Anti-fraud efforts snagged $1.1 billion in ’07
Fraud-busting efforts of the Justice Department and HHS brought in $1.1 billion in fiscal 2007 for the federal government and private whistle-blowers, according to the annual report of the Health Care Fraud and Abuse Control Program.
Two-thirds of the $249 million allotted in 2007 went to the HHS’ inspector general’s office and accounts for the majority of its resources.
Not sure if this is something to boast about!>?
What about the NCFE case in Ohio? National Century Finance Enterprises, Inc., the largest private fraud case in the history of this country!
In fiscal 2007. the agencies appropriated $166 million from the Medicare trust fund and recovered $1.1 billion
In fiscal 2006, the agencies appropriated $241 million from the Medicare trust fund and recovered $1.8 billion
Posted: December 3, 2008 - 3:00 pm EDT
Fraud-busting efforts of the Justice Department and HHS brought in $1.1 billion in fiscal 2007 for the federal government and private whistle-blowers, according to the annual report of the Health Care Fraud and Abuse Control Program.The program, established by the Health Insurance Portability and Accountability Act of 1996, calls for the agencies to appropriate money from the Medicare trust fund to fight fraud perpetrated against federal health programs. Two-thirds of the $249 million allotted in 2007 went to the HHS’ inspector general’s office and accounts for the majority of its resources.
The dollars returned to the federal treasury as a result included $201 million in criminal fines, $211 million in penalties and damages, and $186 million from disallowed payments identified and recovered through audits. In fiscal 2006, the agencies appropriated $241 million from the Medicare trust fund and recovered $1.8 billion. Money collected on behalf of state Medicaid programs and private payers is not represented in the figures. (See the reports for 2007 and 2006.) -- by Gregg Blesch
http://www.modernhealthcare.com/apps/pbcs.dll/article?AID=/20081203/REG/312039974/1024/rss01&rssfeed=rss01&nocache=1&nocache=1
Showing posts with label NCFE. Show all posts
Showing posts with label NCFE. Show all posts
Friday, December 5, 2008
Friday, August 15, 2008
Why do Fraudulent Providers still exist ? Becasue they can?
Our Government and Lobbyists & FInancial Investment Firms at work, once again!!
That is the real answer. But maybe, for starters, we need to connect dots to the BIG POLICY MAKERS and their connection to FRAUD,i.e. Frist, Bush, Rainwater & Moore!
Go to the NCFE trial in Dublin, Ohio that DOJ would like to behave as this case is over, while the Co-Founder and a 3uear EXECUTIVE, James K Happ, has yet to go to trial? Now , you ask how this is connected........??????
http://biggerthanenron.blogspot.com
Now wwhy do you think this is?"...states submitted incomplete data or reported not taking any action against health care providers in 2004 and 2005."
"...In violation of federal law, states routinely fail to notify federal authorities when they've kicked health care providers out of their Medicaid programs for incompetence, fraud and other reasons,..."
"...61 percent of the 4,319 sanctions imposed by state Medicaid agencies in 2004 and 2005 could not be found in the federal database."
"...two states that suspended the largest number of providers, New York and Florida, had the lowest matching rates,21 percent and 9 percent respectively."
WASHINGTON — In violation of federal law, states routinely fail to notify federal authorities when they've kicked health care providers out of their Medicaid programs for incompetence, fraud and other reasons, government investigators have found.
The lack of notice makes it easier for barred providers to set up shop in other states and to continue getting payments from federal health programs.
The inspector general for the Health and Human Services Department maintains the list of health care providers prohibited from getting any federal health reimbursements. Last year, the IG's office added 3,308 people and organizations to that database, but probably could have added many more, according to a survey that investigators conducted recently.
Investigators surveyed the states to find out how often their Medicaid programs sanction a provider in a way that would in the vast majority of cases merit a spot in the IG's exclusion database. An astounding 61 percent of the 4,319 sanctions imposed by state Medicaid agencies in 2004 and 2005 could not be found in the federal database.
States with high match rates tended to be states that took action against more than 100 health care providers, though that wasn't always the case. Alabama, Louisiana and Texas had the highest match rates. More than 80 percent of the providers suspended from their state Medicaid programs could be found on the national list.
However, the two states that suspended the largest number of providers, New York and Florida, had the lowest matching rates, 21 percent and 9 percent respectively.
About a dozen states submitted incomplete data or reported not taking any action against health care providers in 2004 and 2005. Among them were California and Michigan, two states with large Medicaid populations.
Jeff Nelligan, a spokesman for the Centers for Medicare and Medicaid Services, said the agency agrees there's room to increase the number of referrals from the states. It will "strive to reduce the barriers that may currently exist," he added.
In all, 47 states responded to the survey. State officials frequently said they were unclear about what kind of information was supposed to be forwarded to the HHS inspector general.
"It would be handy to have a little cheat sheet that clearly stated refer these cases with this info," an unidentified state official wrote.
Another state official wrote that until they had responded to the inspector general's survey, "no coordinated effort existed ... to make referrals."
Reasons for exclusion from federal health programs include convictions for fraud and patient abuse, licensing board sanctions and default on federal health education loans. Under law, no federal payment can be made for anything that an excluded person furnishes, orders or prescribes.
http://www.huffingtonpost.com/huff-wires/20080812/health-fraud/
That is the real answer. But maybe, for starters, we need to connect dots to the BIG POLICY MAKERS and their connection to FRAUD,i.e. Frist, Bush, Rainwater & Moore!
