Having trouble viewing this email? Click here
2017MarchBanner.jpg
 
 
 
 

43rd Conviction in Lab Scam Kickback Case: What You Need To Know

The cell doors slammed shut.

Another physician is likely headed off to federal prison. He’s the 29th physician convicted (out of a total of 43 convictions) for involvement in a New Jersey laboratory kickback scheme. Based on the sentences handed down in the prosecutions of other participants in the scheme, he might be spending up to 5 years behind bars. Or more.

But query this: Was his conviction due to ignorance over what the federal Anti-Kickback Statute (“AKS”) safe harbors really mean?

Physician Bernard Greenspan, a family medicine doctor, was convicted of receiving bribes totaling approximately $200,000 from Biodiagnostic Laboratory Services, LLC (“BLS”), its employees and associates. In return, Greenspan referred blood samples worth approximately $3 million in billings to BLS.

Interestingly, and frightening for those physicians, and others, who misunderstand the AKS and its place in the pantheon of prosecutorial weapons, Greenspan received the money from BLS and its affiliates through rental, services, and consulting agreements that were apparently vetted for “compliance” with the AKS’s space rental and personal services safe harbor.

After all, Greenspan’s attorney argued that the doctor had entered into legal agreements for rent and services and that there was no evidence that he ever made referrals in exchange for remuneration. So, how could the payments be kickbacks?

What You Need To Know

1. Fitting a deal within one of the AKS safe harbors is not, never was, and never will be a guaranty that you are immune from AKS prosecution, because the safe harbors do not protect sham arrangements. Accordingly, Greenspan was indicted and convicted of violating the AKS, also known as 42 U.S. Code § 1320a–7b.

Unfortunately, too many deals that facially fit within a safe harbor are “ass backward” arrangements designed to cover up illegal arrangements: Lab owner Joe tells Dr. Sally that he’ll give her a little “taste” if she sends some patients his way. Sally feigns horror, but sees no problem with Joe’s comeback: Joe’s cousin Lou will rent space from Sally for $X pursuant to a lease that meets all of the check-the-box requirements of the space rental safe harbor. That includes the fact that the rent will be within the range of FMV. Sally will send her patients’ blood samples to Joe’s lab.

Like the old expression goes, you can put lipstick on a pig, but it’s still a pig. The lease was just the lipstick. The acceptance of $X, even if it is fair market value, was the pig, the crime.

2. Even if compliance with a safe harbor is legit, compliance with it protects you from AKS prosecution only. There are many other laws that prohibit much of the same conduct and to which the AKS safe harbors have absolutely no relevance.

For example, in addition to the AKS violation, Dr. Greenspan was also indicted for, and found guilty of, violating:

  • 18 U.S. Code § 371 - Conspiracy to commit offense or to defraud United States: The conspiracy with BLS and its owners and managers to defraud Medicare. 

  • 18 U.S. Code § 1343 - Fraud by wire, radio, or television: The Medicare payments sent by interstate bank wire (the electronic payments from the Medicare contractor to BLS’s bank account). 

  • 18 U.S. Code § 1952 - Interstate and foreign travel or transportation in aid of racketeering enterprises (the “Travel Act”): Both (a) the payments by the Medicare contractor to BLS’s bank account by bank wire, and (b) the fact that the payments constituted commercial bribery under New Jersey state law, thus triggering violation of this federal law. (See my article Why Your Compliance Efforts May Be Worthless in the January issue of the E-Alert.) 
3. I’ve written many times that those you work with are potential witnesses against you. For example, people often turn employees into whistleblowers in respect of civil prosecution for violation of the False Claims Act.

As anyone who watches crime story movies or TV shows should know, the same situation, but on steroids, plays out in respect of criminal prosecution: Other participants in the scheme flip on you to reduce their charges or punishment.

In the case of Dr. Greenspan, the two brothers at the center of the BLS scheme, the company’s president, David Nicolls, and Scott Nicolls, testified that they entered into a conspiracy with Greenspan to get the blood samples in exchange for kickbacks. The Nicholls pleaded guilty and, while they await sentencing, are cooperating in the prosecution of their co-conspirators.

4. Unfortunately, most “compliance” planning is done by people with no real world experience in deals gone wrong and government prosecution. Text book situations are not real world situations.

