The Continued Scamming of Healthcare

July 30, 2016 Leave a comment

Here are just a few healthcare fraud cases of note during July 2016:

Three Miami men — $40 million in fines and restitution and 188 months of prison for billing for phantom home healthcare, money laundering, and kickback schemes.

New York surgeon — $25 million in false claims for billing for services not performed.

Maryland X-Ray company owner — 10 years prison for fraudulently billing bogus medical interpretations for diagnostic tests that resulted in two patients’ deaths.

New York physician — jail time for kickback with hospitals in exchange for referring patients to nursing homes.

South Carolina hospital — $17 million in fines for improper financial arrangements with referring physicians.

Illinois woman — $15.6 million and six years prison for fraudulent billing in home health services.

Texas physician — 63 months prison and $1 million in fines and restitution for falsely certifying patients for home health services.

Florida physician — 46 months prison and $2.1 million in fines and restitution for intentionally falsifying diagnoses to get higher Medicare advantage plan capitation payments.

FSA Qui Tam Suit Against “Company Model” Providers

April 15, 2016 Leave a comment

In October 2013, the Florida Society of Anesthesiologists filed a qui tam action under seal as required, which named as defendants a large number of Florida GI physicians, surgery centers, and “company model” anesthesia providers.  The action was unsealed and made public during the last week of March.

Chief among the FSA’s allegations is that the defendants violated the federal False Claims Act by billing and collecting for anesthesia services performed by captive “company model” anesthesia providers.

At its simplest, the term “company model” refers to an anesthesia company jointly owned by referring physicians and anesthesiologists that is formed to provide anesthesia services at the ambulatory surgery center that the referring physicians own.  The jointly owned anesthesia company takes the place of anesthesiologists (or an entity owned 100% by them) which previously performed the anesthesia services for the ASC. By using the company model arrangement, the referring physicians are then able to share in the revenues generated by the anesthesia services that previously would go solely to the anesthesiologists who performed the services.

The OIG made it clear in its Advisory Opinion 12-06 posted on June 1, 2012 that the company model and similar arrangements “could potentially generate prohibited remuneration under the anti-kickback statute and that the OIG could potentially impose administrative sanctions.”  The American and Florida Societies of Anesthesiologists had been urging the OIG to take action like this for a long time, and it is not surprising that the FSA would take the lead in filing a qui tam action on company model arrangements that continued after the OIG posted its opinion.

This is a very significant case.  The U.S. Attorney’s Office has presently declined to intervene, but its investigation is ongoing.

The Doctors Company – Ransomware Attacks

April 13, 2016 Leave a comment

The Doctors Company, a physician-owned malpractice insurer, recently posted an article on so-called “ransomware” attacks on healthcare providers.  Ransomware is a software virus that infects your computer network by encrypting all of your data so that it cannot be accessed without typing in the encryption key which the ransomware attacker will provide for a price.

I have a lawyer colleague whose law firm was the victim of a ransomware attack. Fortunately, the firm did frequent backups and all the data could be restored without having to pay the ransom. However, there was great disruption to the office, work essentially stopped, and everything has not quite been the same since the data was restored.

The Doctors Company’s article says that ransomware victims only have three options – restore the data (but that requires frequent backups), pay the ransom, or lose the data. For most organizations, especially those in healthcare, choosing to lose the data is not a viable option.

Victims face the loss of business, inconvenience to patients/clients/customers, damage to reputation, and potential liability if needed data is not available and a patient or client or customer is adversely affected.

Prevention, vigilance, and employee education are all critical to responding effectively to a ransomware attack.

Health Rankings — Pinellas County and Hillsborough County

April 6, 2016 Leave a comment

The following infographic from the Suncoast Health Council compares various health factors between Pinellas and Hillsborough Counties, Florida:


2016 Pinellas-Hillsborugh Health Rankings


Saving the Medical Profession

March 23, 2016 Leave a comment

The following email string from earlier today from physician leaders is very telling and tragic.  The email discussion starts with this:

Many of you will recognize some of the themes in this piece written by a frustrated young physician who has made the tough decision to leave her practice. Some of you might have struggled with the same issues discussed in this essay.

Here are two quotes from her thoughtful essay:

“The phenomenon of patients as customers, the cultural rise of entitled incivility, and trusting Dr. Google more than their doctor has eroded some of the pleasure of patient care.”

“In the past decade, physician groups have been purchased by hospitals and conglomerations. Rather than being recognized for individual excellence by patients voting with their feet, this has resulted in doctors being interchangeable cogs in a system where patients/hour and shifts/month dictate value.”

[go here, to read the article]

Two physicians responded with the following:

As physicians, WE make the wheel go around. Yet we have allowed our knowledge, our expertise, and our unmatched dedication to be devalued by hospitals, insurance companies, politicians, etc.