Go to the NCFE trial in Dublin, Ohio that DOJ would like to behave as this case is over, while the Co-Founder and a 3uear EXECUTIVE, James K Happ, has yet to go to trial? Now , you ask how this is connected........??????
http://biggerthanenron.blogspot.com
Now wwhy do you think this is?"...states submitted incomplete data or reported not taking any action against health care providers in 2004 and 2005."
"...In violation of federal law, states routinely fail to notify federal authorities when they've kicked health care providers out of their Medicaid programs for incompetence, fraud and other reasons,..."
"...61 percent of the 4,319 sanctions imposed by state Medicaid agencies in 2004 and 2005 could not be found in the federal database."
"...two states that suspended the largest number of providers, New York and Florida, had the lowest matching rates,21 percent and 9 percent respectively."
WASHINGTON — In violation of federal law, states routinely fail to notify federal authorities when they've kicked health care providers out of their Medicaid programs for incompetence, fraud and other reasons, government investigators have found.
The lack of notice makes it easier for barred providers to set up shop in other states and to continue getting payments from federal health programs.
The inspector general for the Health and Human Services Department maintains the list of health care providers prohibited from getting any federal health reimbursements. Last year, the IG's office added 3,308 people and organizations to that database, but probably could have added many more, according to a survey that investigators conducted recently.
Investigators surveyed the states to find out how often their Medicaid programs sanction a provider in a way that would in the vast majority of cases merit a spot in the IG's exclusion database. An astounding 61 percent of the 4,319 sanctions imposed by state Medicaid agencies in 2004 and 2005 could not be found in the federal database.
States with high match rates tended to be states that took action against more than 100 health care providers, though that wasn't always the case. Alabama, Louisiana and Texas had the highest match rates. More than 80 percent of the providers suspended from their state Medicaid programs could be found on the national list.
However, the two states that suspended the largest number of providers, New York and Florida, had the lowest matching rates, 21 percent and 9 percent respectively.
About a dozen states submitted incomplete data or reported not taking any action against health care providers in 2004 and 2005. Among them were California and Michigan, two states with large Medicaid populations.
Jeff Nelligan, a spokesman for the Centers for Medicare and Medicaid Services, said the agency agrees there's room to increase the number of referrals from the states. It will "strive to reduce the barriers that may currently exist," he added.
In all, 47 states responded to the survey. State officials frequently said they were unclear about what kind of information was supposed to be forwarded to the HHS inspector general.
"It would be handy to have a little cheat sheet that clearly stated refer these cases with this info," an unidentified state official wrote.
Another state official wrote that until they had responded to the inspector general's survey, "no coordinated effort existed ... to make referrals."
Reasons for exclusion from federal health programs include convictions for fraud and patient abuse, licensing board sanctions and default on federal health education loans. Under law, no federal payment can be made for anything that an excluded person furnishes, orders or prescribes.
http://www.huffingtonpost.com/huff-wires/20080812/health-fraud/
Wednesday, August 13, 2008
Healthcare & Investment Firms......Canyou connect this one?
Below is an exerpt posted in this week's Newsweek : http://www.newsweek.com/id/151727/page/2
The Pickens Profile You Haven't Read
Pickens likes to portray his years as a corporate buccaneer during the 1980s as "shareholder activism." When Mesa fell into a cash crisis in the mid '90s after the price of natural gas collapsed, there was no mercy for him on Wall Street. Pickens called in Texas financier Richard Rainwater, and his wife and business partner, Darla Moore, to help raise capital. (Rainwater helped another oilman, George W. Bush, escape his money problems by making him co-owner of the Texas Rangers, a deal that eventually made Bush a multimillionaire.)
Moore, a leveraged-buyout specialist dubbed "the Toughest Babe in the Business" by Fortune, tried to raise $1 billion on Wall Street for Mesa. "I found out there wasn't a bank in the country that would touch the deal if Boone was CEO," Moore told NEWSWEEK. "I tried to soften the message [but] he was really surprised. 'But I get along with all those guys,' is what he said." The Rainwaters worked out a deal for Pickens to retire as CEO, and bought him out, a deal that still rankles the billionaire. Moore whooped with surprise when told by a NEWSWEEK reporter that Pickens had compared her in his book to a "wolverine that pisses on everything it doesn't eat." Moore responds, "I think what people don't know about Boone is that deep down he is actually—I hate to say this—a nice man. And he knows more about energy than anybody in the world."
Just a little insight to Darla Moore;
Darla Moore In 1981, at Chemical Bank in New York, Moore and Conway were focused on a new idea: loaning money to corporations
teetering on the brink of bankruptcy,
Soon after, she met and married Rainwater, who made her president of his investment company. They now had $500 million to put wherever they wanted.That's when she pushed T. Boone Pickens out . . . and then to a hard look at Rick Scott.
Scott was Rainwater's good friend. They had bought two hospitals in Texas and shared a vision: a nationwide chain of hospitals using cost controls.
By 1997, Scott's company, Columbia/HCA, was the nation's largest managed care provider.
But Moore said Scott was unwise to ignore subordinates who questioned his practices and foolish to dismiss a federal investigation of how Columbia billed Medicare.
According to the SEC Form :
Med Diversified Inc.
Annual Meeting Of Stockholders
September 9, 2003
JAMES K. HAPP has served as chief executive officer of our subsidiary, Tender Loving Care Health Care Services, Inc., since October 2002.
