GNBT bought Veneto,an asset with a strong record of

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docj OrlandoJohn #4291
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GNBT bought Veneto,an asset with a strong record of generating revenue from services/products ordered by docs who owned shares/units of the MSO. The docs rec'd investment income(distributions) from profit that was generated from the MSO.

Two problems:
1) The original purchase was based on revenue figures that were unsustainable over a long period. These programs have lifespans before insurance companies figure out ways to cut the reimbusement. Essentially, Veneto sold out near the top of the market.

2) The model MAY have been flawed in that some of the distributions may have been given out based on the amount of business the investors provided. It is referred to as "kickbacks" or "fee spitting" and is frowned upon and probably illegal when the business invoves federally insured patients.

So...GNBT takes Veneto, which still has value and slows/stops its business while reorganizing the legal investment paperwork. It takes time to get lot's of docs resigned with all the attorney's invoved. Now while all this is happening GNBT is adding new services and products into the MSO which SHOULD result in more growth going forward. So if they deliver on what they are expecting, things should be fine and the model more compliant moving forward. The easy money may have been made by pre-GNBT Veneto but the expanded lines of business can still add up.

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