Fraud on Physicians in the ASC Setting

As the shift of surgeries from the hospital setting to the ASC setting accelerates, we’re seeing more fraud at the ASC level.

No, I’m not talking about the significant amount of fraud that comes from the “usual suspects,” criminal operators who bill for medically unnecessary procedures, for procedures that never occurred, and so on.

Instead, as more physicians rush to invest in ASCs, unscrupulous facility promoters/managers scheme to separate physician investors from their money.

This fraud on physicians takes various forms, from securities fraud arising from misrepresentations, failures to disclose, and outright disregard for federal and state securities regulations and the exemptions therefrom, to sophisticated (and even Clouseau-like bungled) financial fraud on investors within the facility’s business operation.

“Compliance” in terms of investing in a surgery center is generally thought of as paying attention to the federal Anti-Kickback statute, state law referral prohibitions, and similar concerns. However, for physician investors it’s equally important to pay particular attention to vetting the overall structure of the deal and its promoters, the past history of the center’s operations, and the conflicts of interest and related-party dealings of those purporting to “manage” the facility.

Think of it this way: The last time I checked, a “physician-money-ectomy” isn’t on the Ambulatory Surgery Center Fee Schedule.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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State Licensing and Anti-Competitive Bureaucracy

At a time when telemedicine and telehealth are poised for rapid expansion, many state medical boards are doubling down on what appears to be their true purpose: enacting and enforcing anti-competitive measures to protect those already licensed in the jurisdiction.

Medical boards, like all professional licensing boards, are bureaucratic barriers to open competition. Sure, they justify their existence as protection of the public, but laws governing consumer protection don’t necessarily require state licensure as opposed to state registration as opposed to the even lesser deemed submission to state discipline.

The problem with bureaucracies is that once created, they never want to destroy themselves. Somehow, protecting the jobs, and the power, of petty politicians outweighs the harm they cause to society. Yes, the harm they cause by way of higher prices and a restricted supply of regulated professionals.

In the end, because the force of the future can’t be stopped, that protection simply means that those within the protected class will be disrupted from outside of it as opposed to from within.

Take a look, for instance, at what is going on in states like California. While the medical board is going about its job of protecting in-state physicians, the rest of the bureaucracy wakes up to the fact that there is a physician shortage. Instead of the obvious solution, which is fast tracking the ability to practice across state lines, the end result is the creation of other classes of licensed professionals such as naturopathic physicians and the expansion of the scope of practice of existing nonphysician healthcare providers.

It’s time to stop the B.S. of medical boards, state bars, and other relics of the past and to acknowledge what they are: Officially endorsed engines of anticompetitive behavior.

I’m not saying that we need to do away with consumer protection. I’m not saying that we need to do away with disciplining bad professionals. I am saying that we need to put those police powers in a “box” by themselves and drop the rest of the shenanigans that no longer pass the laugh test.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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