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency. (1999-2002 by deduction of SEC statement)
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations (At least1997 until 1999)
Participated in the "DIVESTITURE"...Where did this divestiture 'divest' to?
The Pickens Profile You Haven't Read
Pickens likes to portray his years as a corporate buccaneer during the 1980s as "shareholder activism." When Mesa fell into a cash crisis in the mid '90s after the price of natural gas collapsed, there was no mercy for him on Wall Street. Pickens called in Texas financier Richard Rainwater, and his wife and business partner, Darla Moore, to help raise capital. (Rainwater helped another oilman, George W. Bush, escape his money problems by making him co-owner of the Texas Rangers, a deal that eventually made Bush a multimillionaire.)
Moore, a leveraged-buyout specialist dubbed "the Toughest Babe in the Business" by Fortune, tried to raise $1 billion on Wall Street for Mesa. "I found out there wasn't a bank in the country that would touch the deal if Boone was CEO," Moore told NEWSWEEK. "I tried to soften the message [but] he was really surprised. 'But I get along with all those guys,' is what he said." The Rainwaters worked out a deal for Pickens to retire as CEO, and bought him out, a deal that still rankles the billionaire. Moore whooped with surprise when told by a NEWSWEEK reporter that Pickens had compared her in his book to a "wolverine that pisses on everything it doesn't eat." Moore responds, "I think what people don't know about Boone is that deep down he is actually—I hate to say this—a nice man. And he knows more about energy than anybody in the world."
Just a little insight to Darla Moore;
Darla Moore In 1981, at Chemical Bank in New York, Moore and Conway were focused on a new idea: loaning money to corporations
teetering on the brink of bankruptcy,
Soon after, she met and married Rainwater, who made her president of his investment company. They now had $500 million to put wherever they wanted.That's when she pushed T. Boone Pickens out . . . and then to a hard look at Rick Scott.
Scott was Rainwater's good friend. They had bought two hospitals in Texas and shared a vision: a nationwide chain of hospitals using cost controls.
By 1997, Scott's company, Columbia/HCA, was the nation's largest managed care provider.
But Moore said Scott was unwise to ignore subordinates who questioned his practices and foolish to dismiss a federal investigation of how Columbia billed Medicare.
According to the SEC Form :
Med Diversified Inc.
Annual Meeting Of Stockholders
September 9, 2003
JAMES K. HAPP has served as chief executive officer of our subsidiary, Tender Loving Care Health Care Services, Inc., since October 2002.
Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency. (1999-2002 by deduction of SEC statement)
Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations (At least1997 until 1999)
Participated in the "DIVESTITURE"...Where did this divestiture 'divest' to?
Saturday, August 2, 2008
PhyAmerica Physician Group Case connect to NCFE
Judge Warns of Fines in PhyAmerica Physician Group Case.
Publication: Knight Ridder/Tribune Business News
Date: Saturday, January 24 2004
By Jean P. Fisher, The News & Observer, Raleigh, N.C. Knight Ridder/Tribune Business News
Jan. 24--A Maryland judge has warned Dr. Steven M. Scott, former owner of PhyAmerica in Durham, that he will face a $50,000-per-violation fine each time he or his associates seek to lure the company's contract physicians and clients to Scott's new competing business.
Baltimore bankruptcy court Judge E. Stephen Derby, who has presided over PhyAmerica's reorganization under Chapter 11 bankruptcy protection for 14 months, on Wednesday found that Scott had violated a
Publication: Knight Ridder/Tribune Business News
Date: Saturday, January 24 2004
By Jean P. Fisher, The News & Observer, Raleigh, N.C. Knight Ridder/Tribune Business News
Jan. 24--A Maryland judge has warned Dr. Steven M. Scott, former owner of PhyAmerica in Durham, that he will face a $50,000-per-violation fine each time he or his associates seek to lure the company's contract physicians and clients to Scott's new competing business.
Baltimore bankruptcy court Judge E. Stephen Derby, who has presided over PhyAmerica's reorganization under Chapter 11 bankruptcy protection for 14 months, on Wednesday found that Scott had violated a
Monday, July 21, 2008
James K. Happ
JULY 16, 2008 11:43AM
Healthcare co. exec sells in Palm Beach Gardens
by C.J. Marks, BlockShopper Staff
42 Bermuda Lake Dr.James K. Happ and his wife, Julie, sold a home at 42 Bermuda Lake Drive in Palm Beach Gardens to Charles and Andrea Hirsch for $789,000 on June 23.
The Happs paid $590,000 for the property in Sept. 2003.
Mr. Happ, a certified public accountant, has served as president of Med Diversified, Inc., a provider of home healthcare services based in Andover, Mass. He was named to the position in 2002.
Before he joined Med Diversified, he served as executive vice president of National Century Financial Enterprises, a healthcare financing company and major lender of Med Diversified. He has also served as chief financial officer of Dallas-based Columbia Homecare Group, Inc.
He earned a B.S. in business administration from Miami University in Oxford, Ohio. He holds an M.B.A. from Nova University in Ft. Lauderdale.
The Haps bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 on June 24.
Home sales in Palm beach Gardens dropped nearly 14 percent in 2008 versus sales in 2007. The median sales price also fell from $320,000 to $290,000.
