all – in fact, the paper often reported how many scripts some star was reviewing: the buying/selling or supply/demand situation was completely flipped.
It's hard to imagine a more common service commodity than actors in Los Angeles – they are everywhere: waiters, secretaries, office support staff, temps, and substitute teachers; in fact some even work as actors.
But some have differentiated themselves and are no longer in the same, well, solar system, they are "stars."
How different in this regard are most hospital-based physician group members from actors? Most are stuck, at least in their minds, in the commodity world.
But if stars don't have to respond to the acting equivalent of RFPs, casting calls and auditions, why don't you create an experience monopoly practice and do the same?
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| | | Listen to the podcast here, or just keep reading for the transcript.
I see two very common problems with medical groups.
They move too slow, and they do what everyone else does.
In this market, a still-sick economy, the push towards ACOs and other so-called alignment as well as the other ills of the ACA, many groups are pushing towards becoming large.
But large makes them fragile, prone to eventual failure – they just don’t realize it.
Instead you want to develop speed. Speed in making decisions, in setting strategy and adjusting strategy and speed in implementing tactics.
Too much of a hassle? Just want to treat patients? Then just close up your practice and go get a job.
Look, the end game is going to be won through speed and innovation, not through size.
Sure, almost everyone else is going to say you’re wrong, that it’s not what everyone else is doing. But that’s why they are average. They are doing what everyone else is doing.
You need to take a hammer to average.
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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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