Some years ago I represented a small medical billing company. The owner was a real “go getter” and she and her husband operated a very (seemingly) efficient operation. She hired me to draft an agreement between her company and a large medical network. She would be responsible for approximately $5-10 million in billing from which her company would gross 7%. The only catch was that the medical network demanded that the agreement be terminable at will and any money that had been billed but not received (in the pipeline) would not be subject to her collection fees.
I advised her not to accept these terms but she overrode my advice as the potential was so large for her.
About two years later, she called me frantically. Apparently her success in the first agreement became known in the medical community and a much larger group contracted her to do their billing. However, instead of callin g me to update the initial agreement, she simply used the first agreement (these were the days before e-mailing agreements to clients for review was common and allowed clients to have a workable copy on their computers) and used white-out to change the medical group’s name. Obviously, she forgot about the clause allowing the group to cancel and not be responsible for the monies in the pipeline.
As I am sure you can guess, the second group, not the first group, cancelled the agreement. She estimated that she lost no less than $125K. All this because she didn’t call me or want to likely spend less that 1% of what she ultimately lost by being cheap. Normally, I would have been very mad or in the case of a longstanding client would have fussed at her. Based upon her loss, I did neither.
Several years later she and her husband were indicted for Medicare/Medicaid fraud. Apparently they were selling Medicare/Medicaid num bers they had access to, to third parties that used this information for fraudulent purposes (very common during those days).
While I am sorry for my former client’s situation, the look on her face when I told her that based upon what she did in not getting me involved in the second agreement caused her loss and there was nothing she could do about it, was priceless.
I lost track of them following their incarceration but often wondered if that large loss caused them to become vulnerable to the evils of South Florida as the health care fraud capital of the world.