Address: 42 Bermuda Lake Drive
Buyer(s): Charles J Hirsch and Andrea F Hirsch
Seller(s): James K Happ and Julie K Happ
Sale date: 2008-06-23
Healthcare co. exec sells in Palm Beach Gardens
by C.J. Marks, BlockShopper Staff
42 Bermuda Lake Dr.James K. Happ and his wife, Julie, sold a home at 42 Bermuda Lake Drive in Palm Beach Gardens to Charles and Andrea Hirsch for $789,000 on June 23.
The Happs paid $590,000 for the property in Sept. 2003.
Mr. Happ, a certified public accountant, has served as president of Med Diversified, Inc., a provider of home healthcare services based in Andover, Mass. He was named to the position in 2002.
Before he joined Med Diversified, he served as executive vice president of National Century Financial Enterprises, a healthcare financing company and major lender of Med Diversified. He has also served as chief financial officer of Dallas-based Columbia Homecare Group, Inc.
He earned a B.S. in business administration from Miami University in Oxford, Ohio. He holds an M.B.A. from Nova University in Ft. Lauderdale.
The Haps bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 on June 24.
Home sales in Palm beach Gardens dropped nearly 14 percent in 2008 versus sales in 2007. The median sales price also fell from $320,000 to $290,000.
Address: 42 Bermuda Lake Drive
Buyer(s): Charles J Hirsch and Andrea F Hirsch
Seller(s): James K Happ and Julie K Happ
Sale date: 2008-06-23
Saturday, July 5, 2008
James K. Happ , CFO at Columbia Homecare Group Inc. in Dallas
Getting ready to avoid confiscation?
Before his BIG TRIAL in October regarding the FRAUD at NCFE, PAY ATTENTION!!!
JULY 2, 2008 1:00PM
Healthcare veteran spends $540K for Palm Beach Gardens home
by Dan Fey, BlockShopper Staff
James K. Happ and his wife, Julie, bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 from Kenco Communities At Mirasol Inc. on June 24.
Mr. Happ has served as the president of Med Diversified Inc., a national provider of home and alternate site health care services. He was appointed to the position in Oct 2002, and has also served as the CEO of the company's subsidiary, Tender Loving Care Health Care Services, Inc.
He's previously served as the chief financial officer at the Columbia Homecare Group Inc. in Dallas and in various executive positions with Interim Services, Inc., a Florida-based staffing and home care company.
He earned his M.B.A. from Nova Southeastern University and his bachelor's in business administration from Miami University in Oxford, Ohio.
Home sales in Palm Beach Gardens have dropped 14.4 percent thus far in 2008. The median sale price has also dropped from $320,000 in 2007 to $290,000 so far this year.
Address: 112 Via Escobar Place
Buyer(s): James K Happ and Julie K Happ
Seller(s): Kenco Communities At Mirasol Inc
Sale date: 2008-06-24
Before his BIG TRIAL in October regarding the FRAUD at NCFE, PAY ATTENTION!!!
JULY 2, 2008 1:00PM
Healthcare veteran spends $540K for Palm Beach Gardens home
by Dan Fey, BlockShopper Staff
James K. Happ and his wife, Julie, bought a home at 112 Via Escobar Place in Palm Beach Gardens for $540,000 from Kenco Communities At Mirasol Inc. on June 24.
Mr. Happ has served as the president of Med Diversified Inc., a national provider of home and alternate site health care services. He was appointed to the position in Oct 2002, and has also served as the CEO of the company's subsidiary, Tender Loving Care Health Care Services, Inc.
He's previously served as the chief financial officer at the Columbia Homecare Group Inc. in Dallas and in various executive positions with Interim Services, Inc., a Florida-based staffing and home care company.
He earned his M.B.A. from Nova Southeastern University and his bachelor's in business administration from Miami University in Oxford, Ohio.
Home sales in Palm Beach Gardens have dropped 14.4 percent thus far in 2008. The median sale price has also dropped from $320,000 in 2007 to $290,000 so far this year.
Address: 112 Via Escobar Place
Buyer(s): James K Happ and Julie K Happ
Seller(s): Kenco Communities At Mirasol Inc
Sale date: 2008-06-24
Friday, February 29, 2008
Can Anyone even begin to figure this out?
Labor of Love
By Mike Vogel - 11/1/2005
Among the predictable trappings in the Coral Gables office of Stephen Dresnick -- family photos, a picture with Jeb Bush, a few mementos -- are a pair of bright reddish-orange boxing gloves that a friend gave him.
They were a prescient gift for a doctor who's ended up with a big fight on his hands. Sterling Healthcare, which supplies emergency room docs to hospitals, has survived the bankruptcies of two parent companies and is back in the hands of Dresnick, its founder. "I built the company. I sold it. It didn't quite work out the way I had hoped. Very few people get a second chance. I consider myself very, very fortunate to, first, get my company back and, secondly, to have a second go at creating value."
But to rebuild Sterling -- and rejoin the club of major doctor-management companies making money in Florida -- Dresnick has had to brawl with another doctor-entrepreneur who lost ownership of it but refuses to throw in the towel.
Dresnick, 54, is a veteran of Florida's medical entrepreneur scene. A Miami native, he graduated Phi Beta Kappa in premed from the University of North Carolina at Chapel Hill, graduated from the University of Miami med school and completed his residency at UCLA in 1980 en route to becoming one of the first board-certified emergency specialists. He founded the emergency medicine doctor training residency program at Orlando Regional Medical Center.
