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The 150M Settlement

It doesn’t make me feel good to know that Amedisys has had an exceptionally poor quarter and has tentatively entered into an agreement with the Department of Justice for a 150M settlement. I admit I am a little curious about the reference to The Stark Self-Referral Matter referenced in Amedisys’s press release but not overly disturbed. What disheartens me is that I am no longer surprised by the fact that when I searched the Internet for information, there were hundreds of results that all reported on the stock price.  Nobody stopped to wonder how a 150M dollar settlement would affect the care that Amedisys is supposed to be providing to patients.

Does this mean that I do not agree with the settlement? I don’t know all the details but I think that if the Federal government is going to get between Amedisys and that much cash, a legitimate question arises about their ability to care for patients and compete in an overcrowded market.

Amedisys is clear that in paying 150M to the government that they are not admitting any wrongdoing. I do not believe that they are willingly entering into this agreement because they couldn’t figure out what to do with extra cash. Not admitting wrongdoing is not the same as denying any wrongdoing. If they stayed out of the grey areas, I suspect they would be more than willing to pay a fraction of that to good defense lawyers.

While I don’t know the specifics of the settlement, I do know that it takes a lot of money to care for patients. I may find a bullet in my head in the morning but I strongly believe that if Amedisys is to pay 150M to the feds then Amedisys should no longer be afforded the privilege of billing Medicare. There is no shortage of stellar, high performing agencies who could pick up the slack and most of these smaller players would have never been given another chance by Medicare.

Alternatively, if they have been assessed as compliant and capable of caring for patients then the feds should lessen the penalty to an amount that does not interfere with patient care.

Just sayin……

14 Comments Post a comment

  1. Amen sister!

    November 14, 2013
  2. B.P. #

    Just wondering aloud here, is it a good idea to have healthcare organizations as publicly traded entities to begin with? Public companies have one primary goal: to make the most money as possible and satisfy investors. Don’t get me wrong, I’m sure the clinicians in the local offices genuinely care for patients and want to do good. However, are the resources there to consistently take on the patients that are “over budget” types? It just doesn’t work into their business plans…..not that they can’t afford it. I’m sure their goals are high therapy low nursing types.

    November 14, 2013

    • I totally hate the notion of healthcare organizations being publicly traded because it adds one more regulatory body in an industry where there are already too many to count. The SEC has a host of requirements and auditing processes that are a real pain. It is also harder for a publicly traded company to decide to take a hit one quarter so they can have a better quarter next.

      And yet, I cannot come up with one legitimate reason why healthcare companies should be denied the same advantages of going public as other companies. Just because I don’t like something doesn’t mean it’s wrong. It should mean that but currently it does not.

      November 14, 2013

  3. Well said!

    November 14, 2013
  4. guydavis337 #

    You’re right J. I doubt that any agency could stand a $150 million hit to pay off the government unless they are publicly traded and make their money in the market. Thank you for being out there for all of us.

    November 14, 2013

    • Maybe its a symptom of some illness, Guy, but I rarely have a neutral opinion about anything:) I love home health and believe in it and I know you do, too. I also believe we can do more than we are doing as an industry and everyone needs to step up to the plate and do more in less time.


      November 14, 2013
      • guydavis337 #

        We’re working on it now with your help. Increased need + limited resources = opportunity to develop innovative disruption.

        November 14, 2013

  5. I am an administrator of a small company in Texas with 5 locations and our office is in the top 500 agencies in the nation on Homecare Elite and I can testify with all we do at our office for our patients out of my own employees pockets I would love to know how there net profit margins are sooooo high ??? Someone explain to me how they do it and provide the necessary care these sicker patient need coming out of hospitals ! I’ve been in the industry for > 26 years and have feast to famine in the companies I’ve worked for but ice never seen the net margins this high for home health in this economy !! Home health is reimbursed so little for NRS that it’s almost a death sentence to card for patients with wounds or ostomies …. Stark laws are not enforced or there would be no hospital , or rehab home healths . They self refer and get out patient money too. Of all the ways to care for a patient who has family and a place to live , home health remains be be the most cost effective . It makes smaller companies who do the right thing for the right patient at the right time impossible to stay a float …. Thanks for reading this

    November 14, 2013

    • You are welcome. Amedisys and other large companies do enjoy advantages that smaller companies do not and their margins are not reflective of the industry. This is troublesome when I read MedPac reports that state the margins of some companies are as high as 20 percent.

      Supplies are practically given to larger companies who buy a lot of them. Nurses who want the security of a larger company and benefits may work for a little less if they can stand the highly structured job. More importantly, they have a corporate headquarters that does billing, IT, designs programs, educates nurses, writes and implements policies and procedures.

      Home health is not only more cost effective but it is where patients want to do be. Everyone knows the effects of stress on the body. Is there anything more stressful for an aging person than being in a large, cold hospital where nobody has a familiar face? Being at home speeds up healing and reduces stress.

      It is not impossible for you to stay afloat. You can take excellent care of your patients and make a modest but decent profit. Remember what it is you sell for a living – nursing care. Now imagine if Apple sold the same computers they made ten years ago. Go invest in your nursing staff!

      Be conservative with all resources and when somebody exacerbates be all over them like a swat team. Can’t afford telemedicine? So what. Call the patients between visits to check their weights. Good nurses always find a way but it is also true that there is nothing about being a good nurse that makes one a good business person. But you can learn business whereas nurses are born with a heart that beats differently than all the other hearts on the planet.

      Thank you for taking the time to comment. I do understand how frustrated you are. For the first time since Haydel Consulting opened, I have been downright afraid for our industry.

      November 14, 2013
    • Jackie Bush #

      I am the Director of a Hospital based Home Health agency and your statement that hospital based home health agencies violate Stark laws is a generalization that is far from the truth. Hospital based agencies are struggling to compete with the Amedisys’ of our industry who violate the Stark laws each and every day with their marketing tactics.

      November 15, 2013

      • I have no real opinion about hospitals and Stark or AKS except that if I owned both a hospital and home health, I would obviously want the HH business. I think most discharge planners give patients a choice but in an obligatory sort of way. The key is to have your agency known in the community so when the discharge planner does ask, the patient knows your name.

        As far as Docs steering referrals to an agency, there is nothing wrong with that unless the doc has ownership in the agency and it is not designated as rural. There are well defined limits on how much an MD can be paid before he or she is considered to have a financial interest. The most blatant violations I have heard of are from smaller agencies. Remember, publicly traded companies are audited thoroughly.

        When a doc writes to refer to a particular agency, the hospital still has the responsibility to tell the patient that they are free to choose their provider. If the patient has a good hospital experience, they may well choose the hospitals agency. If the doc refuses to care for the patient if they don’t choose his agency of choice, he can do that, too, but every time he does, I would write him a letter questioning his ethics especially if your outcomes are equal to or better than his agency of choice.

        November 15, 2013
  6. Kathleen Saucier RN, COS-C. HCS-D, BCHH-C #

    The government needs to go after the smaller as well as the bigger agencies that are not following the rules (I believe that is still called fraud)….. And allow the agencies that truly care about patient care instead of padding pockets do just that …. Give good, quality patient care. It just seems that there is not equal justice for all, especially for the patients.

    November 14, 2013

    • Kathleen, I agree wholeheartedly with you. Honestly, I have met too many people in healthcare to count. I cannot think of many who would even consider committing fraud. There are some but the overwhelming majority of providers are honest and ethical. How hard could it be to isolate the few that are not?

      November 14, 2013

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