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Turning fraud and abuse control over to the potential abusers

October 10, 2019

Topics: Quote of the Day

By Bob Herman
Axios, October 10, 2019

The Trump administration is proposing to loosen regulations that prohibit doctors from steering patients insured by federal programs to facilities where they have a financial interest and that outlaw health care companies from offering bribes and kickbacks in exchange for patient referrals.

Why it matters: The industry has long clamored for an overhaul to these laws, which companies say obstruct their goals of providing “value-based care.” But critics worry the broad and vague changes could engender more fraud and abuse than there already is.

Driving the news: The Department of Health and Human Services would create new exemptions for the physician self-referral law and the federal anti-kickback statute — decades-old, complex laws that forbid payments that encourage unnecessary care and increase taxpayer costs.

  • Hospitals, doctors, nursing homes and other entities would be able to create “value-based arrangements,” and those deals could include exchanging bonuses or other types of “remuneration” without running afoul of referral laws.
  • For example, under these exemptions, a hospital could provide a nursing home with a behavioral health nurse for certain discharged patients, or a hospital could donate cybersecurity technology to a physician’s office.
  • Many exemptions already exist, including for organizations called “accountable care organizations” that try to keep a patient’s care within a narrow set of hospitals and doctors, but these changes would go much further.

Between the lines: The overarching concern is everyone’s definition of “value” is different. How will regulators know whether providers are acting in good faith to coordinate care, or if they are using “value-based care” as a cover to control patient referrals and enrich themselves?

A major exclusion: Pharmaceutical companies, medical device firms, labs and medical equipment makers are cut out from the changes because the federal government is afraid those companies would “misuse the proposed safe harbors.”

  • Pharma lobbyists, in particular, have pushed hard to change the law so drug companies could directly subsidize drug copays for Medicare and Medicaid patients, even though federal officials have said that practice “masks the high prices those companies charge for their drugs.”
  • HHS Secretary Alex Azar told reporters the government may consider separate regulations for value-based drug contracts, even though the evidence of those deals’ effectiveness is limited at best.

The bottom line: These changes come at the same time that hospitals, physicians, pharmaceutical companies and others are paying out billions of dollars every year in fraud settlements.

  • Public comments are due Dec. 31, and if this comment process is anything like the initial requests that asked for guidance, the industry will be heavily involved.

https://www.axios.com…

HHS Press Release with links to proposed rules:
https://www.hhs.gov…


Comment:

By Don McCanne, M.D.

There was a reason for the Stark laws. As health care was transitioning from a profession of the healing arts into the business market model of the medical-industrial complex, innovation in the business sense, as opposed to the professional health care sense, was introducing behaviors that previously had been considered unethical if not outright fraud but without statutory guides to limit this behavior – behavior based primarily on greed. Pete Stark led the way in providing guidance which, unfortunately, had to be backed up with legislation and regulation since the industry seemed incapable of controlling its own transgressions.

The Trump administration has made great efforts to reduce the role of government in health care and turn control of health care back to the industry. In their HHS press release CMS Administrator Seema Verma stated, “We serve patients poorly when government regulations gather dust in the attic: they become ever more stale and liable to wreak havoc throughout the healthcare system… We are updating our antiquated regulations to decrease burden for providers…”

So the Trump administration’s answer to kickbacks, fee splitting, abuse, fraud, and the like is to change the rules and then relabel these behaviors “value-based arrangements” (see HHS press release), and let the market work.

How can we fix our health care system when our political leaders do not seem to be able to differentiate right from wrong? Or maybe they just don’t care.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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