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| Dear Friend,
One big False Claims Act settlement involving, among other claims, surgeon ownership of an anesthesia "company."
In a startling update to the disclosure made last year by Tenet Healthcare Corporation, as covered in my post Tenet to Pay $66-Plus Million to Settle FCA Suit Involving Company Model of Anesthesia Services, last week, the United States Department of Justice announced the conclusion of a settlement agreement with Tenet’s USPI entities Oklahoma Center for Orthopaedic and Multi-Specialty Surgery (OCOM), a specialty hospital in Oklahoma City, Oklahoma, its part-owner and management company, USP OKC, Inc., and USP OKC Manager, Inc. (collectively USP), as well as medical group Southwest Orthopaedic Specialists, PLLC (SOS), and two SOS physicians.
Collectively the Tenet controlled entities will pay $60.86 million to the United States, $5 million to the State of Oklahoma, and $206,000 to the State of Texas.
SOS and two of its physicians, Anthony L. Cruse, D.O. and R.J. Langerman, Jr., D.O., will pay $5.7 million to the United States, and $495,619 to the State of Oklahoma.
The whistleblower lawsuit, entitled U.S. ex rel. Wayne Allison, etc., et al. v. Southwest Orthopaedic Specialists, PLLC, et al., centers around, among other serious allegations, the claim that the Tenet entities, the medical practice, and the surgeons participated in a so-called “company model of anesthesia services” scheme. That’s an arrangement in which, roughly speaking, the surgeons working at a facility, usually owners of the facility, and perhaps the facility itself, own the entity providing anesthesia services.
Specifically, the lawsuit alleges that SOS and other defendants, entered into an anesthesia company scheme under which they formed and operated an entity called Anesthesia Partners of Oklahoma, LLC, to which OCOM granted the exclusive anesthesia contract. The complaint alleges that, as a result, anesthesia company profits were distributed to those owners in a manner directly related to the volume and value of referrals by the SOS surgeons.
These allegations are of additional interest because they’re not along the traditional line of company model scheme attack. The common attack involves an allegation that there’s an inherent, forced kickback in the relationship between the surgeon or facility-controlled anesthesia company and the anesthesiologists and/or CRNAs it employs or engages.
As the U.S. Department of Justice put it, the settlement resolves allegations that between 2006 and 2018, OCOM and USP provided improper remuneration to SOS and certain of its physicians in exchange for patient referrals to OCOM in the form of (i) free or below-fair market value office space, employees, and supplies, (ii) compensation in excess of fair market value for the services provided by SOS and certain of its physicians, (iii) equity buyback provisions and payments for certain SOS physicians that exceeded fair market value, and (iv) preferential investment opportunities in connection with the provision of anesthesia services at OCOM.
The lawsuit states that Tenet, through USPI and other subsidiaries, owns 22 companies holding interests in anesthesia companies, claimed to be set up via a boilerplate “kit” of documents supplied by the Tenet-related entity.
It must be stressed that the allegations in the complaint were settled, not admitted to, by the paying defendants. However, $72.3 million is no small chunk of change.
A similar amount could destroy many facilities, including nearly any ASC, that directly, or through their control physicians, sponsors similar anesthesia company deals.
Here are some additional takeaways for you:
1. Just because a large entity, for example, a hospital or a surgery center management company, tells you that a deal’s been vetted by their lawyers and is “legal,” don’t bet on it. Vet it through your own counsel and assess your own risk. As in carpentry, measure (assess) twice, cut (do the deal) once. Or not do the deal – you get the idea.
2. I’ve written, many times before (see, for example, How to Build a Whistleblower and Hospital Chain Paying More Than a Quarter Billion Dollars to Resolve False Billing and Kickback Allegations), false claims act lawsuits often arise from an insider. In the instant case, the relator, Mr. Allison, was the administrator of SOS, the surgical practice, that is, until he was fired. His reward for bringing the whistleblower suit is yet to be determined but will likely be between 10% and 25% of the $72.3 million.
