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| Dear Friend,
Another surgeon just settled up big time after False Claims Act and underlying kickback allegations.
Last week, the U.S. Department of Justice announced that South Dakota neurosurgeon, Wilson Asfora, M.D., and two medical device distributorships that he owns, Medical Designs LLC, and Sicage LLC, agreed to pay $4.4 million to resolve False Claims Act allegations relating to illegal payments to Asfora from Medtronic USA, Inc. and others to induce the use of medical devices in violation of the Anti-Kickback Statute and other allegations.
As you may recall, last November we featured a post, Medtronic Pays $9.21 Million Tip (Settlement) For Meals at Surgeon’s Restaurant telling the related story of Medtronic’s alleged involvement.
According to the U.S. Government’s allegations, Medtronic agreed to Dr. Asfora’s requests to pay for over 100 social events, including scores of expensive meals, at Carnaval Brazilian Grill, a restaurant Medtronic knew Dr. Asfora owned. The Government alleged that the sponsored events were social gatherings for which Dr. Asfora selected and invited his social acquaintances, business partners, favored colleagues, and potential and existing referral sources, with Medtronic picking up the tab.
Why? Well, the story as told by the Government is a familiar one: They allege that the events were payments to benefit Dr. Asfora and induce him to use Medtronic’s SynchroMed II intrathecal infusion pumps.
Whether or not Medtronic liked the food is anyone’s guess, but in October 2020, they paid the U.S. Government $8.1 million to resolve Antikickback Statute allegations that the “social events” were kickbacks to Dr. Asfora. Medtronic paid an additional $1.11 million to resolve allegations that it violated the Open Payments Program by failing to accurately report payments it made to the neurosurgeon.
And now, the Government’s skewered Dr. Asfora, extracting $4.4 million to resolve False Claims Act allegations relating to illegal payments to him from Medtronic USA, Inc. and others. In addition, Dr. Asfora’s two companies, Medical Designs and Sicage, agreed to pay $100,000 in penalties to settle allegations that they violated the Open Payments Program by failing to report to the Centers for Medicare & Medicaid Services (CMS) Asfora’s ownership interests and payments made to Asfora.
But wait, there’s more: In addition to the settlement and penalties, Dr. Asfora, Medical Designs, and Sicage have each agreed to be excluded from participation in federal healthcare programs for a period of six years.
As is always the case in connection with settlements mentioned above in this post, the claims resolved are allegations only, and there has been no determination of liability.
As you know, the federal Anti-Kickback Statute prohibits directly or indirectly offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, TRICARE, and other federal healthcare programs.
CMS’ Open Payments Program requires that device manufacturers such as Medtronic and distributors such as Medical Designs, and Sicage report their financial relationships with healthcare providers.
Over the years, I’ve seen “disguised” AKS violations in all shapes and sizes, from demands for free services and free personnel to the payment of “rent” for storage cabinets to payments for speeches that lasted a few moments, if that.
Are others so “disguised” that they haven’t been discovered? I’m sure that’s the case.
But when they are discovered, there’s hell to pay: violation of the AKS is a crime. People are in jail, right now, for violating it. In addition, violation of the AKS serves as the grounds for civil action under the False Claims Act, including those cases brought by whistleblowers, to recoup not only the amount of the related, tainted claims for federal health care program reimbursement but also treble damages plus five-figure per claim penalties.
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| | | 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.] |
| | Watch Tuesday's video here, or just keep reading below for a revised transcript:
I’ve got a lesson for you today from Credit Suisse, the very large international bank.
I read a piece in The Wall Street Journal that Credit Suisse's largest shareholders are advocating for the removal of the bank's board. Their move follows a financial scandal, an investment scandal that impacted the bank. But, this isn’t about Credit Suisse, it is about taking that lesson and seeing how you can use it in a medical group.
Any group that’s larger than a physician or two, certainly one with dozens or more owners, has some type of governance structure. Perhaps it’s a strong leader structure, in essence a benevolent dictator who's placed in that position and can’t be removed barring some egregious action. More likely, it's some type of a board, whether you call it a management committee or a board of directors . . . the name doesn’t matter.
What are the rules concerning the leader or leaders' term of office?
Are they institutionalized in place?
How can they be removed?
If they’re not institutionalized in place and they’re elected periodically, how much freedom is actually given to those leaders to lead without fear of being removed? Can they easily be removed?
The problem is when leaders believe they can easily be removed, they begin playing, like politicians, to the crowd; like a member of the U.S. House of Representatives with a two-year-term, they’re always running for re-election.
So, do they take action that’s bold and controversial? Nope, not usually. (It may be controversial to someone on the other side of the aisle, but it’s generally not controversial in terms of the people who elected them.)