Dr. Stephen Dresnick founded Sterling in 1987 to help hospitals staff and manage emergency rooms. He sold the successful company in 1996, but the company that bought it foundered.He retains a certain ER, straight-to-the-point manner when talking about his field of expertise, whether it's finances or medical practice. For example, he says flatly, "In our experience, the No. 1 reason for malpractice suits is malpractice. After 20 to 30 years, we know not to do certain things that the young people coming out of residency still have to learn."
Tired of commuting from Miami to Orlando, Dresnick founded Sterling in Coral Gables in 1987 to help hospitals staff and manage their ERs -- for a profit. He recruited doctors, paid them, scheduled them and handled their billings. He did well enough at clinical outsourcing to take Sterling public in 1994.
A similar, separate company to handle billing, collections, cash management and payroll processing for 26 orthodontics practices flopped, but Sterling continued to prosper. From 1990 to 1995, it grew from $15.7 million in revenue to $115.7 million and from break-even to a $2.8-million profit. Sterling numbered 1,000 doctors, 101 ERs and 1.3 million patients annually. In 1996, Dresnick was named Ernst & Young's Florida Healthcare Entrepreneur of the Year.
That same year, San Diego-based FPA Medical Management, a fast-growing managed care company, bought Sterling for roughly double its stock price. Dresnick says he thought FPA's "value proposition was faulty from the very beginning. Nobody really had had a lot of experience in understanding some of these things." But, he asks, "how do you turn down multiples like that for your shareholders?" Dresnick went along in the $220-million stock acquisition as vice chairman of the FPA board. And he continued to run Sterling, getting $1 million to extend his contract and making, on paper,
$20 million in stock gains.
"Today I think managed care is nothing what we thought it would be," Dresnick says. "We thought it was going to take over the world, and it hasn't."
FPA certainly didn't. Fueled by investors, firms like FPA bid up prices -- and overpaid -- for practices and management companies. The hoped-for streamlining and cost-controls didn't materialize. "They had spent too much for the physician practices, and it wasn't enough value added," says longtime healthcare analyst Robert Wasserman, research director at Sky Capital in Boca Raton.
Dresnick, whose stock was worth $78.5 million at the peak, watched it sink. The stock he held on to eventually became worthless. "You live by the sword, you die by the sword," he says. "I think greed and avarice did them in." FPA's chief financial officer was convicted of fraud but, Dresnick says, FPA's biggest problem was that it didn't have the structure and experience to handle its own growth.
As FPA began to fail in 1998, Dresnick was named chief executive and led the firm's decision to file for bankruptcy -- the first by a major physician practice-management firm. The only viable business FPA could sell to pay its debts was Sterling. The best offer, valued at $110 million in cash and assumed liabilities, came from Coastal Physician Group, a Durham, N.C., company run by Steven Scott.
Butting heads
Like Dresnick, Scott was North Carolina-educated (Duke University) and a doctor (Ob-Gyn) who had seen opportunity in ERs. He founded Coastal in 1977 and moved beyond ERs into HMOs.
Dresnick and Scott were at odds once the deal was done. Dresnick says Scott told him he wanted him to stay on to run Sterling, then tried to lock him out of his office after the sale closed. "That's the first time I got an inkling of who the real Steve Scott was," Dresnick says.
Dr. Steven Scott bought Dresnick's company, Sterling, when its parent company ran into financial trouble. From the beginning, he and Dresnick were at odds.Scott says he never told Dresnick he would stay on and gave him four weeks to clear out. It would not be the last time they sparred over the facts. "It was a very sensitive time," Scott says. "We were trying to be compassionate."
Dresnick, bound by a three-year non-compete agreement, stayed out of the ER staffing ring and spent a lot of time fishing and learning about technology. He also started a medical billings company. Meanwhile, Scott looked to Sterling to make his money-losing Coastal profitable. In ER contracts, they were similar in size -- 151 contracts at Coastal to Sterling's 129. Scott assumed he could cut Sterling's overhead -- eliminating its executive staff, for one -- and get more production from the doctors.
He was right about the staff, wrong about the doctors. The company, renamed PhyAmerica Physician Group, later claimed that Sterling doctors, accustomed to a flat hourly wage with Sterling, resisted being moved to a productivity-pay system. The Sterling acquisition proved as unprofitable as the rest of PhyAmerica. (Dresnick says he's baffled by PhyAmerica's reported history. He says Sterling always was profitable.)
To keep afloat, PhyAmerica sold its receivables to Dublin, Ohio-based National Century Financial Enterprises. But the money from the sales didn't cover PhyAmerica's cash needs, so PhyAmerica also sold receivables for business it had performed, but not billed for, and for business it hoped to do -- to the tune of $186.5 million by 2001. The company lost $328.2 million over five years, investors fled and Scott took the company private in 2002, buying the shares he didn't own for 15 cents apiece.
National Century failed in November 2002, and PhyAmerica followed it into bankruptcy court. A PhyAmerica creditors attorney, Joel Sher of Baltimore, says creditors will recover just "pennies on the dollar."
Some of those pennies were to come from the sale of Sterling. Scott wanted it back. Dresnick did too.
Dresnick says the entrepreneur in him drove the decision: "We do what we do because we love what we do." After a 17-hour court proceeding in 2003, Dresnick, backed by a New York investment firm, won the decision with a bid valued at $90.5 million. He says he expected to rebuild the company "in what I thought was a relatively painless way, but it didn't work out that way."