3. Last, and quite interesting, is the fact that there are at least several anesthesia companies, some working nationally, and some surgery center management companies, that appear to engage in “cookie cutter” anesthesia company arrangements as a part of their overall business plan. Each of those arrangements is clearly now a target for false claims act action, likely via claims brought by insiders such as administrative personnel or anesthesia providers, or outsiders, such as billing service employees. Only time will tell what transpires. |
| | | Business Life in the Time of Coronavirus Mini-Series
The coronavirus crisis caused a short term economic crisis for many medical groups. Our mini-series shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
[If you haven't already seen them, follow this link to watch our entire series.] |
| | Tuesday - Why Medical Group Leaders Must Know This Opportunistic Strategy
Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript: |
| I want to talk with you today about an opportunistic strategy, one every medical group leader should know about. You should know about it so (1) you can use it and (2) so that it’s not used against you, which is probably more likely.
There was a story in the healthcare press a few weeks ago about a hospital, I believe in Colorado, that brought in a contracted orthopedic group to take over what I would describe as a hospital-sponsored orthopedic clinic.
More recently, a second article on the takeover feigned surprise (maybe crocodile tears) over the fact that the group that was coming in had not extended job offers to all of the physicians associated with the group that is on its way out. Oh my gosh – shocking!
Well, it’s not shocking at all. Why should they offer all them jobs? (And, also, query whether not offering some of them jobs sends a message to the "old group" members who are remaining on staff about who is now in control.)
Sorry, it’s a tough world out there – but that’s the world we live in.
So the opportunistic strategy message here is the fact that this group coming in, in essence acquired another group without paying a dime. They didn’t pay for their contract. They didn’t buy (nor did they get) any accounts receivable. But what they did was basically "buy" a new service location for free.
How did they "buy" it? They convinced the hospital that they were better-suited to run the program at the facility. So what does the hospital do for them? It in essence turns over the goodwill, the contract rights, however you want to describe it, of the existing group to the new group.
Now for most medical group leaders out there, this lesson is important because they won’t be thinking about being opportunistic themselves, about expanding beyond their current location, the current facility where they’re based. So the lesson for them is to become aware of the potential of being completely displaced.
For the minority of you out there, medical group leaders who are willing to take strategic, opportunistic moves to grow your practice, there are tremendous opportunities. Deals are completely on the table. Grab them.
Either way, this is a very valuable lesson.
You can also learn more about this by visiting our website at weisspc.com where you'll find an on-demand webinar on how you can take advantage of opportunistic strategies.
Check it out, attend that on-demand webinar, and prepare yourself to become opportunistic – or to become the victim of those who are.
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| | How to Deploy the Secret Sauce of Opportunistic Strategy
Webinar On Demand
They say that COVID-19 has changed the world, creating the "new normal." Many of your colleagues and many hospital administrators are running scared.
Others, leaders like you, know that crisis means opportunity.
Let me provide you with the strategic tools and insights that you need in order to seize opportunities, whether they’re in the context of your current business relationships, the expansion of your business activities, or the creation of new ventures.
You will learn:
•Defense as a defective default: It’s necessary, but not sufficient.
•Exploiting weakness: Drop the guilt and identify opportunity.
•Flat line negotiation is fatal: Understand its myths and limitations.
•Negotiation reality: Learn to identify and deploy on multiple planes to affect the outcome.
•Maneuver: Harness the power of maneuver, both in overall strategy and in specific negotiation strategy.
Others see a crisis and freeze in fear. Learn how to see the opportunities and obtain the tools to increase your odds of obtaining them.
The price to attend is $479. The cost of not attending is astronomical. |
| | | Wednesday - What You Must Know About Opportunities, Euphemisms, and Power: Group "Buys" Competitors for Nothing
Watch the video here, or just keep reading below for a slightly polished transcript:
If you participated in the live or on-demand version of the How to Deploy the Secret Sauce of Opportunistic Strategy webinar, which is a prerequisite to participation in the Strategy Working Group Program, then nothing I'm going to describe below will shock you. In fact, it will make you smile. (If you haven't done that initial work, you can start by accessing the on-demand webinar here.)
