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Dear Friend,
Who'd invest in a fake ASC? You'd be surprised.
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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| | Tuesday - Success in Motion Video: Don’t Shoot The Messenger! Reduce False Claims Act Liability
Watch Tuesday's video here, or just keep reading below for a slightly polished transcript: |
| | I’m sure you’ve heard the expression “Don’t shoot the messenger.” In other words, just because someone is the bearer of bad news doesn’t mean you should take it out on them.
In healthcare, unfortunately, oftentimes medical groups do take it out on the bearer of bad news, the bearer being someone who points out a compliance issue. Perhaps he or she points out that something is being coded incorrectly, or that someone is fudging the description of what they’ve done or the extent of what they’ve done.
Then what happens, far too many times, is that messenger gets killed, well, metaphorically speaking, that is. He or she is terminated. Or, not quite as bad but still problematic, the messenger is left uninformed as to what, if anything, the medical group does to follow up.
What should happen?
The False Claims Act is an 1863 law resulting from the Union army being scammed with moth-eaten blankets and putrid rations. President Lincoln pushed for, and Congress passed, a law imposing a civil penalty on claims for payment in respect of faulty or non-existent products sold to the government. The 1863 law imposed a civil penalty of two times (now, three times) the amount of each false claim. It also put in place qui tam provisions, a concept that dates back to the Middle Ages in which an English king issued a decree that gave whistleblowers half a criminal’s fine.
Today, the False Claims Act also prohibits retaliation against a whistleblower. So, too, do wrongful termination laws and various anti-discrimination laws, all of which one way or another get triggered when the whistleblower is fired or demoted.
What should you do with someone who comes to you with a potential False Claims Act allegation?
1. Listen closely.
2. Follow up and investigate.
3) Although in some instances you may not be able to report directly back to him or her on what was discovered, you can certainly attempt to convince him or her that you took the complaint seriously, that you followed up, and that you’re taking appropriate steps to correct the situation.
4. You certainly never want to terminate, retaliate, or discriminate against someone who lodges a complaint or reports suspected false claims. All you’re going to do is create a formal whistleblower who’s entitled to a very hefty bounty if they end up filing suit. You'll end up spending hundreds of thousands of dollars on a defense, and maybe even millions in a settlement or judgment.
Whatever you do, don’t shoot the messenger.
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| | | Wednesday - Medical Group Minute Video: Another Hospital System Settles Whistleblower Allegations That Outpatients Were “Turned Into” Inpatients
Watch the video here, or just keep reading below for a slightly polished transcript:
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| Alchemists struggled without success for centuries attempting to turn lead into gold.
Will hospitals struggle that long in their quest to turn outpatients into inpatients?
Almost a year ago, in my post, Alchemist Can’t Turn Outpatients Into Inpatients For Less Then $18.3 Million, I wrote about the settlement, by Banner Health, of False Claims Act (a/k/a “whistleblower lawsuit”) allegations that it had submitted improper charges to Medicare, billing short-stay, outpatient services that should have been performed on an outpatient basis as if they were more expensive inpatient services.
Another failed alchemist just settled similar allegations in response to another whistleblower’s claims.
This time, it was Prime Healthcare Services, Inc. (“Prime”), headquartered in Ontario, California, and Prime’s Founder and Chief Executive Officer, Dr. Prem Reddy. On February 14, 2019, the Department of Justice announced that Prime and Dr. Reddy have agreed to pay $1.25 million in settlement (without admitting any wrongdoing) that two Prime hospitals in Pennsylvania, Roxborough Memorial Hospital and Lower Bucks Hospital, knowingly submitted false claims to Medicare by admitting patients to the hospital for overnight stays who required only less costly, outpatient care. Also involved were allegations that the hospitals billed for more expensive patient diagnoses than the patients had.
If you think the $1.25 was getting off cheap, consider that this settlement follows an August 2018 settlement of $65 million by Prime and Dr. Reddy (again without admitting any wrongdoing) of another False Claims Act suit brought by a different whistleblower.
Here are the takeaways for you:
1. Just as lead isn’t gold, outpatients are not inpatients.
2. No matter how large and sophisticated your healthcare organization is, mistakes, whether or not intentional, abound. Some result in improper claims, not just to Medicare, but to other federal health care programs (e.g., TriCare, health services for Peace Corps volunteers, Medicaid, Indian Health Services, and on and on). All are potential reasons for False Claims Act litigation, whether brought directly by the government or by way of whistleblower lawsuits.
3. Most whistleblowers are insiders such as employees of the defendant entity. For example, nurse executives, physicians, facility administrators such as chief financial officers, and so on. In the Banner case, the whistleblower was a registered nurse who had worked for Banner as its corporate director of clinical documentation. In the recent Prime settlement, it was an employee and a former employee of Roxborough Hospital.
Contact me for more information on how your facility or medical group can take action to reduce the risk of whistleblower action or to discuss how your knowledge of improper claims can lead to the filing of a whistleblower action.
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| | Thursday - Podcast: Cooking Time = Negotiating Time |
| Listen to the podcast here, or just keep reading for the transcript
Yesterday, as my wife and I were in the kitchen, she quipped, peering into the oven, that she forgot to set the timer for the final step of the recipe.
I asked what she should have set the timer for, and she said 8 minutes, but that that was just cooking time, not actual time.
Hmm. Was time different inside the oven? Was a minute not a minute?
Okay, I’m not an idiot. I know that “cooking time” just means “estimated time.” Or does it? Think about it for a moment. Is time always the same?
I’m not trying to go all Einstein on you. [Einstein is said to have said, but probably didn’t himself say, in explaining relativity, something to the effect of, “when you sit with a nice girl for two hours you think it’s only a minute, but when you sit on a hot stove for a minute you think it’s two hours. That’s relativity.”]
Or, maybe I am, because “cooking time” as a different sort of time, a distorted time, a malleable time, is a perfect concept for use in negotiation.
Each negotiation has its own timing, not one set by a standard recipe or by a clock on the wall or on the calendar, but one that can be, and should be, set by you.
The object is not to get the deal done quickly, but to get the deal done – meaning on terms acceptable to you. Accomplishing that rarely means quickly and it always means deliberately.
Sometimes it means changing the clock to slow things down or to speed it up. Always it means deciding when to bring up issues, adding ingredients to the deal, if you will.
Other times it means imposing deadlines, real or imagined. Almost always it means ignoring deadlines.
Time in negotiation is not real time.
Instead, it’s a tool in the kitchen drawer of negotiation. A very useful tool.
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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 here.
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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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