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| Dear Friend,
What if the "rule" that an agreement should always be documented in a single contract is wrong?
There are many reasons why contracts are usually contracted -- made compact, that is -- by having them contained within one fully integrated document. The primary reason is that the "whole agreement" can be found in one place, leaving less ambiguity (one hopes!) about what the parties intended their deal to be. That way, it's easier to enforce that deal, or so the story goes.
But just because that's the general rule does not make that rule the best way to approach contracting in every instance.
In some cases, it makes more sense to accept more risk in terms of how a judge might see the "deal" in return for binding the other party to a set of terms that would never be possible, from a negotiating standpoint, if the entire arrangement were reflected in one document. In other cases, a multi-document agreement achieves what one document can never do: It becomes both stronger and more flexible.
In those instances, no matter how much more likely it would be that a single document would be enforced, it would not, by definition, contain the complete deal that you seek.
Breaking things up is sometimes the best way to make sure that they're whole.
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| | | Tuesday - What Do You Know? Scienter and the False Claims Act - Success in Motion
Watch the video here, or just keep reading below for a slightly polished transcript:
Let's talk about the False Claims Act.
In particular, what the elements of a violation are and importantly the knowledge bit of it.
The elements are simple. You’ve got to submit a false claim, but you’ve got to do it knowingly. That’s called scienter – what your intent is.
We could think about false claims in a couple of easy ways:
One is the kind where, for example, a pharmacy (as in this particular case we’ll talk about today) submits 20 claims for reimbursement when they know that there were only five actual claims, so there’s 15 fake ones. That’s clearly something that qualifies as knowledge that the claims were false; they’re absolutely imaginary claims.
But what about a category in which it's much harder to discern whether they're false?
A recent U.S. Supreme Court case involving two market chains that operate in-store pharmacies, SuperValue and Safeway, illustrates the issue.
Medicare reimburses pharmacies for a claim up to a limit: their usual and customary charge to customers. When a pharmacy files a claim, it has to declare their usual and customary charge.
In the case before the Court, whistleblowers argued that the actual usual and customary wasn’t what the pharmacies reported. The argument was that so many customers were given such deep discounts, that actual "usual and customary" was a lower amount than their regular, "usual" amount, i.e., the amount that was reported.
Does that make every single one of the impacted claims false or does there have to be a higher standard as to what constitutes a false claim?
The Supreme Court found that simply knowing that the reported "usual and customary" might not be correct made the claims all false claims.
In other words, they didn’t have to absolutely know that they were submitting a claim that was fake. They just had to know that there was evidence that underlies the ability to submit that claim that wasn’t correct. That triggered the knowledge element, the "knowingly file" element, the required scienter – the what’s going on in their head element - that made the claim false.
The import of this for you (because you’re probably not running a pharmacy – although a couple of you are) is that you have to be aware that it becomes easier for False Claims Act whistleblowers to state sufficient facts to get past summary judgment. That then increases the likelihood that a False Claims Act complaint will have enough teeth to pull a settlement offer from the target defendant.
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| | Wednesday - Don't You Know That You're Working At St. YouTube Memorial Hospital? - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
YouTube and the other social platforms are a lot like hospitals. Third parties, so-called "content creators", produce the content without any charge to the platform, and then deliver it to their audience for the creators’ ultimate benefit, whether the benefit is measured in a share of ad revenue, through driving viewers to the creators' off-platform sales funnel, or just popularity.
At the same time, because the platform is YouTube or Facebook or another such business, it can decide in the blink of an eye that it no longer wants your content, or that they no longer want the content from you, but, rather, from someone else, perhaps from someone under their control.
This is nearly analogous to the fact that independent physicians, whether hospital-based or office-based, deliver their services, services rendered for their own financial benefit, at a platform known as a hospital. Yes, there are some distinctions and it’s not an exact analogy, but it's certainly close enough.
How different is so called de-platforming or demonetization or cancellation in the social media context from de-platforming or demonetization or cancellation in the context of a hospital pulling the rug out from under an anesthesia group with an exclusive contract, or even from a group of heart surgeons who've been based out of a building on the hospital's campus for 17 years? There is none.
Because neither social media platforms nor hospitals are utilities which must serve all in the manner of common carriers, like railroads, which must carry all freight, social media creators, including those chiropractors selling vitamins on YouTube, and medical groups doing business via a hospital's platform, must have other avenues to deliver their “product“ in the event of cancellation.
YouTube cancelling Dr. X about something she said is equivalent to a hospital cancelling you because of something you said or did or didn't do or won't do for less.
Think about it.
The solution is the same.
Just like any chiropractor selling liver cleanses on YouTube knows that he needs to also be on multiple other platforms to hedge his risk, you should know that you've got to have multiple platforms, i.e., facilities, at which to provide your services in order to hedge your risk.
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| | | Listen to the podcast here, or just keep reading for the transcript.
Love might be blind, but whistleblowers aren't.
That’s one of the two takeaways from a kickback allegation settlement announced March 22, 2023, by the U.S. Department of Justice.
The second takeaway should already be well known to you: The federal Anti‑Kickback Statute (“AKS”) prohibits soliciting or receiving anything of value in return for the referral of items or services covered by federal health care programs.
Pursuant to the announcement, neurosurgeon Dr. Sonjay Fonn and his fiancée, Ms. Deborah Seeger of Cape Girardeau, Missouri, and their professional companies, Midwest Neurosurgeons, LLC and DS Medical, LLC, agreed to pay the U.S. Government $825,000 to resolve a lawsuit alleging that they violated the False Claims Act by soliciting and receiving kickbacks from spinal implant companies.
The underlying False Claims Act case was originally filed by whistleblower physicians, Dr. Terry Cleaver, Dr. Kyle Colle, Dr. Scott Gibbs, Dr. Paul Tolentino, and Dr. Kevin Vaught, together with Paul Cairns and Certified Surgical Assistant Daniel Henson.
Although the original Complaint included a number of other alleged improper acts supporting FCA liability, the settlement was made in reference to the Complaint’s allegations that Dr. Fonn, Ms. Seeger, Midwest Neurosurgeons, and DS Medical solicited and received remuneration from spinal implant companies in return for arranging for the use of those companies’ products in Dr. Fonn’s surgeries, in violation of the Anti-Kickback Statute.
Violation of the AKS is one of the underlying routes to violation of the False Claims Act.
Specifically, it was alleged that Ms. Seeger’s entity DS Medical acted as the exclusive provider of various medical devices to Dr. Fonn’s practices for use in Dr. Fonn’s spinal surgeries. It was alleged that in connection with commercially insured cases, that allowed the defendants to capture profit between the manufactures’ price and the marked-up price obtained from the commercial insurers paying for the cases, and that in connection with Medicare and Medicaid patients, the defendants captured profits from reselling the devices to the hospitals which in turn billed government programs.
Note that as in connection with any such settlement, the claims settled were allegations only and there was no determination, or admission, of liability.
The physician whistleblowers practice together in Cape Girardeau at the Brain and NeuroSpine Clinic of Missouri, LLC and saw prior patients of Dr. Fonn. Mr. Henson, the Certified Surgical Assistant, was employed by Dr. Fonn for approximately 3 years.
As of the date of the Department of Justice’s announcement, the share to be paid to the whistleblowers had not yet been determined.
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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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