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The five orthopedic surgeons who dissolved their private practice in 2016 to become employees of Aspen Valley Hospital (“AVH”) are out of jobs, maybe permanently, in their little slice of what was a mountain paradise.
The majority of the seven surgeons from the current outside ortho group practicing at AVH, OrthoAspen, will soon be in the same avalanche, at least as to practice at the AVH location.
And The Steadman Clinic will have taken a giant opportunistic leap forward.
It appears that Steadman executed on one of the strategies explored in the How to Deploy the Secret Sauce of Opportunistic Strategy webinar and to be minutely dissected in the Working Group program: “buying” a practice without paying a cent.
The public reaction (for example, see this article in the Aspen Times) is one of shock. Why wouldn't Steadman simply hire all of the currently AVH-based orthopedic surgeons? The public, and I'd guess the soon to be unemployed OrthoAspen surgeons, apparently misunderstood what the word “partnership” means in the healthcare deal context.
Earlier this year, AVH’s CEO was reported to have said that AVH thought it wise for Steadman and OrthoAspen to be strategic partners instead of operating as separate entities.
But in the real world context of opportunistic action, “partnership” is a euphemism for “acquired” or "controlled." As in, "sure, we're your partner, but you work for us, I mean, if we let you work for us."
Steadman understood this. AVH understood this. One can only wonder what OrthoAspen thought.
Apparently, no one consulted the hospital employed doctors because, well, no one had to.
[To become an inner Steadman (and not an inner OrthoApen), start by accessing the on-demand webinar here.] |
| | Thursday - Maneuvering Your Way Out of Crises, Coronavirus and Otherwise |
| Listen to the podcast here, or just keep reading for the transcript.
Don't think about how hard it is to turn a large ship.
You're the pilot of a jet fighter, moving forward in a straight line significantly faster than the speed of sound. But, in aerial combat, how quickly and how sharply could you turn?
The ability to do just that, to maneuver, is certainly a function of the pilot's training and experience. But unless the aircraft was designed for high maneuverability, as opposed to simply for forward speed, even the best training and the best experience would not be enough to guaranty an advantage.
The late Air Force Col. John Boyd was instrumental in advocating that jet fighters be made maneuverable. At the time, the thinking was that maneuverability was outdated; in favor was a design (eventually the F-15) for a plane that was near twice as fast but also much heavier and, as a result, far less maneuverable.
Over time, Boyd's thinking prevailed and became an important element in future fighter plane design, even if not completely implemented.
The underlying rationale is equally applicable to you as a medical group leader.
Boyd wasn't a technician, an aeronautical engineer. He was a strategist, considered by many to be the second greatest military strategist to have lived, right behind Sun Tzu, the author of The Art of War.
Maneuverability was key to Boyd's strategic thinking, represented most famously by his concept of the OODA loop.
In simplified form, the loop consists of observing, orienting, deciding and acting. (The OODA loop is actually much more complex with various internal feedback mechanisms). The point, however, is that the competitor who can cycle faster through the loop gains a tremendous strategic advantage over its opponent.
The concept is used, well, should be used, in all negotiations and it's certainly used in connection with litigation, at least by those who understand the concept and the tremendous advantage it provides. Let the other guy fly by the seat of his pants and you can beat the pants off of him.
Similarly, unless your business in general is set up to take advantage of faster cycling through the loop, it's a prisoner of its current direction. That necessitates that decisions, quick decisions, be made by one or a very small number of leaders - there's no time to take a vote or seek a consensus.
As we come out of the economic crisis resulting from the pandemic, use the opportunity to redesign your group to take advantage of OODA loop thinking.
Don't, by lethargy, dismissiveness, or delusion, be a jet fighter limited to using speed to combat an enemy, a dragster trying to navigate a Formula 1 course, or, dare I say it, a large cruise ship attempting to avoid an iceberg.
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| | | Calibrate Your Compass
Read our exclusive RedPaper to guide you through this evolving situation.
The coronavirus crisis caused a short term economic crisis for many medical groups. Our RedPaper shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
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| | Help Us Help You With Helpful Content
What tailored content would you most like to see during this time? How can we focus on solutions to your most pressing strategic concerns?
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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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