But Everyone’s Doing It!! Not a Great Defense to Compliance Violations

I’m dictating this blog post as I’m on my way to a meeting.

The speed limit’s 70 mph. I’m not going to tell you how fast I’m going, but I’m going with the flow of traffic, which is traveling at a lot more than the speed limit. (Some people refer to this stretch of the road as the Autobahn.)

For argument’s sake, let’s assume we’re all going faster than 85 mph. Let’s also assume that a policeman pulls over the driver in the silver Honda in front of me.

Is the driver’s defense going to be, “but everyone is speeding?” That’s not going to work with the cop.

Even if that argument eventually works with the judge, the driver’s going to end up spending a day in court trying to argue his way out of a fine. Or, to argue his way into a “traffic school” program to avoid a ding on his driving record. There’s a transaction cost, a heavy one at that.

If those arguments don’t work, he’ll have to pay a fine, and the ticket will be reported to his insurance company, which will likely raise his auto insurance premiums.

Those risks and transaction costs are all easy for us to understand.

But yet, so many people – physicians and business people – in structuring deals involving sophisticated federal and state anti-kickback issues and self-referral issues, often simply point to someone else who’s doing the activity, as if that makes it acceptable.

There’s a saying, “If you’ve seen one deal, you’ve seen one deal.” That’s so true. You don’t know if that deal was properly structured. You also don’t know if the pivotal reason the deal did work from a compliance standpoint applies in any way to your situation.

These days, unfortunately, physicians have targets painted on their backs in terms of prosecution. Prosecutors are using non-healthcare specific federal law in a way it’s never been used before to prosecute healthcare related crimes. And, they’re using federal law to funnel state law crimes into federal court.

There are tremendous opportunities in the market, opportunities that you can exploit. But in doing do, you must think twice, or even thrice, about the proper structuring of your deals.

If not, you’re inviting whistleblowers – enemies, jilted potential partners, former employees, and observers – to simply drop the dime on you or even to file a claim against you under the federal False Claims Act.

And, just like in traffic court, even if you’re found not guilty in the end, the cost of responding to an investigation and to a prosecution dwarfs the cost of up-front compliance planning.

Don’t skimp and save, trying to avoid an “expense,” when it might just be that the only place you have to spend your savings is in the federal prison commissary.

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

Mark F. Weiss

Continue Reading...