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Super Group Doctors Beware of Departure Provisions Print E-mail
Written by Jeffrey Cohen   
Sunday, 03 June 2012 00:00

Super groups are in vogue as physicians do their best to reduce costs and enhance revenues. A "super group" is essentially a collection of previously separate competitors who have joined a single legal entity in order to achieve certain advantages. Those advantages tend to be (1) reducing overhead expense associated with economies of scale. Buying insurance for a group of 100 doctors should be far less expensive per doctor than a group of three doctors; (2) gaining leverage in managed care contracting. 20 groups of five physicians each cannot contract with a payer with "one voice" due to the antitrust restrictions, but a single group of 100 doctors can; and (3) finding new revenue sources. Small groups and solo practices cannot afford revenue producing services like surgery centers, imaging services and such. When practices combine, they have a greater patient base, which makes the development of new revenue sources feasible.

Physicians join super groups with terrific promise and hope. They are clearly a good idea, especially if they have solid operations. That said, physicians who rush to form them rarely consider the risks associated with a physician departing the group. They need to!

When a doctor joins a super group, she stops billing through her old practice (the "P.A.") and starts billing through a new group (the "LLC"). The LLC has a tax ID number and a Medicare group number. And the LLC enters into lots of managed care payer agreements. Simply put, the doctor puts all of her eggs in the LLC basket.   So what's the risk?

When physicians depart super groups, they have to confront difficult facts, like:

It will take months to get a new Medicare provider number. If they haven't billed through their "old entity" for a while, that number is gone. And getting a new number for the departing physician takes time, during which revenues associated with Medicare patients are lost (until the number is obtained);

It takes even longer to get on insurance plans. If the LLC is contracted (they usually are), how long will it take to get the P.A. fired back up? It can take as long as six months (and sometimes even more). That means the departed doctor is out of network with all the plans! This exposes her patients to higher costs and may affect referral patterns. This alone can be crippling to a physician who has left the super group.

Leaving can also mean ending access to patient scheduling and electronic medical records. Many super groups do not ensure access to patient scheduling or billing to enable a departing physician to get back on their feet; and this can be devastating.

Noncompetes can play a big role in how a departing physician resumes her income stream. Ideally she will know that being solo is not as good as being part of a larger practice. But what if the super group imposes a restriction on the departing physician that prevents her from being part of another group? This is common and often very harmful, since some physicians who depart super groups have no effective options but to join other groups.

Super groups exist to benefit physicians. It makes no sense that they would be used to harm them, which is precisely what can happen (and sometimes does happen) if physicians do not pay good attention to the "back end" as well as they do to the "front."  Super group arrangements continue to grow. Some of them even develop into fully integrated and sophisticated businesses. Physicians who join them have to consider all "angles," not just how good it will be or can be when they join.

With almost 25 years of healthcare law experience following his experience as legal counsel for the Florida Medical Association, Mr. Cohen is board certified by The Florida Bar as a specialist in healthcare law. With a strong background and expertise in transactional healthcare and corporate matters, particularly as they relate to physicians, Mr. Cohen's practice involves him in regulatory, contract, corporate, compliance and other healthcare law related matters. As Founder of the Florida Healthcare Law Firm, Mr. Cohen can be reached at 888-455-7702 or online at: jcohen@floridahealthcarelawfirm.com. 

Last Updated on Monday, 04 June 2012 08:05
 
Former Medical Capital Exec Pleads Guilty Print E-mail
Written by Kelly J. Shivery   
Friday, 25 May 2012 00:00

Joseph J. Lampariello, former president of Medical Capital Holdings, Inc. ("Med Cap"), pleaded guilty recently to wire fraud and failure to file a tax return. Lampariello, who earned $6.2 million from the sales of Med Cap notes, faces up to 21 years in federal prison, and an order to pay $49 million in restitution, when he is sentenced.

Between 2003 and 2009, Med Cap raised almost $2 billion from investors, supposedly for the purchase of discounted medical receivables, such as unpaid healthcare bills, that Med Cap would then collect at full price. A court-appointed receiver, appointed in 2009, alleged that Med Cap had actually been operating a Ponzi-like scheme that had bilked $1 billion from more than 11,000 investors.

Lampariello and Med Cap's former chief executive, Sidney Field, were sued by the Securities and Exchange Commission ("SEC") for fraud, in connection with Med Cap's last offering, Medical Provider Funding Corp. VI ("MedCap VI"). According to the Justice Department, Lampariello defrauded the MedCap VI note holders from August 2008 to June 2009.

The Justice Department claims that Med Cap's investors were told their funds would be used to purchase account receivables and for general operating costs, when in fact, Lampariello and others, used investors' funds to make Ponzi-type payments to earlier investors, to pay personal expenses, and to invest in more exotic ventures, such as owning a medical nuclear reactor, producing a movie about a Mexican little league team and a 115-foot yacht.

As a result of a massive number of investor lawsuits seeking to recover Med Cap losses, dozens of the independent broker-dealers that sold Med Cap notes, went out of business.

