How To Expand Your Years Of Active Practice And Profit – Success In Motion

On the one hand, it’s said that many physicians don’t want other physicians to “profit” off of their work. Yet, at the same time, the great majority of physicians leaving training see a career in which they will never become practice owners. Ride along with Mark as he discusses how you, as a physician group owner, can add years to your career and significant profit to your bottom line.

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Mark F. Weiss

Medical Group Mergers: Making 1 + 1 = 3

When I was a kid, there was a new method of teaching math that was heavily marketed to our parents. It was called the “new math.” It was supposed to make it a way for math to be more easily understood by students.

We kids joked that “new math” was going to make 1 plus 1 equal 3.

As funny as we thought that was, in math class 1 plus 1 never made 3. But, despite our teacher’s inability to conceive that it ever could, in the domain of medical group mergers 1 plus 1 can equal 3. In fact, it should or there’s a large chance the deal shouldn’t be done.

Now when I say “merger” I don’t necessarily mean merger in the true legal sense, although it could be. It could be an acquisition. But in general, I’m focusing on the peer-to-peer combination of medical groups as opposed to a deal in which a local medical group is flat out being acquired by a national practice, whether or not financed by outside investors.

And, by 1 plus 1 equalling 3, I mean that when you structure a merger or evaluate a merger partner, you want to avoid a merger that is merely additive, one that takes 1 plus 1 and gives you 2.

The better approach is to bring on a merger partner that takes the 100X that you’re currently doing plus the 100X that they are currently doing, and which, when combined, results in 300X or even more.

Now, of course, I’m not talking simply about gross revenues all of a sudden making some sort of magical, mystical, metaphysical jump.

What I am talking about is the creation of additional value whether it has to do with the fact that it changes the way you can contract, whether it changes the way that payers look at you, whether it brings on skills that are much easier bought than homegrown, or whether it means expanding into a new geographic area in a way that is far less expensive than by organic growth.

To be truly valuable, to be truly powerful, to be truly rewarding, look for that new math.

Look for deals where one plus one actually does equal 3.

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Mark F. Weiss

How to Put Your Finger on The Scale of Patient Satisfaction – Podcast

Patient satisfaction surveys are becoming a real part of reimbursement, driving a significant percentage of money.

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Mark F. Weiss

Far Too “Friendly Physician” Pleads Guilty in $60 Million Healthcare Fraud – Medical Group Minute

What’s your medical license worth? Charles R. Leach, M.D., who practiced for close to four decades, surrendered his. I assume that he’ll soon be surrendering his freedom, too.

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Mark F. Weiss

Hospital Abandons Physician ASC Partners – Success In Motion

Take a seat while Mark discusses a hospital’s announcement that it’s closing down its physician joint venture ASC. Was it really their decision? Or have the physician partners realized that they no longer need the hospital?

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Mark F. Weiss

Not all Money is Green: Don’t Confuse Hospital Loans With Stipends

What does China’s foreign policy have to do with hospital financial support? More than you’d think.

I recently read a news article about China’s efforts to expand its economic and political power into the regions west of its country, in particular into Afghanistan, Pakistan, and India.

As opposed to the model favored by the U.S., in which outright grants of cash, that is, foreign aid, is extended, China is loaning those countries billions of dollars to build infrastructure, but with a twist: the infrastructure is built out using Chinese companies, Chinese materials, and, in many cases, Chinese labor.

Instead of the result that China hoped to achieve, pulling Afghanistan, Pakistan, and India more into their political sway, it turns out that those infrastructure projects are putting those countries into significant debt and causing significant ire. Projects, such as light rail, are running way over budget and will never pay for themselves: The ticket prices that would have to be charged just to break even are way outside the budget of the local population, so usage will have to be subsidized, causing a loss on top of the fact that the countries will have to pay China back.

With many hospitals becoming averse to coverage stipends, some are proposing loans to help contracted groups meet expenses.

But, as Pakistan can tell you, the problem with a loan is that it has to be paid back. From what, is the question.