Unfortunately, the real world is much more cruel.

What You Must Do

Every new, and every existing, financial relationship with anyone or any entity with which physicians and other healthcare providers do business must be vetted or re-vetted in light of today’s enforcement reality. Immediately. If they’re violative, they must be unwound.

As to Dr. Greenspan, at 79 years old it’s conceivable that he’ll spend the rest of his life behind bars.

 
 

Wisdom. Applied. 99 - An Alternative Structure For Medical Group Compensation

Most medical groups have a two-level physician engagement/compensation structure: owners and non-owners.

There may be a better way.


Interesting
Image

 
 
 


All Things Personal

I’d crested the hill and was heading down the narrow two lane road toward the underpass. Just then, the gray Ford Taurus in front of me slammed to a halt and began to do a three point turn.

Yes, in the middle of the road. And yes, blocking traffic in both directions.

We’ve all run into people with no situational awareness. Or, even worse, into people with no sense of anyone’s but their own importance.

Years ago, a client group had a physician who’d regularly run to the hospital CEO to rat out his colleagues, thinking that that would put the CEO in his debt. It didn’t, but it sunk the group. Another had a member who’d wear tennis togs to negotiations for exclusive contracts. A third had a physician who'd drive over the landscaping in his 4-wheel drive truck instead of using the exit to the doctors’ parking lot.

Do you have one, or more, of them in your group? How are they blocking your group’s route to success?

It’s time to straighten them out, or tow them off, before they cause a pile up to your progress.



Recently Published Blog Posts
 
 


Forward This!

Feel free to forward this newsletter to your friends. They can sign up for their own copy here



Whenever you're ready, here are 3 ways I can help you and your business:

1. Download a copy of the Success or Failure? Book

My book Success or Failure? Strategic Tools For Medical Group Leaders provides you with a framework for thinking about your success. You can buy it on Amazon or, for free, download a copy at the following link - Click 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. If You’re Not Yet a Client, Engage Me to Represent You.

If you’re not yet a client, and you’re interested in increasing your profit and managing your risk of loss, just reply to this message and put "One-on-One" in the subject line. I’ll contact you to set up a call or meeting.

 
 







 
Mark F. Weiss

The Mark F. Weiss Law Firm, a Professional Corporation
(Formerly known as Advisory Law Group, a Professional Corporation)
markweiss@advisorylawgroup.com
 
 
SANTA BARBARA OFFICE:
1227 De La Vina Street
Santa Barbara, CA  93101
Tel: 805 695 8107
 
LOS ANGELES OFFICE:
10940 Wilshire Boulevard
16th Floor
Los Angeles, CA  90024
Tel: 310 843 2800
 
DALLAS OFFICE:
1717 McKinney Avenue
Suite 700
Dallas, TX 75202 
Tel: 972 392 9200
 
Fax (all locations):  877 883 0099
www.advisorylawgroup.com
 
Read Mark Weiss' blog, "Wisdom. Applied." at www.advisorylawgroup.com/blo g1
Sign up for our complementary email newsletter, Advisory E-Alert, at www.advisorylawgroup.com
 
THIS EMAIL IS INTENDED ONLY FOR THE PERSON OR PERSONS TO WHOM IT IS ADDRESSED.  IF YOU ARE NOT AN INTENDED RECIPIENT, PLEASE CONTACT  MARKWEISS@ADVISORYLAWGROUP.COM IMMEDIATELY.  This email may contain confidential and/or privileged information protected under applicable law which may be exempt from disclosure.  If you are not an intended recipient or are not the person who is responsible for delivering the message to an intended recipient, please note that any distribution, copying or other dissemination of this email is absolutely prohibited.
© 2017 The Mark F. Weiss Law Firm, A Professional Corporation
 
~OptOut_8~
The Mark F. Weiss Law Firm 1227 De La Vina St. Santa Barbara, California 93101 United States (310) 843-2800
 
 
 
 
  
 
2017MarchDate.jpg 
 
 
Follow:
 
 
 
 

The2.jpg





NEW BOOK OFFER
 
 
 
334_Impending_Death_Web_Icon.png
 
COMPLIMENTARY BOOK
DOWNLOAD
 
Having fallen for the fallacy that there’s profit in market share, hospitals have gorged on acquisitions and on employment and alignment of physicians. Many physicians have been willing participants through practice sales and in the belief that there’s safety in hospital employment. But it’s becoming evident that physician employment leads to losses and that integrated care delivers neither better care nor lower costs. And now, technology is about to moot many of the reasons for a hospital’s existence. How can your practice survive and even thrive in the post-hospital world?
 
