Reason for Dispute
“Fifteen years ago, medical doctors and chiropractors were competitors rather than colleagues, and didn’t work together to treat patients as they do now. Now it is standard practice. In addition, there was a regulation in certain states that ‘only a physician can hire a physician.’ In many states, there is no such regulation. To benefit patients in those states, in 1994 a group of attorneys created a corporate structure called ‘MD-DC’ (medical doctor-chiropractic doctor) and held seminars across the country teaching physicians and chiropractors how they could work together and still remain autonomous.
In the MD-PC structure, a chiropractor with a busy practice would lease office space to a physician, provide marketing services to the physician, provide medical equipment leasing, personnel services, billing services, administrative services, advertising services, etc. to the physician so that the two practices would in essence, be working together through a series of contracts. Both parties would benefit financially from the relationship; however the biggest beneficiary was the patient, who could now have a medical doctor, chiropractor and physical therapist working together under one roof. The only party who might not benefit was the insurance company, who would pay several health care providers for more comprehensive care on the same patient’s case.
Financial battle
Hundreds of physicians and chiropractics set up MD-DC practices all over the country. The entities were legally formed and still exist today; however in 2000, Insurance companies saw an opportunity to challenge the MD-DC corporate structure and reclaim millions of dollars from the practices by initiating civil suits against the doctors. In New York, the first civil suit was commenced by several insurers who banded together against 105 physicians and chiropractors; the insurers were asking for over $60M in refunds for services rendered over the past five years which they claimed violated a technical rule of law. A long financial battle began, and all the doctors hired lawyers to fight what they considered to be unfair claims practices. Unfortunately for me, with 15 locations and thousands of patients, my practices were the largest chain of offices in New York and attracted the most attention.
Although my case was virtually identical to all the other civil cases, there was an important difference: two of my employees were less than ethical. One employee accepted a bribe from an undercover agent, who offered him $1,000 to change (exaggerate) a medical injury report and put it in the mail. Another, a chiropractor running diagnostic tests for the physicians, in several cases submitted test results without actually doing the tests (out of sheer laziness!)
In the end, the two pleaded guilty to their acts and agreed to ‘cooperate’ against me and the medical director. We were forced to settle the case and ended up paying restitution on a percentage of claims from all the offices over five years ($2M). Given the situation, I was placed under a tremendous amount of pressure to settle. The considerable downside of fighting back, despite my belief that doing so would be the right thing to do was an enormous risk facing me and my family had I continued to litigate.
After the story appeared in the NY Times in 2001, many of the 105 doctors involved in the civil settled with insurers, agreeing to pay back a percentage of the funds in dispute. However, the MD-DC practice was never found to violate any state laws, and the practice is still used all over the country. Several years later, a number of doctors who had held out and litigated were able to get paid back the money that had been withheld by the insurers, with interest!
Bouncing Back after Hardship
After settling the case and paying back a significant amount to the insurance companies, I started on my new venture in medical weight loss. Starting with one employee, me and my co-founders created the largest network of physician weight loss centers in the US. It’s a good feeling to know that you can do it all again; that your success was not a fluke. Not only are we helping patients with weight loss and serious health problems, we have helped physicians practice better medicine by training them to focus on root cause of many of their patients’ problems, obesity. It’s amazing to see patients who no longer need to take diabetic and blood pressure medications because they were able to lose weight. It’s a great feeling!
The true measure of success is when you can bounce back from hardship and create another truly successful venture, back to back.”
In 2010 Andrew began consulting for CEO’s and corporations who wish to grow their businesses by expanding their online presence through interactive marketing and search engine optimization.