Investors nationwide who have been the victims of a Ponzi scheme, may contact the Florida securities arbitration lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com.

Last Updated on Sunday, 27 May 2012 15:36
 
Acquirers Seek High Performing Medical Groups Print E-mail
Written by Jeffrey Herschler   
Monday, 14 May 2012 07:24

Healthcare M & A

As the economy picks up, Healthcare M & A activity has increased markedly. The trend is accelerated by an emerging consensus that pending changes in payment models necessitate "strength in numbers". According to AxialMarket.com, "...within the Health Care industry in the United States and Canada in 2011...Health Care accounted for 9% of overall network activity and experienced a 96% increase in deal flow in Q4.

On April 27, Bob Wilson, a Managing Director at Grant Thornton, presented on transaction and integration issues as they relate to healthcare company mergers and strategic partnerships. He spoke at the annual FICPA Health Care Industry Conference in Orlando and placed particular emphasis on the Elements of High Performing Medical Groups. Potential suitors are obviously trying to identify these elements as they search for acquisition targets and partners.

Mr. Wilson named the following Group Practice Essentials:

Operating Performance
  • Operating Efficiency              
  • Medical Management
  • Physician Activities               
  • Patient Access & Throughput
  • Cost Structure                        
  • Revenue Cycle

Infrastructure
  • Governance                           
  • Management
  • Policies & Procedures            
  • Technology

In addition, he stressed that a high performing Culture must be pervasive throughout the organization. Those practices seeking a buyer or partner would be well served by developing and showcasing their high performance metrics.

Last Updated on Monday, 04 June 2012 08:38
 
Why one-third of hospitals will close by 2020 Print E-mail
Written by David Houle and Jonathan Fleece   
Friday, 11 May 2012 08:54

For centuries, hospitals have served as a cornerstone to the U.S. health care system. During various touch points in life, Americans connect with a hospital during their most intimate and extraordinary circumstances. Most Americans are born in hospitals. Hospitals provide care after serious injuries and during episodes of severe sickness or disease. Hospitals are predominately where our loved ones go to die. Across the nation, hospitals have become embedded into the sacred fabric of communities.

According to the American Hospital Association, in 2011 approximately 5,754 registered hospitals existed in the U.S., housing 942,000 hospital beds along with 36,915,331 admissions. More than 1 in 10 Americans were admitted to a hospital last year.

Hospitals make a substantial imprint on local economies. In many communities, hospitals represent one of the largest employers and economic drivers. Of the total annual American health care dollars spent, hospitals are responsible for more than $750 billion.

Despite a history of strength and stature in America, the hospital institution is in the midst of massive and disruptive change. Such change will be so transformational that by 2020 one in three hospitals will close or reorganize into an entirely different type of health care service provider. Several significant forces and factors are driving this inevitable and historical shift.

READ MORE Source: KevinMD

Last Updated on Monday, 21 May 2012 07:47
 
Protecting Assets From Loss In a Divorce Print E-mail
Written by David B. Mandell, JD, MBA & Jason M. O'Dell, CWM   
Friday, 11 May 2012 08:50

Each year, thousands of physicians are frustrated with the financial consequences of their marital dissolution. They may believe the judgments are overly burdensome, or they may lose personal assets intended for children, or family assets intended to remain within the family. With proper advance planning, the financial pain of a divorce can be minimized.

Using a Premarital Agreement

A premarital agreement (or prenuptial agreement, premarital contract, ante-nuptial agreement, etc.) is the foundation of any financial protection in the case of a divorce. The premarital agreement is a written contract between the intended spouses that specifies the division of property and income upon divorce, including the disposition of specific personal property, such as family heirlooms. It also states the responsibilities of each party and their children after divorce. Finally, these agreements can lay out responsibilities during marriage, such as what each spouse can expect in financial support or the religion that will be used to raise future children. The agreement cannot limit child support.

Protecting Assets after Marriage

Many physicians seek advice about protecting assets when they foresee their marriage ending. Generally, there is not much one can do to shield assets if they are not already protected through a premarital agreement. However, when implemented in a transaction with real economic substance (such as benefit, tax or estate planning), certain planning techniques may have a secondary benefit of lowering the value of an asset for marital dissolution purposes. This valuation benefit can be significant when the court eventually splits assets. Options include investing in certain types of benefit plans through the practice, non-traded REITs and other temporarily-illiquid investments, specific types of cash value life insurance, and annuities.

Conclusion: Planning is Completely Fact-Specific

Whether planning before marriage, after marriage, or even for a family member, no one tactic or approach works well for all clients. Consulting with advisors who are well-versed in family law and asset protection is critical for achieving the greatest level of insulation from loss in a divorce

Please click HERE to read important disclosures.

David Mandell is an attorney and principal of the financial consulting firm OJM Group, where Jason O'Dell is also a principal. They can be reached at mandell@ojmgroup.com or 877-656-4362.

Last Updated on Friday, 11 May 2012 09:08
 
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