Take the case of a radiology group at a hospital at which the payor mix isn’t sufficient for you to make a go of it. Simply borrowing the money to meet payroll is solving your short-term problem of retention and recruiting, but exacerbating the long-term one, which is that you’re going to have to pay the hospital back with money that you don’t, and never will, have.

And, it’s highly unlikely that the hospital is just going to forgive the debt.

Don’t get yourself caught up in a mess like Pakistan. If you can’t profitably service a facility or some other practice site, and the problem is systemic and not merely poor temporary cash flow, you can never borrow your way out, not from a bank and not from a hospital.

Loans are not grants like foreign aid. Loans are not coverage stipends. Loans are just debt. Is that what you need?

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Mark F. Weiss

How Walmart’s Latest Healthcare Announcement Can Be Your Key To Higher Prices – Podcast

According to a recent article in the Wall Street Journal, starting now in January 2019, Walmart is requiring employees needing spine surgery to travel to certain contracted hospitals for their surgery.

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Mark F. Weiss

Former Tenet Healthcare Executives Facing Criminal Trial for Kickbacks. – Medical Group Minute

John Holland and William Moore, both former Tenet Healthcare hospital CEOs, are facing trial in a criminal case that alleges that they personally violated the federal Anti-Kickback Statute.

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Mark F. Weiss

Patient Locked In Office: The Lesson For Medical Group Business Success – Success In Motion

Ride along with Mark as he discusses the darkly humorous story of a forgotten patient locked in a physician’s office . . . and what it means for your business planning. 

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Mark F. Weiss

Former Drug Company CEO Pleads Guilty And Will Cooperate In Upcoming Kickback Scam Prosecution

In a turn of events that’s surprising to some but was expected to happen by those well versed in television crime dramas and real life federal prosecutions, former CEO Michael Babich pleaded guilty last week to charges related to the plethora of kickback allegations surrounding Insys Therapeutics, Inc., and its fentanyl drug, Subsys.

Babich, who faces up to 25 years behind bars, pleaded guilty to conspiracy and mail fraud. He’s cooperating with prosecutors and is expected to testify for the government in the upcoming criminal trial of five of his former fellow executives, among whom is the company’s founder and former chairman, John Kapoor. How fully Babich cooperates is likely to be taken into account when he faces sentencing.

I’ve covered the tale of Insys/Subsys kickbacks in multiple installments beginning in early 2017. Here’s a recap:

Couch and Ruan

In February 2017, I wrote in my post Pain Medicine Doctors Alleged to Have Received $115,000 in Kickbacks … Plus $40 Million in Illicit Profit, about the cautionary tale of two Mobile, Alabama pain medicine doctors, Drs. John Couch and Xiulu Ruan, both then in the midst of their federal court trial for, as was then alleged, receiving $115,000 in kickbacks from Insys in connection with Subsys.

Among the allegations:

• That Couch and Ruan prescribed, and also sold through their owned pharmacy, large quantities of Subsys, based on misleading diagnoses, defrauding payors.
• That their profit of $40,000,000 from dispensing Subsys and other controlled substances was an illicit profit from a “pill mill.”
• That they received “speaking fees” from Insys based on the number of Subsys prescriptions they wrote.

Subsequently, Couch and Ruan’s trial moved forward to guilty verdicts and then to sentencing: Crouch was sentenced to prison for 240 months and Ruan received an even stiffer sentence, 252 months behind bars.

Neither of the Mobile, Alabama physicians currently reside in the state: Dr. Couch passes (or, does) time at the Federal Correction Institute in Forrest City, Arkansas, while Dr. Ruan enjoys the view from behind bars at the Federal Correction Institute in Oakdale, Louisiana.

In addition to their lengthy prison sentences, the duo was ordered to make restitution of $6,282,023.00 to Medicare, $3,649,092.97 to Blue Cross/Blue Shield of Alabama, $2,285,170.70 to Tricare, and $1,695,929.00 to United Heath Group.

