By Robert Pear
The New York Times, November 24, 2018
The Trump administration has labored zealously to cut federal regulations, but its latest move has still astonished some experts on health care: It has asked for recommendations to relax rules that prohibit kickbacks and other payments intended to influence care for people on Medicare or Medicaid.
The goal is to open pathways for doctors and hospitals to work together to improve care and save money. The challenge will be to accomplish that without also increasing the risk of fraud.
With its request for advice, the administration has touched off a lobbying frenzy. Health care providers of all types are urging officials to waive or roll back the requirements of federal fraud and abuse laws so they can join forces and coordinate care, sharing cost reductions and profits in ways that would not otherwise be allowed.
Federal health officials are reviewing the proposals for what they call a “regulatory sprint to coordinated care” even as the Justice Department and other law enforcement agencies crack down on health care fraud, continually exposing schemes to bilk government health programs.
“The administration is inviting companies in the health care industry to write a ‘get out of jail free card’ for themselves, which they can use if they are investigated or prosecuted,” said James J. Pepper, a lawyer outside Philadelphia who has represented many whistle-blowers in the industry.
Federal laws make it a crime to offer or pay any “remuneration” in return for the referral of Medicare or Medicaid patients, and they limit doctors’ ability to refer patients to medical businesses in which the doctors have a financial interest, a practice known as self-referral.
These laws “impose undue burdens on physicians and serve as obstacles to coordinated care,” said Dr. James L. Madara, the chief executive of the American Medical Association. The laws, he said, were enacted decades ago “in a fee-for-service world that paid for services on a piecemeal basis.”
Melinda R. Hatton, senior vice president and general counsel of the American Hospital Association, said the laws stifle “many innocuous or beneficial arrangements” that could provide patients with better care at lower cost.
Hospitals often say they want to reward doctors who meet certain goals for improving the health of patients, reducing the length of hospital stays and preventing readmissions. But federal courts have held that the anti-kickback statute can be violated if even one purpose of the remuneration is to induce referrals or generate business for the hospital.
The premise of the kickback and self-referral laws is that health care providers should make medical decisions based on the needs of patients, not on the financial interests of doctors or other providers.
Doctors, hospitals and drug companies are urging the Trump administration to provide broad legal protection — a “safe harbor” — for arrangements that promote coordinated, “value-based care.” In soliciting advice, the Trump administration said it wanted to hear about the possible need for “a new exception to the physician self-referral law” and “exceptions to the definition of remuneration.”
“Good providers can work within the existing rules,” said Joel M. Androphy, a Houston lawyer who has handled many health care fraud cases. “The only people I ever hear complaining are people who got caught cheating or are trying to take advantage of the system. It would be disgraceful to change the rules to appease the violators.”
By Don McCanne, M.D.
This article demonstrates some of the undesirable consequences of blindly continuing down the pathway of value-based health care through practice arrangements such as accountable care organizations. The system should be structured to serve the health care interests of patients first but these models are serving primarily the financial interests of physicians and hospitals. They are endorsed by the AMA and the American Hospital Association which seems to explain why these organizations are on the wrong side of the the debate over Single Payer Medicare for All.
The laws, rules and regulations that are being addressed by the proposed rules that would relax enforcement exist because the health industry did engage in activities that placed the financial interests of the providers above the health care interests of patients – activities that were often unethical and immoral. It is ironic that the business models being pursued today are claimed to increase value when, in fact, they bring back old behaviors that have been considered to be illegal, and for good reason. Maybe we’ve abandoned some of the old language – fee-splitting, kickbacks, ghost surgery, etc. – but the alternative payment models are bringing back arrangements that represent similar compromises in medical ethics.
Houston lawyer Joel Androphy says, “Good providers can work within the existing rules. The only people I ever hear complaining are people who got caught cheating or are trying to take advantage of the system. It would be disgraceful to change the rules to appease the violators.”
The effort of the Trump administration to relax the rules of ethics to take care of the providers is wrong, though there certainly is need to back off on their efforts to expand the dysfunctional value-based models that they are advancing.
We need a change, but a change that better serves the interests of patients – like, for instance, a Single Payer Medicare for All program. That would work better for the providers as well, except maybe for the very few who are primarily driven by greed. Besides, if we remove the opportunities for greed, then greed disappears (except for the relatively rare, hardcore, mafioso-type Medicare crooks).
Single Payer Medicare for All – where the rules serve the interests of patients first.
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