Uproar
Indeed, Dresnick took a punch right away -- a low blow, as he sees it. One of Sterling's biggest profit centers was its three contracts with the Fort Lauderdale-based North Broward Hospital District, a government body that runs four major hospitals and styles itself one of the five largest public healthcare systems in the nation. The contracts represented $8 million in annual profit, according to Dres-nick. He says that Scott, although bound by a non-compete agreement, set up new corporate entities, cut a deal with the district to replace Sterling on the contracts and lured Sterling's doctors away with promises to indemnify them from legal action for breaking their non-competes with Sterling. "We've always competed, and up until this time we always competed on a fair basis," Dresnick says.
The deal created a tempest in Broward. Local newspapers noted that Scott is a prominent contributor to Republican causes and that Gov. Jeb Bush had appointed all the district board members. Also, a Scott attorney, Bill Scherer in Fort Lauderdale, happened to be the district's general counsel. J. Luis Rodriguez, the board chairman at the time, now says Scherer had an "obvious" conflict of interest and that Scott shouldn't have the contract.
Scherer's firm lost the district's business in August. Scherer's spokesman, Kevin Boyd, says Scherer had no conflict because he didn't make a recommendation on the contracts and because he didn't represent Scott or the district -- Scherer brought in another firm for the district -- on the contracts.
A bankruptcy court judge found Scott in contempt of an injunction barring him from meeting with Sterling employees and interfering with its contracts. Lawyers for PhyAmerica's creditors sued Scott, his companies and the district in bankruptcy court in Baltimore; Dresnick sued earlier this year in Broward Circuit Court. Scott "and I certainly don't share the same value system," Dresnick says. "I don't think Steve Scott believes the rules are made for him."
Scott denies doing wrong. One of his attorneys, Scott Baena, says the district made it clear before Dresnick won Sterling back that it wouldn't extend Sterling's contract and that the contempt order dealt not with the lost contracts but with meetings Scott had with a few Sterling doctors.
With his baby back, Dresnick moved to get it healthy. With the North Broward chunk of Sterling's revenue and profit gone, Dresnick quickly laid off 200 Sterling employees in its former North Carolina headquarters. Learning from FPA and Coastal, he plans to avoid debt and intimates a public offering may come. He has expanded Sterling into pediatricians, hospitalists -- doctors who specialize in hospital care -- radiologists and anesthesiologists. He projects $275 million to $300 million in revenue this year and says the company became profitable in the second half of last year. It has nearly 2,000 doctors, 215 ERs and a way to go before it can contend against clinical outsourcing heavyweight Team Health, based in Knoxville, Tenn., which posted $1.6 billion in revenue last year and has 450 hospital contracts nationally and contracts to run 23 ERs in Florida.
Guidance
A selling point in winning new contracts will be bringing technology to a field where much is still tracked on grease boards. Dresnick says Sterling is developing software that enables doctors to write prescriptions and discharge instructions, keep medical records and provide correct insurance-coded billing information to billing offices -- all electronically.
The software also provides guidance from lessons learned from two decades of malpractice complaints. For instance, ER doctors seeing a 50-year-old man complaining of back pain will be instructed to check for a ruptured aortic aneurysm.
"I've always been enamored with technology," says Dresnick. "That's what turns me on. I can sit here all day long and think of these things, but if I don't have an organization to implement them, they're just thoughts."
Why not start anew rather than rebuild Sterling? "I'm too old. Once you run a big company, it's very hard to start all over. The things you did when you were in your 30s and 40s aren't so easy anymore -- and you don't have to."
Clinical Outsourcing / Practice Management
PainCare Holdings, Orlando, a 310-employee pain management company, acquires practices and sells services to independent practices. Under CEO and co-founder Randy Lubinsky, it has grown quickly since its start in 2000. The company expects to show a $14-million to $14.5-million profit this year on $59 million to $60 million in revenue.
Pediatrix Medical Group, Sunrise, specializing in neonatal care and high-risk pregnancies, was founded in 1979 as a two-doctor practice in Fort Lauderdale. Under co-founder and CEO Roger J. Medel, an M.D. and MBA, it has grown to staff more than 220 neonatal intensive care units nationally and has 800 doctors (625 neonatal care) in 32 states and Puerto Rico. Describing itself as a "national group practice," the company also does research and claims the world's largest neonatal database. Last year, it turned a $98.3-million profit on $619.6 million in revenue.
AmeriPath, Palm Beach Gardens, a pathology company, last year had $1.5 million in profit on $507.3 million in revenue. Owned by New York private equity investment firm Welsh, Carson, Anderson & Stowe, AmeriPath has 400 pathologists, 15 regional labs, 36 satellite labs and performs in-patient diagnostic and medical director services at more than 200 hospitals.
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© Copyright 2008 Florida Trend All rights Reserved.
By Mike Vogel - 11/1/2005
Among the predictable trappings in the Coral Gables office of Stephen Dresnick -- family photos, a picture with Jeb Bush, a few mementos -- are a pair of bright reddish-orange boxing gloves that a friend gave him.
They were a prescient gift for a doctor who's ended up with a big fight on his hands. Sterling Healthcare, which supplies emergency room docs to hospitals, has survived the bankruptcies of two parent companies and is back in the hands of Dresnick, its founder. "I built the company. I sold it. It didn't quite work out the way I had hoped. Very few people get a second chance. I consider myself very, very fortunate to, first, get my company back and, secondly, to have a second go at creating value."