I think that the more we are called providers and we do not educate the public about the time commitment and education that physicians put in to become the master of the profession then we lose. … medical students are very talented. We need to make this news because we are the only ones who can provide quality care and provide the impetus to decrease costs We are the only ones equipped to do so. The MD degree has tons of value and it is not an interchangeable cog in the wheel.

I responded:

So true.  My law practice focuses on representing physicians, which includes helping them evaluate and participate in opportunities as they deal with the onslaught of onerous laws, rules, and regulations. I constantly must remind my clients that physicians are and remain the sole source of value in healthcare. Notwithstanding that, many physicians, young and old, constantly ignore good opportunities for their practices because they are intimidated into choosing the wrong ones.

As the public member on the Board of Governors of the Florida Medical Association, I am pleased at the FMA’s focus (1) on lobbying legislators who are notoriously ignorant about physicians and the practice of medicine, and (2) on educating its members so that they can better understand and evaluate what is going on in the business of medicine.

I worry whether we can make a big enough impact quickly enough.

No other profession is faced with less respect or more demands or higher expectations than allopathic and osteopathic physicians.

This is not about “socialized” medicine, Obamacare, or anything other than  economics.  It has always been about the money.  We are happy to make physicians work harder for less, and that has been happening for years.  People don’t care because they have drunk the Kool-Aid from the insurance companies and the government that the  medical profession is the problem with healthcare, and a misinformed public accepts the view that somehow physicians are the enemy.

There’s an App for That: Benefits and Risks of Using Mobile Apps for Healthcare | The Doctors Company

February 2, 2016 Leave a comment

[The Doctors Company is a physician-owned professional liability insurer that, in my experience with my clients, does a very good job.]


With over 100,000 mobile health apps now available, physicians now have to handle an increasing amount of constant data and patient information that they did not have in the past. Mobile apps offer many benefits, but the use of these apps does not come without liability risks for doctors.

Source: There’s an App for That: Benefits and Risks of Using Mobile Apps for Healthcare | The Doctors Company

The Healthcare Marketplace — There is No Invisible Hand (until when consumers start paying)

October 26, 2015 Leave a comment

The Tampa Bay Times included on its front page this morning an article entitled: “Big swings in medical prices make for a wild market, but savvy patients can benefit”

“It is a chaotic landscape, which is why it is so difficult for consumers and employers to navigate,” said Castlight vice president Kristin Torres Mowat.

So what gives?

For one, the market for health care doesn’t behave like most other markets. Consumers usually don’t know how much a procedure costs until after they’ve had it, and it can be challenging to compare prices beforehand. That means providers can set their rates somewhat independently of normal market forces — the forces that keep prices consistent at neighboring gas stations.

Bruce Vogel, an associate professor of health policy at the University of Florida (and a dorm mate at UF many years ago) was quoted in the Tampa Bay Times article — “It’s hard to find a market that deviates more from the perfectly competitive structure.”

Even Florida Gov. Rick Scott, a staunch conservative who opposes most government regulation, has expressed concern over the healthcare marketplace, focusing on the transparency of hospital pricing.  In the September 29 online edition of Florida Politics, Gov. Scott was quoted:

“This is all about patients and empowering patients,” he told reporters after a Florida Cabinet meeting. “They should know what (a procedure) costs and be able to get as much information as they can.”

You can read the Governor’s official statement regarding hospital price transparency and supportive comments from members of the Commission on Healthcare and Hospital Funding here.

Gov. Scott is a smart guy – an M&A attorney, who founded Columbia Hospital Corporation which merged into the Hospital Corporation of America to become Columbia/HCA, of which he was CEO for a number of years (during which time Medicare fraud issues arose). It is not like he does not know how healthcare providers in general, and hospitals in particular, price their services.

Since the advent of third-party payers, healthcare has always been an artificial market. Vendors of healthcare and consumers of healthcare (those with health insurance) have rarely negotiated prices.  The insurance companies negotiated with providers over what they would pay and with the insureds (or their employers) what their premiums would be. Add Medicare to the mix which set an artificial payment standard of some negotiated percentage of the Medicare rate, and pricing for healthcare services became almost completely independent of typical economic forces like supply and demand. Don’t even try to analyze pricing in rural or underserved markets.

So what is happening nowadays, when everyone is supposed to be insured, that makes healthcare pricing and bargaining with hospitals and other healthcare providers such a hot topic?  I think it is because of high deductible plans. Health insurance has basically become insurance only for catastrophic claims. When the family deductible may be $5,000 or more, the cost for “unreimbursed” services becomes a matter of personal economics — even if the provider is charging the rate previously negotiated with the healthcare insurer.

Unfortunately, the negotiating for healthcare services is far more complicated than the negotiating over the price of a car. Transparency in healthcare pricing is important, but transparency in healthcare quality is critical. Quality of care will soon be the dominant factor as we move away from procedure based payment for healthcare services to preventive care services (paid 100%) and bundled/global payments focused on the episode of care.

Adam Smith never had a chance in healthcare.

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