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| Dear Friend,
Clear as mud.
Clarity of contract. Or, rather, the lack thereof.
It might be the sign of a schemer (e.g., see any insurance policy).
Or, it might just be the lack of effort intermixed with the failure to appreciate that there’s a chance that something might go wrong.
But because we can’t read minds (well, most of the time; we know what those insurance carriers are up to), it’s a distinction without a difference.
Take, for example, a contract that provides that a fee is owed by you to a placement agency upon your hiring of a candidate. The agreement states that if a candidate departs within sixty days of hiring, the agency will exert efforts to find a replacement.
Sounds nice. But wait. What if you hire “Bob” on February 15 for a position to commence on June 1? There’s a pretty good chance that if Bob discovers that he doesn’t like working for you, it’s going to happen in June or July, well after the sort-of-guarantee has expired. And, even if you clarified the language such that the guarantee period begins upon commencement of services, if Bob leaves a day later, what good is it if the agency’s efforts, even their no-one-could-expect-better efforts, to find a replacement just don’t pan out?
Most people don’t like throwing good money after bad in a contract dispute. Clarifying the deal up front not only avoids the “bad money” problem, it changes the analysis of whether it pays to fight after you’ve been screwed, whether by a schemer or a lazy slug.
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| | | Tuesday - Why Winging It in Contract Negotiations Is for the Birds - Success in Motion
Watch the video here, or just keep reading below for a slightly polished transcript:
Ready, fire, aim.
It might be a good strategy in some context, but not in connection with negotiation of any agreement or contract between a medical group and anyone else. Certainly not with a hospital. Certainly not with a payor.
The situation is totally analogous to that of a professional athlete. Someone who trains and prepares for days, weeks, months, years, for competition before actually performing in the competition.
The homework, the gathering of intelligence and preparation all prepares to a negotiation session, a series of negotiation sessions in regard to a contractual arrangement.
This is especially true when you’re facing off against an opposite, a contracting opposite represented by someone who is a professional negotiator, a hospital administrator for example and certainly anyone who’s working for a large payor like Blue Cross for example.
Winging it only works if you’re a bird.
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| | Wednesday - Rainbows, Unicorns and Fraudulent ASC Deals - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
ASCs can be great investments for physicians. Oh, as long as they are real.
But if all they are are rainbows, unicorns, and clear blue sky, then you’d better stay away.
The problem, of course, is telling the difference.
Some seem to have a hard time doing so.
Late last month, three members of a family, the promoters of a fake surgery center scheme, pleaded guilty for their roles in defrauding investors.
But wait, the story gets better. The three initially settled a civil suit brought by the New Jersey Bureau of Securities that they defrauded 26 investors in an ASC scam. How much money they took is unclear, but the facility itself was never built. The trio agreed to pay $5.5 million to settle, $4 million of which was in investor restitution.
No sooner than the ink dried on the settlement, the family then conned 15 of the same investors out of $3 million in a second scam!
This time, the scamsters were charged criminally and, eventually, pleaded guilty. Two are facing years behind bars and one is to receive probation.
One thing’s for sure, their ASC has a 0% infection rate. Or, maybe it’s 100%. I guess it all depends on what exactly we’re measuring.
Simply warning you to do due diligence in connection with any ASC investment seems trite, but this case, which is humorous only because neither you nor I was one of the conned investors, illustrates why it’s not.
You might say it’s anecdotal, but in my practice I’ve seen multiple forms of ASC scams, from fake surgeries and fake patients, to patients who had surgery but didn’t require it, to surgery center promoters who, as did the defendants in the above scam, used surgery center proceeds to pay for items for their personal use.
The bottom line for you, as an ASC investor, is to carefully investigate the deal, and its promoters, on the way in, and on a periodic basis after the investment is made.
If you don’t, then don’t be surprised that some of the investment is sitting in the promoter’s garage. It’s that red Ferrari F430 Spider parked next to the blue Bentley Continental GTC Speed.
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| | | Listen to the podcast here, or just keep reading for the transcript.
