Jeffrey M. Verdon Law Group, LLP
Ph: 949-988-0939

No Good Deed Goes Unpunished

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Dear Clients, Colleagues, and Friends,

Do you remember when the medical profession used to be about the patient and not the insurance carrier? Dr. Nelson, a surgeon affiliated with Hoag Hospital, remembers it well.

Since March of 2010, with the advent of Obamacare, he has seen millions of Americans becoming insured on plans with out-of-network benefits. In addition, narrowing insurance networks meant that many providers were being left completely out of network, so to remain in business forced him to consider an out-of-network strategy as a means of survival.

Dr. Nelson knew he had to make a change. He knew physician ownership in Ambulatory Surgical Centers (ASCs) allowed for maximum professional control over the clinical environment and over the quality of care delivered to patients. As a result, he opened a new business with his own ASC.

90% of ASCs have physician ownership, and many ASCs are jointly owned by local hospitals and physicians. This ownership gives Dr. Nelson professional autonomy over the work environment and over the quality of care that has not been available in hospitals. Furthermore, hospitals embrace the value of the ASC model as it helps reduce frustrating wait times for patients and allows for maximum specialization and patient-doctor interaction, unlike large scale institutions.

Dr. Nelson finally felt that medical care was back to being about the patient. As a medical professional, he was bound by a strict code of medical ethics, and so was the ASC, so he was quite confident he had protected his future and would be safe for years to come.

Then he was blindsided.

One of the insurance carriers, Cigna, filed a lawsuit against 11 ASCs, including his, alleging the surgery centers attracted out-of-network members by reducing the members' copays and other fees but charging Cigna inflated prices to recoup losses. Cigna allegedly paid the 11 surgery centers more than $6.5 million in claims before realizing the centers were allegedly using the "fee-forgiving" model for out-of-network patients and now wanted it back.

His ASC did not have contractual arrangements with Cigna and, therefore, was "out of network"; how could Cigna legally force his ASC to collect copays and deductibles? Even if he overcomes this lawsuit, paying his defense costs could be devastating to his business. He could lose everything. How could this happen to such an honorable doctor?

The defendant ASCs have not yet filed an answer to the Complaint. The complaint can be read in its entirety by clicking here.

Will doctor's offices be next?

Indeed no good deed goes unpunished. One can still be held liable even when their heart is in the right place, and that is why asset protection planning is so important. Protecting you from the things you don't expect as well as those that are foreseeable is our business. If you don't yet have an action plan, contact us.

Jeffrey M. Verdon, Esq.

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