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| Dear Friend,
Just like "measure twice, cut once", you need to vet any deal, even one to which you're recruited by a nationally known company, at least twice.
If what the government alleged were true, it would be an emergency physician’s dream job: billing for services without ever treating or even speaking with the patient.
What could go wrong?
Jackson & Coker LocumTenens, LLC (“Jackson Coker”) is a large healthcare staffing company. Between April and September 2021, Jackson Coker placed Edward William Salko, D.O. (“Salko”), an emergency medicine physician by training, to provide contracted telemedicine services for a company known as Nationwide Health Advocates (“Nationwide”), owed by David Santana (“Santana”).
According to Santana’s guilty plea in a related criminal prosecution, he, through Nationwide and another entity, entered into arrangements with telemarketing companies to develop leads by targeting Medicare beneficiaries. The telemarketers then paid Nationwide on a per-order basis to generate orders for DME and genetic lab tests for those beneficiaries.
To arrange for the orders to be signed, Santana and Nationwide worked with medical staffing companies to find doctors and nurses who were willing to review and sign prepopulated orders, typically without any contact with the beneficiaries. The records falsely portrayed the medical providers as having performed a legitimate examination of the beneficiary. The signed orders were then sent to the telemarketing companies which sold the orders to DME suppliers and laboratories to be used to submit claims to Medicare for DME and genetic testing that were medically unnecessary, based on false documentation, and tainted by kickbacks.
Which takes us to the allegations against Salko and Jackson Coker.
The government alleged that Jackson Coker placed Salko as one of the physicians to whom Nationwide sent physician orders and supporting documentation and that Salko electronically signed the orders, despite the fact that he was not treating, and never spoke with, any of the beneficiaries for whom he placed the orders. The orders were then billed to Medicare, with Nationwide paying Jackson Coker, and Jackson Coker paying Salko on a per order basis. Specifically, Jackson Coker charged Nationwide a daily $45 administrative service fee plus $35 for each order reviewed and approved by Salko, and Jackson Coker paid Salko $15 for each order reviewed and approved by him.
On March 15, 2024, the U.S. Attorney for the Eastern District of Washington announced that Salko and Jackson Coker agreed to pay $700,000 to resolve the kickback/no medical necessity scheme allegations against them.
Note that those allegations were civil, not criminal, in nature, and that although Salko and Jackson Coker admitted underlying facts, the settlement was made without them admitting any liability.
Some Takeaways For You
- Kickback deals almost always come with discernable red flags. Be on the lookout for them, even if your participation begins by way of an introduction from an otherwise reliable source. Being asked to sign prepopulated physician orders for patients you’ve never treated, spoken with, or seen, and then being paid on a per-order basis, count as burning-hot-as-a-dwarf-star red flags.
- Just because your introduction to the “arrangement” comes via a well-known or even trusted source doesn’t obviate your own responsibility to vet the situation.
- With physician shortages in many specialties opening up lucrative opportunities for locums work, temporary staffing is undergoing a boom. The twist is that sometimes it can be a bust. Be a locums if you wish, just don’t do something loco.
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| | Wednesday - OIG Permits Deferred Payment Physician Partner Buyout - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Picture a revolving door. Even though many physicians and facility administrators don’t realize it, a revolving door can be a useful analogy for anti-kickback analysis. Or, I suppose, just for kickbacks. You see, although most understand the implications of the federal anti-kickback statute (“AKS”) to a physician’s obtaining an interest in a healthcare facility or other entity to which he or she refers, payments to the physician in connection with his or her departure might also implicate the AKS. As a quick refresher, the AKS prohibits the offer of, demand for, payment of, or acceptance of any remuneration for referrals of federally funded healthcare program patients, such as Medicare or Medicaid patients. There are exceptions, most notably regulatory “safe harbors,” that describe certain arrangements not subject to the AKS because they are unlikely to result in fraud or abuse. In early January 2024, the Department of Health and Human Services Office of Inspector General (“OIG”), the agency charged with regulating and enforcing AKS, released a December 2023 advisory opinion (Adv. Op. 23-12) addressing an instance in which retiring physician partners in a multi-hospital venture could elect into an arrangement by which their ownership interest would be redeemed in a series of three annual payments, set at fair market value at the time of each payment, which value would likely increase between the election and each subsequent years’ valuation. The potential kickback twist: The electing physician partner would continue to practice and refer to the hospitals for 6 months following the first payment of redemption money. An increase in the value or number of the physician’s referrals could impact the amount of the subsequent valuation/payment he or she will receive over the remaining buyout term. Based on two factors, the OIG determined that although the proposed arrangement would generate prohibited remuneration under the AKS if the requisite intent were present, it would not impose sanctions. The two factors are as follows: - The offer is being extended to all physicians upon attaining a certain age, in this case, 67. It is not conditioned on, or a reward for, the physician making referrals to or generating business for the hospitals or related entities and individuals. That reduces the risk of overutilization and of steering of patients.
- In order to qualify for the offer, the physician must agree not to refer patients to the hospitals or to its owners (a medical center entity and other physician partners) upon: (i) the physician partner’s retirement date (which would occur within 6 months of the first payment); or (ii) the date the physician partner no longer meets the requirements of the partnership agreement, whichever comes first. The OIG stated, “[i]t is true that the [p]hysician [p]artners who accept the [offer] may continue to refer patients to the [hospitals and other physician partners] for the 6-month period between the first payment under the [agreement] and retirement. However, because the period between the first payment under the [agreement] and retirement is time-limited and, as Requestor certified, is necessary to allow the [p]hysician [p]artners who accept the Redemption Offer to wind down their medical practices consistent with state law requirements, it is unlikely that the Arrangement would cause the retiring [p]hysician [p]artners to alter their referral patterns to benefit the [hospitals and other physician partners] during this 6-month period.”
The Essential Takeaways for You
- Although an Advisory Opinion is binding only on its Requestor, it’s a window into the thinking of the regulators.
- Payments to a referral source require analysis under the AKS.
- Here, the physician partners were making referrals, and receiving remuneration not in direct proportion to their ownership interests, which payments would increase based on the value and volume of their referrals – all red flags and outside of any safe harbor.
- Just because a flag is red doesn’t mean that the underlying arrangement violates the AKS, but there’s a significant chance that it does.
- Each situation must be analyzed carefully because the AKS is a criminal statute, the violation of which can lead to fines, civil penalties, whistleblower lawsuits, exclusion as a provider, and imprisonment.
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| | | Listen to the podcast here, or just keep reading for the transcript.
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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| | | | 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.
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