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Reverse Engineering of AKS Safe Harbor Will Cost a Surgeon His Freedom |
| I swear I can't remember where I saw it, but over the last few days there was something online about a genius working in some stall in some foreign marketplace who’s said to be able to recreate any fragrance.
Perhaps reverse engineered perfume smells great. On the other hand, reverse engineering oneself into a federal Anti-Kickback Statute safe harbor can really stink. At the risk of mixing metaphors, if it sounds like a duck and walks like a duck, it might not actually be a duck, although what it is might rhyme.
Just ask Jason Montone, DO, a Missouri orthopedic surgeon and John Balzer, a medical device distributor, how things are quacking. In August 2021, they agreed to plead guilty in connection with a kickback scheme facially reverse engineered to appear as a legitimate consulting arrangement of the type protected by the AKS safe harbor for personal services contracts.
Specifically, Dr. Montone will plead guilty to one count of conspiracy to violate the Anti-Kickback statute and one count of obstruction, and Mr. Balzer will plead guilty to one count of conspiracy to violate the Anti-Kickback statute and one count of witness tampering.
The charges brought against Montone and Balzer, and other alleged co-conspirators, related to claims that a medical device company and its CEO and CFO paid Montone a total of $379,000 pursuant to a sham consulting program under which the surgeon received $500 to $750 per hour for supposedly performing consulting services.
The government alleged that although the medical device company’s physician-consulting program was purportedly directed at gathering technical feedback about its products from surgeons, the company and its CEO and CFO used the program, and the kickbacks they paid pursuant to that program, to induce and reward Montone’s decision to use the company’s products.
Purportedly, the medical device company tracked Montone’s use of the company’s products and used that information to determine how much the company would pay Montone for “consulting”, regardless of how much true consulting was actually performed.
In exchange for the payments he received, Montone used over $4.5 million of the company’s products in his surgeries, including on patients who were Medicare or Medicaid beneficiaries, often in Balzer’s presence or at his prompting, including excessive amounts of certain of the company’s products. The medical device company agreed to pay Balzer a 25% commission on all of the medical device company’s products that Montone used in his spine surgeries.
Sentencing hasn’t been scheduled. But note well that the government alleged the participation of other conspirators while only Montone and Balzer have entered into plea deals. Has their sentencing been delayed while the two cooperate as witnesses against the others? It’s likely, though not known.
But combine that thought with the following:
The charge of witness tampering provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross loss to the victims and restitution. The charges of conspiracy to violate the Anti-Kickback Statute and obstruction of a criminal health care fraud investigation each provide for a sentence of up to five years in prison, three years of supervised release, a fine of $250,000 or twice the gross loss to the victims, and restitution.
However, Dr. Montone and Mr. Balzer are lucky ducks: According to the U.S. Attorney’s office, per the plea deals, they will recommend sentences at the low end of the sentencing guides, one year of supervised release, plus, as to Montone, forfeiture of $379,000 – the amount that he received in sham consulting fees from the medical device company, and, as to Balzer, forfeiture of $1,264,501 – the amount that he received in commissions from the medical device company for products Montone used in his spine surgeries.
Kickbacks are kickbacks, no matter how much you make them look like legitimate payments pursuant to a safe harbor.
Before you do some consulting, consult with someone who can advise you of the risk inherent in what you’re about to actually do.
Otherwise, you might not end up a lucky duck like Montone and Balzer; you might just be ducked.
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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.
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• Defense as a defective default: It’s necessary, but not sufficient.
• Exploiting weakness: Drop the guilt and identify opportunity.
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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.
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| | | Newsflash: Business Life In the Time of Coronavirus - The Way Out
The coronavsaaairus crisis, especially as it has become politicized, raises a number of business issues and, quite frankly, business opportunities in regard to future disruptive events.
Check out our mini-series, with actionable business lessons for medical group leaders.
Sooner or later this crisis will end. You can’t allow yourself to be too busy, too occupied,
too concerned with current events, to devote time and effort to strategizing for your future.
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| | Learn more about a CMS advisory opinion issued in June 2021 providing guidance that a parent-subsidiary medical practice entity structure in which the subsidiaries themselves don’t qualify as “group practices” under Stark can, in total, qualify as a “group”.
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| | | | All Things Personal
I was heading to the airport in Charlotte, driving in a rental car as Google Maps was driving me crazy. Turn left (no road). U-turn now (cement barrier).
There’s a strong tendency to believe that reality matches maps which is, of course, patently ridiculous. Sometimes roads are under construction (as in Charlotte). The map, the plan is just a representation, not reality. Reality isn’t required to match the map.
We all start with maps, called plans, for our lives. Sometimes we revise those plans, believing that they will revise our lives, professional, personal, or both.
But then, a contract is cancelled, the hospital sends out an RFP, or leadership of the cardiac surgery program is shifted to someone else.
We all need plans. Not as maps from where we are but as maps sketched backward from where we want to be.
Just don’t be too upset when those plans fail you. Tell yourself the truth, assess the reality. Then devise a new plan. But never blame it if it turns out to be wrong; it’s just a plan, not reality, so just revise again.
In Charlotte, I just kept following the actual road.
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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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| | Podcast Compilation Greatest Hits - Strategy Edition 1.0
We've curated our most popular podcasts on strategy into our first compilation album.
Sit back, enjoy, and think about your future.
Listen here. |
| | | | | | 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. 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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