You don’t want your leaders to play to the crowd. You want your leaders to be shocked if there is a move to remove them. You want them to know that if they have a three-year-term, that it’s almost a certainty that they will be there for three years, barring an egregious act.
Sure, we can always argue over what constitutes an egregious act. In the Credit Suisse case, maybe there was one, maybe there wasn’t.
What I want you to avoid is a situation in which your leaders become milquetoast – they’re so afraid to make decisions because they might be removed, that they either don't make decisions or make ones that are watered down.
The only tool in their toolbox becomes consensus, which is a cancer, especially in the context of negotiation, because it involves backing down from a strong position to achieve “buy in” from a large group of owners. In the negotiation context, that decision is then taken to the other side and is further negotiated down toward a bad result. You don't want a bad result, do you?
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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.
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•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 –
Why Blindly Copying Rarely Works – Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
It was perhaps the funniest healthcare headline ever: “Zimmer Biomet to combine spine, dental businesses to form a company called NewCo”
If you’re not laughing, a “NewCo” isn’t a business name and it’s certainly not Zimmer Biomet’s new corporate baby. It is a placeholder for a new entity in an organizational structure.
For example, actually, in Zimmer Biomet’s example, the press release issued by the company states their intention to spin off certain business lines into a new and independent publicly-traded company, a NewCo.
You and I might use the same term if we were drawing a chart of the structure of the deal between your entity and Company X that results in the creation of a new entity for which we don’t yet have a name, NewCo.
So how did a well-known healthcare publication, whose name I am withholding only because it seems unseemly to rub it in, run a headline, and an accompanying article, reporting that “NewCo” was to be the actual name of the spinoff entity?
My guess is that it’s a simple matter of copying. The press release says “NewCo”, so the name of the new company must be “NewCo”.
But as much as I’d like to end this post here and simply make it about stupid headlines, that would be shortchanging you. For the truth of the matter is that simply copying gets a lot of medical groups, as well as other business entities, into trouble.
Note that I am not saying that copying alone is the problem; rather, it’s the “simply” part of it.
This plays out in a number of ways.
On the more sophisticated end, if one can call it that, and something that I have written about before. It is when a medical group leader or group of leaders sees that someone else has structured some business model. The example I used in that earlier post was a CIN, a clinically integrated network, and decides they want one, too. But simply knowing, and copying, the acronym, or even the observed model’s exact structure, might not be what you actually want, and might not actually be something that works.
On the more unsophisticated end, it’s the simple coping of a document that you believe works for someone else into one that you believe works for you. For example, the copying of articles of incorporation into those for your medical corporation when later, even decades later, you realize that you formed a lay corporation, not one authorized to conduct the practice of medicine. Or, for example, the relabeling of cousin Bob’s employment agreement into an independent contractor agreement for your radiologists.
There may be nothing new under the sun, and good [artists/poets/composers/you-fill-in-the-blank] copy, but great [artists/poets/composers/you-fill-in-the-blank] steal. However, neither mean to copy or steal blindly, especially when doing so doesn’t advance your goals, doesn’t advance your interests.
Instead, focus on what it is, bottom line, that you want to achieve.
Then, and only then, should we ask the question of what tool or tools . . . the specific structure or even documents . . . can be applied to get you there.
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| | | Listen to the podcast here, or just keep reading for the transcript.
Over the years, I have dealt with many hospital CEOs that I thought were criminals. In fact, I have dealt with some who were indicted, and, in at least one case, a CEO who later became a long-term “guest” in the Gray Bar Hotel.
But one of the best stories was from a 2018 piece in the South Florida Sun-Sentinel about Broward Health, the Florida state-run entity that is one of the nation’s largest health systems, appointing its criminally indicted interim CEO, Beverly Capasso, as its new permanent CEO after a search for a new leader.
t gets even more darkly funny when you take into account the crime for which Ms. Capasso is charged: For allegedly violating, together with two currently-sitting board members, a former board member, and the health system’s general counsel, the state’s open-meetings law in connection with how they handled the investigation and firing of the previous interim CEO!
Yes, I know that we’re supposed to all say, parrot-like, “But she’s innocent until proven guilty!” Sure, but that’s just a rule of law, not a rule of what’s the right move in connection with a health system (a public one, at that) hiring decision. (Or, for that matter, a medical group hiring decision.)
In an era in which compliance with the plethora of laws, rules, and regulations impacting healthcare has become an obsession, what message does Broward Health, or the hospital at which you practice, or your medical group, for that matter, send when its actions contradict its message?
“We expect you to comply with the law and to uphold the highest ethical standards, even if we don’t.”
Or, even worse, “We’re not angels, but if you’re not, your contract is terminated.”
Sure, no one is perfect. But try not to be stupid.
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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 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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