Over the last several weeks, I’ve been discussing some ways that unscrupulous providers take advantage of the system for their personal gain. But what about those underhanded providers who not only take advantage of the system itself, with things like services not rendered, medically unnecessary services, upcoding, and the slew of vernacular, but those same disreputable providers who take advantage of each other? I think I’ve gotten a few people who have read this to think about where that might happen. One of my favorite phrases is “there is no honor amongst thieves.” It’s a very true statement when it comes to kickbacks; one must tell on another and will do so when faced with the threat of their own legal perils.
Here is the scenario: a provider sells the large, and very profitable practice to another provider looking to either establish themselves in an area or grow an existing practice to another location or expanded patient base.
As the purchaser of a robust, large patient-based practice, are you really doing the type of due diligence that is not normally done in the sale of a business? The very specific situation went as follows: an ophthalmologist was selling his practice for a large amount of money. A young ophthalmologist saw a great opportunity. The practice was in a very upscale area in Manhattan. Large patient base, diverse patient population, but with conditions and with an insurance payer mix. The purchaser did some due diligence, but to what extent I do not know.
After purchasing the practice, the young ophthalmologist soon learned that the practice was a sham. Although everything I stated above about the practice was true, it was all based upon the fact the selling ophthalmologist was an unscrupulous provider, rendering services to his patients that they did not need, upcoding, and billing for services not rendered. The purchasing provider paid a lot of money, based on what he believed to be a legitimate, and profitable business.
The scammed ophthalmologist filed a qui tam, and rightfully so. Medical records were reviewed, interviews conducted, and ultimately the matter was resolved with a settlement. The purchasing provider got his purchase price back, a valuation of the true income for the services was calculated, and the case was closed.
I remembered this investigation recently when Advize was asked to assist in a due diligence analysis, specifically to review patient records for correct coding, billing and documentation. It also reminded me that “there is no honor amongst thieves,” and if an individual is willing to use the most vulnerable of a population for their own financial benefit (it is not just the Medicare population, but even anyone in need of healthcare), why stop at them?
Healthcare fraud really does transcend many aspects of a fraudulent business operation, and just when you think to yourself that you aren’t going to see anything new, someone really does reinvent the wheel.