The Impending Death of Hospitals is available for purchase in hard copy or in Kindle format on Amazon or you can download a complimentary PDF version here.
 
 

 
 
Success Or Failure? Strategic Tools For Medical Group
Leaders - Book Cover 
COMPLIMENTARY BOOK
DOWNLOAD
 
Today’s medical groups must confront multiple challenges: The impact of Obamacare. Increasing commoditization. More competition, not just from other physicians and medical professionals, but also from hospitals, investor-owned groups, and disruptive ventures. Yet at the same time, the future of healthcare offers medical groups tremendous opportunity.
 
This small book is a collection of essays, of thoughts as thinking tools for your success. Read. Think. Succeed. Repeat.
 
 
 
 
 
Interesting Image 
COMPLIMENTARY BOOK
DOWNLOAD
 
Some days, it seems as if everyone, from anesthesia groups to vascular surgery practices, is talking about selling their practice to a larger group, to private equity investors, or to a hospital.


The reality is that some practices can be sold, some can never be sold, and some have nothing to sell.

The reality also is that there are a number of strategic alternatives to a practice sale.

 

A perfect storm of factors is accelerating the market for hospital-based medical group mergers and acquisitions.  

 

Download Here>
 
 
 
 
Directions 2014 Cover
COMPLIMENTARY BOOK
DOWNLOAD
 
The healthcare market is changing rapidly, bringing new sets of problems.
 
How can you find a solution, how can you engage in the right development of strategy, and how can you to plan your, or your group’s, future without tools to help clarify your thinking?
 
Directions is a collection of thoughts as thinking tools, each intended to instruct, inform, and even more so, cause you to give pause to instruct and inform yourself.
 
 
 
Knowledge Products 
MFW Knowledge Products
 
If you're an independent learner or need a refresher on a current topic, click here to find out about our growing list of Knowledge Products.


 
Recent Interviews and Published Articles

Mark was quoted in the article ASC Regulatory Areas That Developers Need To Pay Attention To published on Nov. 9, 2016 in The Ambulatory M&A Advisor. Read or download here

Mark's article OIG Advisory Opinion Secrets and Strategies was published in the Summer 2016 volume of Communique. Read or download here.

Finders keepers, losers weepers. Except in connection with overpayments from Medicare, then it’s a violation of the federal False Claims Act leading to significant liability—that is, unless you repay the overpaid sum within 60 days. Read CMS Resets the Clock for Return Of Medicare Overpayments published on AnesthesiologyNews.com in May 2016. Read or download here.


Mark's article A New Strategy To Profit From Interventional Radiology, co-authored with Cecilia Kronawitter, was published on AuntMinne.com on May 23, 2016. Read or download here.


Three of Mark’s blog posts were republished as a column entitled Practice Challenges in the Spring 2016 issue of the Pennsylvania Society of Anesthesiologists Newsletter, the Sentinel. Read or download here.

Mark's article Is There An Interventional Radiology ASC (irASC) In Your Future? was published in the April/May 2016 volume of Radiology Business Journal. Read or download here.

Mark's article Impending Death of Hospitals: Will Your Anesthesia Practice Survive? was published in the winter 2016 volume of Communique. Read or download here.

Mark was quoted in the article Practice Patterns Change While Outcomes Remain Steady Among Older Anesthesiologists, published in the December 2015 issue of Anesthesiology News. Read or download here.
 
Mark's article Anesthesia Group Mergers, Acquisitions and (Importantly) Alternatives was published in the summer 2015 volume of Communique. Read or download here.
 
Mark was quoted in the article Anesthesiology Acquisition Rate Still at Fevered Pace, published in the July 2015 issue of Anesthesiology News. Read or download here
 
Mark's article Seeking Certainty In Radiology: Mergers, Acquisitions and Alternatives was published in June 2015 on Imagingbiz.com. Read or download here.