Fanto, Seth, and Gingerich

In my post dated September 5, 2017, Drugs, Sentencing, and Lock (and Roll on to Another Kickback Prosecution), I wrote about criminal charges brought by the State of Arizona against three pain medicine physicians, Steve Fanto, M.D., Nikesh Seth, M.D., and Sheldon Gingerich, M.D.

The allegations: That the physicians collected sham educational “speaker fees” in exchange for writing prescriptions for Subsys.

The criminal complaint claims that from March 2012 to April 2017, more than $33 million, or 64 percent of Subsys sales in Arizona, came from prescriptions written by Fanto, Seth, and Gingerich.

In additional echoes of the Couch and Ruan prosecution, it was alleged that Drs. Fanto, Nikesh, and Gingerich gave insurers false and misleading information, including that patients had cancer when they did not, to obtain prior authorization for Subsys prescriptions.

Rosenberg Pleads Guilty

In my October 2017 post, Another Physician Guilty of Receiving Insys/Subsys Kickbacks, I wrote about Jerrold Rosenberg, M.D., a Providence, Rhode Island physiatrist, who pleaded guilty to federal charges that he committed healthcare fraud and conspired to receive kickbacks in the form of “speakers fees” from Insys in order to induce him to prescribe Subsys.

In their case against Dr. Rosenberg, the United States Attorney General’s office alleged that between 2012 and 2015, he entered into an illegal scheme to take kickbacks from Insys. Specificially the payments were disguised as speaker’s fees from Insys. The “fees” were then a major factor in Rosenberg’s decision to prescribe Subsys to patients.

In an echo of the charges brought against Drs. Couch and Ruan, it was also alleged that Dr. Rosenberg upped his prescriptions of Subsys by fraudulently representing to insurers that his patients suffered from cancer pain when they did not.

Dr. Rosenberg was sentenced to 51 months in prison. He also agreed to pay $754,736 in restitution to healthcare benefit programs.

The Federal Anti-Kickback Statute and Other Prohibitions

In general terms, the federal Anti-Kickback Statute (“AKS”) prohibits the offer, demand, payment, and acceptance of remuneration—that is, of anything of value—for referrals

The federal government, and many courts, interpret the AKS to apply even when an arrangement may have many legitimate purposes; the fact that one of the purposes is to obtain money for the referral of services or to induce further referrals is sufficient to trigger a violation of the law.

State laws differ in their treatment, scope and interpretation, but generally contain similar provisions barring remuneration for referrals, sometimes expressed as anti-kickback or fee-splitting prohibitions.

In addition, federal laws such as wire fraud statues and the Travel Act turn what are “simple” violations (a huge simplification!) of state laws into federal criminal offenses. The federal Controlled Substances Act permits prescribing and dispensing only for legitimate purposes, not in respect of “pill mill” and other massive prescribing activities. Additionally, the federal statute of healthcare fraud makes it a crime to defraud a healthcare benefits program, including a commercial insurer.

The Takeaways for You:

1. Money: The are many legitimate ways for physicians to increase their practice income. They include, depending on state law, investments in pharmacies and the direct dispensing of pharmaceuticals.

2. Structure: But any deal must be structured in compliance with the federal Anti-Kickback Statute, the Controlled Substances Act, Stark, and numerous other federal laws, as well as with various state law counterparts and other restrictions. Your investment in structuring things correctly is an investment in yourself and your jail-free future.

3. Compliance Auditing: No matter how well structured, it’s essential that you engage in periodic compliance audits coordinated through legal counsel. Laws change and actual behavior impacts all of the structure and planning. Even the best planning can be made worthless if illegal conduct takes place within the context of what was planned to be a proper structure.

4. Investigations: If you learn that you (or any person or entity connected to the operation) are under investigation, immediately engage a team of experienced healthcare attorneys and criminal defense counsel. Many potential prosecutions are resolved at this stage.

5. Indictment and trial: Again, immediately engage a defense team of healthcare and criminal defense counsel.

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Mark F. Weiss