A Joint Venture Agreement and Central Park Medical Group - Essay Example

 A Joint Venture Agreement and Central Park Medical Group As the head administrator for Sundown Community Hospital, I have been directed by the board to enter into a joint venture agreement with Central Park medical group. I am aware that this medial group treats a patient population of which 60% are covered by Medicare. I am instructed by the board to offer special privileges and bonuses to the doctors of this medical group. According the federal anti-kickback statute, a part of the safe harbor regulations, it is against the law to knowingly solicit or pay a person or a group of people to refer individuals on state or government medical insurance to your medical center or group. This is essentially what I am being asked to do; I am being asked to pay “monthly bonuses” to the Central Park Medical Group in order to form a business arrangement in which patients of the Central Park Medical Group are sent to my establishment, Sundown Community Hospital. In addition, it seems that the board as well as myself are fully aware of the fact that 60% of the Central Park Medical Group patients are covered by government health coverage. This is obviously why the board is eager to seal this deal with the medical group. The fact that this is a joint venture agreement makes some of the facts a bit subject to interpretation as the Board of Medical Directors has implemented certain rules depending on the state. Anti-kickback statutes specifically state that income that may surface from joint venture activities must be compensation for services rendered. The “bonuses” given to physicians in the joint venture agreement between my organization and the medical group in question is very clearly not for any purpose but as referral incentive. The Medicare and Medicaid Protection Act of 1987 clearly state that the type of actions described by the board to me as the administrator would qualify as a federal offense punishable with fines of up to $25,000 as well as other possible sentencing. I absolutely would make this clear to the board, that the terms under which they would like to issue the joint venture agreement are not only unethical but also illegal and could result in criminal prosecutions of not only board members but the members of the Central Park Medical group and myself. My suggestions would follow a more legal and ethical approach. I would suggest to the board that first of all, each and every board member refresh their reading on anti-kickback statutes and laws. I would remind the board that although certain allowances are made in these statutes, the terms which they have decided on regarding the medical group in question are specifically why the statutes are in place to begin with. I would resubmit to the board a legal revision of the arrangement. It would include the merger between the Central Park Medical Group and the Sundown Community Hospital as one that promoted a helpful liaison to the patients, regardless of their insurance type. This would under no circumstances include any type of monetary gain from Sundown to the medical group, in the form of bonuses or perks. By definition of a joint venture agreement, the compensation received by the medical group would be limited to shared profit as well as losses. This is simply the only legal and ethical way to enter into such an agreement under these circumstances. I would also stress to everyone involved that since we are dealing with a medical group that has made us aware of their 60% Medicare patients, that we as the Sundown Community Health Center should be that much more concerned for the how the legality of this union appears. There should be careful measures taken to ensure that no one is receiving any type of kickback of any sort. I would also emphasize that since we are indeed a community center, we should be focused on the needs and best interest of the community and not our personal gains from the members of that community. In addition, I would remind everyone involved of the case of Feldstein M.D. vs Nash Community Health Services Inc. In this case, Dr. Feldstein sued Nash because he was promised salary and other perks in exchange for his service as a staff member. When the Nash Community Health Services was bought out, the new hospital refused to adhere to the original contract with Feldstein and motioned for summary. The ultimate ruling was in no one’s favor as the court viewed the contract as one that possibly violated kickback statutes. Also, the hospital’s motion for summary was denied. Certainly, the board of Sundown Community Medical Center as well as the Central Park Medical Group would both wish to avoid such adverse media coverage if the details of this possible arrangement were to leak. It is ultimately in everyone’s best interest to honor all statutes and laws surrounding joint venture agreements and most importantly the patients. The patients who are essentially being bought and sold in the original proposal simply because they are Medicare patients deserve to not be shuffled to a specific medical center because their physicians are getting perks from that center. This is precisely why these laws exist, to protect the patient who does not have the luxury of being present at the board meeting where they are being sold to the highest bidder. The physicians of the medical group in question took an oath to provide the best care possible for their patients. Unfortunately, this type agreement with Sundown (the original proposal, were it to be agreed upon) not only is not in the best interest of the patients but is putting everyone involved on a professional level in severe legal risk. My recommendations would be to enter into a legal agreement with the medical group that followed the true definition of joint venture agreements. It would be an agreement that allowed the Central Park Medical Group and Sundown Community Medical Center to share in profits equally as well as to share in loss and risk equally. It would include nothing that resembled any type of perk, bonus, privilege or otherwise for the Central Park Medical Group. Furthermore, it would make certain to always consider the needs and rights of the patients as first and foremost regardless of their type of medical coverage. I would finally make it clear that my proposal for revising the terms of the joint venture agreement was the only possible scenario that included the best interests of everyone involved. Works Cited www.physiciansnews.com/law/400burke.html www.physiciansnews.com/law/807csnj.html www.netreach.net/~wmanning/lasumm.htm www.lectlaw.com/forms/flol.htm www.Poyners.com/Attorneys/Ellis_case2asp Read More