But to rebuild Sterling -- and rejoin the club of major doctor-management companies making money in Florida -- Dresnick has had to brawl with another doctor-entrepreneur who lost ownership of it but refuses to throw in the towel.
Dresnick, 54, is a veteran of Florida's medical entrepreneur scene. A Miami native, he graduated Phi Beta Kappa in premed from the University of North Carolina at Chapel Hill, graduated from the University of Miami med school and completed his residency at UCLA in 1980 en route to becoming one of the first board-certified emergency specialists. He founded the emergency medicine doctor training residency program at Orlando Regional Medical Center.
Dr. Stephen Dresnick founded Sterling in 1987 to help hospitals staff and manage emergency rooms. He sold the successful company in 1996, but the company that bought it foundered.He retains a certain ER, straight-to-the-point manner when talking about his field of expertise, whether it's finances or medical practice. For example, he says flatly, "In our experience, the No. 1 reason for malpractice suits is malpractice. After 20 to 30 years, we know not to do certain things that the young people coming out of residency still have to learn."
Tired of commuting from Miami to Orlando, Dresnick founded Sterling in Coral Gables in 1987 to help hospitals staff and manage their ERs -- for a profit. He recruited doctors, paid them, scheduled them and handled their billings. He did well enough at clinical outsourcing to take Sterling public in 1994.
A similar, separate company to handle billing, collections, cash management and payroll processing for 26 orthodontics practices flopped, but Sterling continued to prosper. From 1990 to 1995, it grew from $15.7 million in revenue to $115.7 million and from break-even to a $2.8-million profit. Sterling numbered 1,000 doctors, 101 ERs and 1.3 million patients annually. In 1996, Dresnick was named Ernst & Young's Florida Healthcare Entrepreneur of the Year.
That same year, San Diego-based FPA Medical Management, a fast-growing managed care company, bought Sterling for roughly double its stock price. Dresnick says he thought FPA's "value proposition was faulty from the very beginning. Nobody really had had a lot of experience in understanding some of these things." But, he asks, "how do you turn down multiples like that for your shareholders?" Dresnick went along in the $220-million stock acquisition as vice chairman of the FPA board. And he continued to run Sterling, getting $1 million to extend his contract and making, on paper,
$20 million in stock gains.
"Today I think managed care is nothing what we thought it would be," Dresnick says. "We thought it was going to take over the world, and it hasn't."
FPA certainly didn't. Fueled by investors, firms like FPA bid up prices -- and overpaid -- for practices and management companies. The hoped-for streamlining and cost-controls didn't materialize. "They had spent too much for the physician practices, and it wasn't enough value added," says longtime healthcare analyst Robert Wasserman, research director at Sky Capital in Boca Raton.
Dresnick, whose stock was worth $78.5 million at the peak, watched it sink. The stock he held on to eventually became worthless. "You live by the sword, you die by the sword," he says. "I think greed and avarice did them in." FPA's chief financial officer was convicted of fraud but, Dresnick says, FPA's biggest problem was that it didn't have the structure and experience to handle its own growth.
As FPA began to fail in 1998, Dresnick was named chief executive and led the firm's decision to file for bankruptcy -- the first by a major physician practice-management firm. The only viable business FPA could sell to pay its debts was Sterling. The best offer, valued at $110 million in cash and assumed liabilities, came from Coastal Physician Group, a Durham, N.C., company run by Steven Scott.
Butting heads
Like Dresnick, Scott was North Carolina-educated (Duke University) and a doctor (Ob-Gyn) who had seen opportunity in ERs. He founded Coastal in 1977 and moved beyond ERs into HMOs.
Dresnick and Scott were at odds once the deal was done. Dresnick says Scott told him he wanted him to stay on to run Sterling, then tried to lock him out of his office after the sale closed. "That's the first time I got an inkling of who the real Steve Scott was," Dresnick says.
Dr. Steven Scott bought Dresnick's company, Sterling, when its parent company ran into financial trouble. From the beginning, he and Dresnick were at odds.Scott says he never told Dresnick he would stay on and gave him four weeks to clear out. It would not be the last time they sparred over the facts. "It was a very sensitive time," Scott says. "We were trying to be compassionate."
Dresnick, bound by a three-year non-compete agreement, stayed out of the ER staffing ring and spent a lot of time fishing and learning about technology. He also started a medical billings company. Meanwhile, Scott looked to Sterling to make his money-losing Coastal profitable. In ER contracts, they were similar in size -- 151 contracts at Coastal to Sterling's 129. Scott assumed he could cut Sterling's overhead -- eliminating its executive staff, for one -- and get more production from the doctors.
He was right about the staff, wrong about the doctors. The company, renamed PhyAmerica Physician Group, later claimed that Sterling doctors, accustomed to a flat hourly wage with Sterling, resisted being moved to a productivity-pay system. The Sterling acquisition proved as unprofitable as the rest of PhyAmerica. (Dresnick says he's baffled by PhyAmerica's reported history. He says Sterling always was profitable.)
To keep afloat, PhyAmerica sold its receivables to Dublin, Ohio-based National Century Financial Enterprises. But the money from the sales didn't cover PhyAmerica's cash needs, so PhyAmerica also sold receivables for business it had performed, but not billed for, and for business it hoped to do -- to the tune of $186.5 million by 2001. The company lost $328.2 million over five years, investors fled and Scott took the company private in 2002, buying the shares he didn't own for 15 cents apiece.
