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Any thoughts on the Annual Meeting situation this year? They have held the meeting in late-July/early-August most years (with the exception of 2016 when it was in October). Are they waiting for the strategic review to be completed? Not having one? Any read throughs on what this mean for where we are in the process?
Frederick Hnat—
Chief Executive Officer
David Grande—
Chief Financial Officer
Base Salary .................................. $ 400,000 $300,000
Actual Annual Bonus ....................$ 600,000 $375,000
Long Term Incentives ...................$ 200,000 $150,000
Equity Compensation ................... $ 97,115 $ 48,557
Other Compensation ................... $ 815,000 NA
Total . . . . . . . . . . . . . . . . . . . . . . $2,112,115 $873,557
This strikes me as pretty steep compensation for two individuals who own a combined 40,000 shares of stock. I do worry about where their incentives lie when it comes to the future of the company post-Macquarie settlement, etc. Any thoughts?
Is there any possibility that this dive is related to the reinsurance transaction falling through? Just trying to evaluate what I might be missing, as I see it as a strong buy at these levels...
Reliance Rail closes in on $2bn recapitalisation and refinancing deal
The Australian-55 minutes ago
Reliance Rail is expected to finalise its $2 billion recapitalisation and refinancing next Tuesday with AMP Capital and IPP out of Britain.
Article behind a paywall, but things are happening...
I appreciate your candid response...and you are correct in saying that if the company can still put up numbers in this...umm...challenging environment, then it deserves to trade at a multiple of its current range. I just want potential investors to have a clear understanding of the possible dangers of the company's original business model...
You are absolutely correct that this was in March 2012 (Back when the stock peaked at $2.00), and it has been nothing but failed promises and missed expectations since then. You are also correct in pointing out that the lawsuit is no longer active, but I feel that it might not be "wise" to dismiss the small chance that the Dr. no longer feels comfortable (or has lawyers willing) to operate the practice in the same manner as he did when everything was looking rosy in 2011. I can understand how the Florida law changes might make business more difficult in that state, but that does not explain the falling revenues out of Texas. This just might...
Disclosure: No position (was long until I originally read about the lawsuit in March 2012)
Does nobody here think that the Halo technology is just a way of distracting the investing public from the fact that this company has what many would consider to be a broken business plan? Or think that it is just a coincidence that the bottom fell out of new revenue generation right around the time that the Florida law was changed? Or that the lawsuit described below just might have something to do with the lack of new cases coming out of Texas?
March 2012 Workers’ Compensation Law Update
Dr. Donovan and Friends! Organized Crime In The Workers’ Compensation System?
Allstate Insurance Company and its affiliates recently filed suit against a number of providers. William Donovan, M.D., Lorenzo Farolan, M.D., Omar Vidal, M.D., David Dent, D.O., Northshore Orthopedics Association, and Memorial MRI are on the hot seat. The claims asserted are for racketeering, conspiracy, and fraud. The complaint alleges that certain law firms and chiropractors associated with them referred patients to the defendants’ enterprise, which converted minor soft-tissue bodily injury claims into major medical claims through inter-enterprise referrals. The plaintiffs claim that patients were referred to Memorial MRI for MRIs, which were reviewed by a specified radiologist, who embellished the findings to justify referral to Northshore Orthopedics for neurodiagnostic testing (conducted by a specified neurologist, who also embellished the results to justify additional testing and procedures), additional MRIs, surgical injections including ESIs, and additional orthopedic consultations, typically ending with a surgical recommendation. The suit is currently pending in the U.S. District Court for the Southern District of Texas in Houston.
SOURCE:http://www.nwcdn.com/state-news/dr-donovan-and-friends-organized-crime-in-the-workers-compensation-system?page=news
My agenda is to ride SPIN to $10 :) Since it makes up a substantial part of my portfolio, I can only hope that this happens in a reasonably short amount of time. I just wanted to hear what others had to say about the issue, as I felt that the timing of the price decrease coincided rather coincidentally with the fraud bill's initial vote. I am neither a pumper nor a basher, which is why I don't post on message boards (this was my first time, and I don't really plan on making a habit of it). However, I am not going to pretend like issues ranging from bill padding to outright fraud don't exist in the medical billing arena. It was good to get some other perspectives, you have been a help in assuring that this most likely won't impact SPIN, and I wish you all the best with your investment
The last that I really care to say about the issue is that SPIN clinics are potentially impacted by this law. The entire percutaneous disc decompression (“PDD”) industry is a borderline fraudulent industry. If Florida is cracking down on auto insurance fraud, the end result is that pain clinics will be under more scrutiny in terms of the necessity of the medical procedures that they are administering. This is detailed in this article here, which I highly recommend reading.
http://www.insurancefraud.org/article.lasso?RecID=1896
However, this in no way implies that SPIN is fraudulent. I mearly suggested that some of the procedures that they are taking on the bills for were done in order for doctors to pump up the bills that are eventually sent as claims to the insurance company. Based on the severity of insurance fraud in spine and pain clinics in the state of Florida, there is no reason to believe that SPIN's partner clinics are saintly havens that are not taking part in this activity. Everyone is taking part, because (almost) everyone is getting away with it. As long as SPIN is smart in the cases that they take on, and confident that they can continue to settle at a 99.9% clip, I agree that SPIN still represents a strong investment opportunity. If insurance companies do find a way to crack down on PDD procedure settlements, that is what would have a directly negative impact on the company. I do not agree that this law is a net positive for the company, however, as a crackdown on fraud brings the questionable billing activities of spine clinics into the public eye.
