Out-of-Network ASC’s: Beware of Billing Companies Offering Patient Referrals [New Kickback Scheme]

It is difficult drawing new patients to out of network ambulatory surgery centers (ASC’s) and other similar out of network facilities as patients are becoming increasing more educated that having surgery at such facilities could result in huge cost share in the tens of thousands of dollars. Thus, out of network ASC’s and other facilities fear that lack of patient volume will result in poor profitability. Exploiting on these fears are certain billing companies that charge higher than ordinary contingency fees for billing services (upwards of 20% to 30% of collections). These billing companies and their producers promise double and even triple patient volumes in exchange for higher contingency billing fees. What the ASC and facility owner may not know, is that these billing companies and consulting firms are paying very high referral fees to referring doctors disguised as legitimate consulting or other legitimate services. The billing company and consulting firms argue that the referring doctors are performing services in exchange for the fees they pay them, but in most instances the fees are ten to one hundred times the going rate for such services.

An example of this is the recent charges filed in New York against several doctors and a pharmaceutical sales manager for conspiracy and violation of the anti-kickback law. This Long Island sales manager offered five physicians alleged “speaker fees” and other incentives for them to over prescribe a fentanyl spray. The speaker fees were used to create a “veneer of commercial legitimacy on what were essentially bribes to influence prescription habits. The doctors all face fines and 30 years in a federal prison. https://www.newsday.com/news/new-york/doctors-fentanyl-scheme-roper-1.17429882

This fraud scheme is the same as offering an out of network ASC struggling to bring on new patients, a steady stream of new patients. The referring doctors are offered consulting fees to review records or some other service which creates “a veneer of legitimacy” whereas the fees are merely bribes to doctors to get their patients referred to a particular ASC. Be careful. This is a slippery slope and all participants to such a scheme, the referring doctors, the ASC owners and billing company, could face still jail sentences for violation of the anti-kickback federal law. If anyone has any questions or concerns about these type of scenarios, or has been approached to participate in such a scheme, please contact Thomas Force, Esq. at The Patriot Group at (631) 870-4040 or by email at tforce@patriotcompli.com

The following cases go through multiple examples of how such schemes can be structured:

Anti-Kickback Illegal Referral Criminal Indictment Case Studies

1. Five (5) Manhattan Physicians Criminally Charged for Kickback Scheme (3/16/18): Drs. Gordon Freedman, Todd Schlifstein, Dialecti Voudouris and Alexandra Burducea were charges in federal court, New York City, with a kickback scheme to overprescribe the pain medication fentanyl that involved a Long Island pharmaceutical sales manager who doled out lucrative sham speaker’s fees, nightclub romps and lap dances. They face 30 years in jail! According to the indictment, bogus “speaker’s fees” — payments for supposed information seminars for other doctors — were the primary tool used to put a veneer of commercial legitimacy on what were essentially bribes to influence prescription habits.

2. Practice Management Company and Physician Charged with Illegal Kickback Scheme (4/22/98): In an opinion that could apply to hundreds of similar deals statewide, federal health regulators say a proposed contract between a Central Florida doctor and a practice-management company may include illegal kickbacks to the company for funneling patients to the physician. In return for managing the practice, the practice management company earns 20% of collections. Part of that fee is to bring in a steady stream of patients which, according to Florida Federal Prosecutors, violates Federal Anti-Kickback and Florida state Laws.

3. Family Doctor received 41 month Jail Sentence and $203,693 Fine for Illegal Kickbacks (6/20/17). Dr. Bernard Greenspan of New Jersey, took bribes for test referrals to a New Jersey laboratory. The bribes came in the form of inflated rental payments for the company to use space in Greenspan’s office; bogus consulting fees and even a job at the lab for a patient who prosecutors said was having a sexual relationship with Greenspan.

4. 21 Physicians Charges in Kickback Scheme (4/3/18). Twenty-one physicians from California accepted bribes for patient referrals from a southern California practice management company called Monarch Medical Group who advertised that it could provide physicians with new revenue streams from transdermal pain creams, oral medication dispensing, and urine drug-screening tests. Those revenue streams could lead to prison for 21 physicians charged in a California state court last week with fraudulently billing workers’ compensation insurers for these ancillary services and accepting kickbacks for patient referrals. The doctors shared in the profits of the ancillary services. Prison sentences could be as much as 30 years.

5. New Jersey Pain Management Physicians Charges with Illegal Kickback Scheme (3/5/18): Dr. Todd Kopel from Garden State Pain Management paid more than $190,000 to five chiropractors for 790 patient referrals. The five chiropractors were also charged criminally. Jail time could exceed 30 years.

6. Beverly Hills Physicians Charged with Illegal Kickbacks and Fraud (12/13/17):Radiologist Ronald Grusd and his imaging and consulting companies were charged with criminal fraud, bribery for paying kickbacks for patient referrals. Prison time could exceed 30 years.

7. Five Individuals, 2 Physicians charges with Fraud and Illegal Kickbacks in California (11/24/15): The former CFO of a Long Beacf, CA Hospital and two orthopedic surgeons were criminally charged with paying illegal kickbacks for referral of thousands of patients to the hospital network.

8. Home Health Care Agency Charged with Illegal Kickback Scheme in Texas (1/20/17): A Rio Grande Valley area doctor has been taken into custody for his scheme to solicit and obtain illegal kickbacks in exchange for Medicare patient referrals, announced U.S. Attorney Kenneth Magidson. Home Health Care Agency owner Martinez allegedly received cash payments as illegal kickbacks for the referral of Medicare beneficiaries.

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