As of the time of the original broadcast, physician, well, former physician, Bernard Greenspan is whiling away his time in federal prison in Butner, NC in connection with the Biodiagnostic Laboratory Services, LLC (“BLS”) scam that, at my last count, resulted in the conviction of 43 defendants, 29 of them of doctors. Greenspan, a family medicine doctor, was convicted of multiple crimes, including violation of the federal Anti-Kickback Statue, in connection with receiving bribes totaling approximately $200,000 from BLS, its employees and associates in return for the referral of blood samples worth approximately $3 million in billings to BLS. Interestingly, and frightening for those physicians, and others, who misunderstand the AKS and its place in the pantheon of prosecutorial weapons, Greenspan received the money from BLS and its affiliates through rental, services, and consulting agreements that were apparently vetted for “compliance” with the AKS’s space rental and personal services safe harbor.After all, Greenspan’s attorney argued that the doctor had entered into legal agreements for rent and services and that there was no evidence that he ever made referrals in exchange for remuneration. So, how could the payments be kickbacks? What You Need To Know
1. Fitting a deal within one of the AKS safe harbors is not, never was, and never will be a guaranty that you are immune from AKS prosecution, because the safe harbors do not protect sham arrangements. Accordingly, Greenspan was indicted and convicted of violating the AKS, also known as 42 U.S. Code § 1320a–7b. Unfortunately, too many deals that facially fit within a safe harbor are “ass backward” arrangements designed to cover up illegal arrangements: Lab owner Joe tells Dr. Sally that he’ll give her a little “taste” if she sends some patients his way. Sally feigns horror, but sees no problem with Joe’s comeback: Joe’s cousin Lou will rent space from Sally for $X pursuant to a lease that meets all of the check-the-box requirements of the space rental safe harbor. That includes the fact that the rent will be within the range of FMV. Sally will send her patients’ blood samples to Joe’s lab. Like the old expression goes, you can put lipstick on a pig, but it’s still a pig. The lease was just the lipstick. The acceptance of $X, even if it is fair market value, was the pig, the crime. 2. Even if compliance with a safe harbor is legit, compliance with it protects you from AKS prosecution only. There are many other laws that prohibit much of the same conduct and to which the AKS safe harbors have absolutely no relevance. For example, in addition to the AKS violation, Dr. Greenspan was also indicted for, and found guilty of, violating: 18 U.S. Code § 371 - Conspiracy to commit offense or to defraud United States: The conspiracy with BLS and its owners and managers to defraud Medicare. 18 U.S. Code § 1343 - Fraud by wire, radio, or television: The Medicare payments sent by interstate bank wire (the electronic payments from the Medicare contractor to BLS’s bank account). 18 U.S. Code § 1952 - Interstate and foreign travel or transportation in aid of racketeering enterprises (the “Travel Act”): Both (a) the payments by the Medicare contractor to BLS’s bank account by bank wire, and (b) the fact that the payments constituted commercial bribery under New Jersey state law, thus triggering violation of this federal law. (See my article Why Your Compliance Efforts May Be Worthless.) 3. I’ve written many times that those you work with are potential witnesses against you. For example, people often turn employees into whistleblowers in respect of civil prosecution for violation of the False Claims Act. As anyone who watches crime story movies or TV shows should know, the same situation, but on steroids, plays out in respect of criminal prosecution: Other participants in the scheme flip on you to reduce their charges or punishment. In the case of Dr. Greenspan, the two brothers at the center of the BLS scheme, the company’s president, David Nicolls, and Scott Nicolls, testified that they entered into a conspiracy with Greenspan to get the blood samples in exchange for kickbacks. What You Must Do
Every new, and every existing, financial relationship with anyone or any entity with which physicians and other healthcare providers do business must be vetted or re-vetted in light of today’s enforcement reality. Immediately. If they’re violative, they must be unwound. As to Dr. Greenspan, at 80 years old, it’s conceivable that he’ll spend the rest of his life behind bars. [Author's note: This podcast was originally broadcast in 2018. Dr. Greenspan died in 2019 according to the Federal Bureau of Prisons' inmate locator.] |
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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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