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Dear Friend,
One thing’s for certain, it will be no more walk in the park for the seven defendants convicted for their roles in a bribe and kickback scheme related to referring patients to Forest Park Hospital, a now defunct chain of Texas facilities.
Well, I suppose those defendants sentenced to time in federal prison will still get a walk in the yard, as in the prison yard, but that’s not even in the same universe.
The Story
Forest Park was a chain of beautifully constructed facilities. However, beneath the veneer of great architecture and beautiful interior design was, so federal prosecutors alleged, a decrepit scheme involving questionable marketing agreements and multiple types of fake arrangements from “consulting contracts” to “leases” and even fake companies.
The alleged aim? Referrals of well-insured patients to the out-of-network facility.
Last week, on April 9, 2019, the jury in the Forest Park bribery and kickback trial in federal court in Dallas found seven of the nine defendants guilty. At issue were multiple charges, from violation of the federal Anti-Kickback Statute to money laundering.
The government contended that Forest Park took in $200 million and paid out $40 million in kickbacks.
Among those indicted were physicians, hospital executives, and alleged intermediaries in the trail of funds.
The following physicians were convicted on April 9:
- Spine surgeon Shawn Henry, D.O.
- Spine surgeon Michael Rimlawi, D.O.
- Pain management physician Mike Shah, M.D.
- Spine surgeon Douglas Won, M.D.
So, too, were Forest Park’s co-administrator Mac Burt, Jackson Jacob, the owner of companies through which Forest Park channeled payments to physicians, and a nurse and workers’ compensation insurance consultant, Iris Forrest.
The Moral
The easiest (and most gratuitous) takeaway is that kickbacks are illegal. But, you already know that, at least in concept. So, in a sense, it’s not very helpful advice.
What’s far more important to note is the need for caution, extreme caution, whenever entering into any sort of financial relationship with someone or some entity with whom you share a referral relationship, no matter which way the referrals flow.
For example, some of the allegations in the Forest Park case centered around the payment of “marketing money” from the facility to physicians. Some naïvely believe that marketing money from a hospital to physicians is not something that should concern significant anti-kickback scrutiny. Wrong.
Additionally, Forest Park shows that even convoluted payments through “money drop” entities, even ones that look like a game of Chutes and Ladders, can be un-woven. And, as a double take away for you, they can be un-woven by other participants in a scheme such as the former Forest Park Chief Operating Officer and a physician/investor/founder who both previously pleaded out and cooperated with the authorities in convicting their fellow schemers.
One can assume that all or nearly all of the now convicted men and women had counsel advise them on the propriety of their arrangements. So, when someone tells you the deal is okay because their attorney vetted it, don’t be so sure. Make sure that the person advising you not only has knowledge, but also a good dose of common sense.
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| | Tuesday - Success in Motion Video: The Best Way To Deal With Disruptive Employees - Rebroadcast
Watch Tuesday's video here, or just keep reading below for a slightly polished transcript: |
| | Do you know the best way to deal with disruptive employees? Don’t hire the jerks to begin with.
Okay, it sounds simplistic, but I bet that if you really think back, you knew that guy or that gal was trouble before you hired him or her.
You say, "I already have the disruptive person working for me!”
Then give them a warning and tell them what they have to do to improve. But if they don’t improve, no second warning, no second chance. Get rid of them.
There’s a saying that a fish rots from the head down. A business rots from the disruptive employee down. Don’t poison the rest of your business. Hire right. And if you made a mistake in hiring and can’t correct it, then fire right. That means fire fast.
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| | | Wednesday - Medical Group Minute Video: Idiocy Of The RFP Process For Professional Services - Rebroadcast
Watch the video here, or just keep reading below for a slightly polished transcript:
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| Some hospital attorneys and, therefore, some hospital administrators, believe that every contract for professional services should be subject to a request for proposal (RFP) process. That’s ridiculous.
First, it assumes that services are commodities. Despite the fact that many believe that they themselves are a commodity, neither they, nor their services are. Not every baseball player on the Dodgers has the same level of skill; neither does every physician within a group or across groups. And, some teams, both in baseball and in medicine, are simply better than others.
Second, it assumes that the words and numbers on the response to the RFP, and the slickness of the production of an oral presentation, are truly determinative of both quality of care and the level of personal interaction that one practice or group provides and the other, or others, never will. Or perhaps it’s only about the money. If so, just say so. But that confuses money with value.
Third, it’s the height of bureaucracy, work for work’s sake, no value added. There is a tremendous cost, in money, in time, in effort, and in emotion, put into an RFP response. Is the RFP just the papering over of an already made decision? Is the RFP just a tool to muscle down the demands of the incumbent provider? Or is it a real search for the best provider at the proper value level run through a process that is itself defective?
When all you’ve got is a hammer, every problem looks like a nail. Here’s to RFPs.
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| | Thursday - Podcast: But Does It Work in the Real World? Second Order Thinking and Perfect Legal Structure. |
| Listen to the podcast here, or just keep reading for the transcript
I recently attended a continuing legal education seminar concerning some very complex organizational structures for healthcare venture development.
Slide after slide flashed on the screen, each looking even more like a dish of spaghetti topped with Froot Loops and Cheez-Its than the one before it.
This entity and that. Physicians here. Investors there. Money flowing this way. Control over here and ownership over there.
From a purely legal standpoint, the models made sense.
However, from the practical standpoint, one apparently lost on the presenter, the structures were unfinanceable.
And, even assuming that the owners could finance the deals completely out of pocket, the structures would likely cause payors either to balk at paying you in the first place, or worse, to pay you now but later wake up to what’s really going on. Then, they’d demand their money back and claim that you defrauded them, or worse.
This is an example of the necessity of second order thinking.
The first order in our example is simply to ask whether the structure works from a legal standpoint. (“Yes, it does, so let’s proceed to document it.”)
The second order is consideration of the impact of your decision made at the initial level. (“Can we finance that type of deal?” “Is the legal structure ‘too cute by half?'”)
The dive goes deeper from there, to the third level (e.g., “What’s the impact of an unfinanceable structure on our relationship with . . . “”) and beyond, bounded only by the time and money you’re willing to invest in the process and the question of whether it makes sense to do so.
How deeply are you thinking?
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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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