Keep in mind that I am posting this not to bash, as I would prefer to see the PPS increase, but rather to offer a differing opinion on WHY the PPS dropped off in the past week. I also would rather see a board where all issues, both positive and negative, are discussed, as bringing these industry issues to the forefront will only serve to strengthen ones thesis, so long as they can be proven to be non-issues for SPIN itself.
SPIN's patients are sent to their affiliated clinics by chiropractors or PTs, who are essentially making the initial claim that the patient is, in fact, injured, and has not improved under their care. It is the evaluation of the chiropractor or PT that allows the case to reach a SPIN-affiliated pain clinic. These chiropractors are passing the patient along, although these patients may or may not have real/serious problems. Both the chiropractors and pain clinics are incentivized to continue to provide care to patients, regardless of their actual needs, due to their connection with the lawyers. If the chiropractors/doctors are willing to run up the bill that can be presented in a lawsuit, the lawyer stands to win more when the case is settled (as he is taking a percentage of the total bill). This is what SPIN management means when they say that the key relationships are with the lawyers. If the chiros/PTs are willing to keep the case alive, then the pain clinics can get involved and charge for their procedures as well. If the medical professionals are not providing large medical bills (which equate to large settlements), the ambulance-chasing lawyers will send their clients elsewhere.
So, point being, if a patient is forced to go to the ER as opposed to going directly to a chiro or pain clinic, the ER professionals might snuff out the case from the start and SPIN would never have the chance to get involved (and make money off of it, even if it was fraudulant). The golden question is; how much of the business that is referred to and/or carried out by the pain clinics actually fraudulant? (or represents bill padding). Since I am still long the stock, I am willing to bet not all of it. However, Florida is the number one state in the country for this type of fraud (due to their PIP insurance system), and I am not convinced that, in this environment, no fraudulent cases are slipping their way through under the current system. Rather, my concern was with the growth rate in Florida post-reforms, and the companies reliance on the Tampa hotbed of corruption. I would like to see the company expand into other states to mitigate some of this risk.
Below is a case demonstrating this type of fraudulent situation:
http://www.outpatientsurgery.net/news/2012/01/10-Insurer-Surgeons-Sue-Each-Other-Over-Back-Pain-Treatment
What it potentially means is that patients are not allowed to be originally diagnosed by a pain clinic or outside "medical professional". I do believe in SPIN's model, but I also believe that many pain clinics, especially in Florida, are rife with fraudulant claims and/or billing. This is mainly due to the PIP insurance system. From the website:
After the attorney is contacted, investigates and confirms the viability of the case, patient will usually put into a Physical Therapy program with a Chiropractor or Physical Therapist for four to five months (blue arrow). If at the end of this period the patient still has recurring problems he will then have an MRI done. If the diagnosis at that time proves up continuing spine problems; it is at this point the Spine Surgeon will be introduced to the case
If chiropractors and PT's are replaced by emergency room doctors in making the initial diagnosis, there is less potential to string the case out based on a chiropractors recommendation (to take advantage of the PIP system). Therefore, many of the fraudulant cases (which are plentiful in SPIN's market areas and no doubt pad their revenue streams) would be nipped in the bud by the emergency room physicians and the case would never make it to SPIN.
Other parts of the discussion in Florida also aim to break up the lucrative relationships between doctors and lawyers (which would potentially effect SPIN, although I did not see any language regarding these relationships in this particular bill, and have my doubts about how such a law would be effectively enforced.)
I am just trying to poke holes in my own thesis, not bash the stock here. Let me know what you think...
One main point of discussion, and one that has been largely ignored on this board, is the potential for headwinds related to the proposed insurance reforms in the state of Florida (see link)
http://www2.tbo.com/news/politics/2012/jan/11/1/florida-house-subcommittee-passes-insurance-reform-ar-346182/
The majority of SPIN's growth is coming from the Tampa and Orlando markets. If you were to look at the top 10 cities for auto insurance fraud (in which pain clinics most certainly play a role), Houston, Tampa, and Orlando are all present. While the Texas market would not be impacted, SPIN's revenue generation ability in Florida would most definitely take a hit if the proposed legislation is passed (and it likely will pass, since the bill was proposed by Republicans, and Republicans hold a significant majority in both the House and Senate in the state of Florida). While there are many theories regarding the recent PPS weakness, this proposed bill probably played a role (as the PPS began declining the day the bill passed the subcommittee).
I am still long the stock (bought 3 months ago), and believe in the business model, but wanted to hear any other opinions on this legislation's potential impact...
Bank of Mckenney $.27 dividend (4+%), going ex-dividend on 12/30...solid bank, held strong after last years payout....
Bank of Mckenney $.27 dividend (4+%), going ex-dividend on 12/30...solid bank, held strong after last years payout....