National Century failed in November 2002, and PhyAmerica followed it into bankruptcy court. A PhyAmerica creditors attorney, Joel Sher of Baltimore, says creditors will recover just "pennies on the dollar."
Some of those pennies were to come from the sale of Sterling. Scott wanted it back. Dresnick did too.
Dresnick says the entrepreneur in him drove the decision: "We do what we do because we love what we do." After a 17-hour court proceeding in 2003, Dresnick, backed by a New York investment firm, won the decision with a bid valued at $90.5 million. He says he expected to rebuild the company "in what I thought was a relatively painless way, but it didn't work out that way."
Uproar
Indeed, Dresnick took a punch right away -- a low blow, as he sees it. One of Sterling's biggest profit centers was its three contracts with the Fort Lauderdale-based North Broward Hospital District, a government body that runs four major hospitals and styles itself one of the five largest public healthcare systems in the nation. The contracts represented $8 million in annual profit, according to Dres-nick. He says that Scott, although bound by a non-compete agreement, set up new corporate entities, cut a deal with the district to replace Sterling on the contracts and lured Sterling's doctors away with promises to indemnify them from legal action for breaking their non-competes with Sterling. "We've always competed, and up until this time we always competed on a fair basis," Dresnick says.
The deal created a tempest in Broward. Local newspapers noted that Scott is a prominent contributor to Republican causes and that Gov. Jeb Bush had appointed all the district board members. Also, a Scott attorney, Bill Scherer in Fort Lauderdale, happened to be the district's general counsel. J. Luis Rodriguez, the board chairman at the time, now says Scherer had an "obvious" conflict of interest and that Scott shouldn't have the contract.
Scherer's firm lost the district's business in August. Scherer's spokesman, Kevin Boyd, says Scherer had no conflict because he didn't make a recommendation on the contracts and because he didn't represent Scott or the district -- Scherer brought in another firm for the district -- on the contracts.
A bankruptcy court judge found Scott in contempt of an injunction barring him from meeting with Sterling employees and interfering with its contracts. Lawyers for PhyAmerica's creditors sued Scott, his companies and the district in bankruptcy court in Baltimore; Dresnick sued earlier this year in Broward Circuit Court. Scott "and I certainly don't share the same value system," Dresnick says. "I don't think Steve Scott believes the rules are made for him."
Scott denies doing wrong. One of his attorneys, Scott Baena, says the district made it clear before Dresnick won Sterling back that it wouldn't extend Sterling's contract and that the contempt order dealt not with the lost contracts but with meetings Scott had with a few Sterling doctors.
With his baby back, Dresnick moved to get it healthy. With the North Broward chunk of Sterling's revenue and profit gone, Dresnick quickly laid off 200 Sterling employees in its former North Carolina headquarters. Learning from FPA and Coastal, he plans to avoid debt and intimates a public offering may come. He has expanded Sterling into pediatricians, hospitalists -- doctors who specialize in hospital care -- radiologists and anesthesiologists. He projects $275 million to $300 million in revenue this year and says the company became profitable in the second half of last year. It has nearly 2,000 doctors, 215 ERs and a way to go before it can contend against clinical outsourcing heavyweight Team Health, based in Knoxville, Tenn., which posted $1.6 billion in revenue last year and has 450 hospital contracts nationally and contracts to run 23 ERs in Florida.
Guidance
A selling point in winning new contracts will be bringing technology to a field where much is still tracked on grease boards. Dresnick says Sterling is developing software that enables doctors to write prescriptions and discharge instructions, keep medical records and provide correct insurance-coded billing information to billing offices -- all electronically.
The software also provides guidance from lessons learned from two decades of malpractice complaints. For instance, ER doctors seeing a 50-year-old man complaining of back pain will be instructed to check for a ruptured aortic aneurysm.
"I've always been enamored with technology," says Dresnick. "That's what turns me on. I can sit here all day long and think of these things, but if I don't have an organization to implement them, they're just thoughts."
Why not start anew rather than rebuild Sterling? "I'm too old. Once you run a big company, it's very hard to start all over. The things you did when you were in your 30s and 40s aren't so easy anymore -- and you don't have to."
Clinical Outsourcing / Practice Management
PainCare Holdings, Orlando, a 310-employee pain management company, acquires practices and sells services to independent practices. Under CEO and co-founder Randy Lubinsky, it has grown quickly since its start in 2000. The company expects to show a $14-million to $14.5-million profit this year on $59 million to $60 million in revenue.
Pediatrix Medical Group, Sunrise, specializing in neonatal care and high-risk pregnancies, was founded in 1979 as a two-doctor practice in Fort Lauderdale. Under co-founder and CEO Roger J. Medel, an M.D. and MBA, it has grown to staff more than 220 neonatal intensive care units nationally and has 800 doctors (625 neonatal care) in 32 states and Puerto Rico. Describing itself as a "national group practice," the company also does research and claims the world's largest neonatal database. Last year, it turned a $98.3-million profit on $619.6 million in revenue.
AmeriPath, Palm Beach Gardens, a pathology company, last year had $1.5 million in profit on $507.3 million in revenue. Owned by New York private equity investment firm Welsh, Carson, Anderson & Stowe, AmeriPath has 400 pathologists, 15 regional labs, 36 satellite labs and performs in-patient diagnostic and medical director services at more than 200 hospitals.
--------------------------------------------------------------------------------
© Copyright 2008 Florida Trend All rights Reserved.
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