In the prior post, I noted the opening of Yale Law School’s new Solomon Center for Health Policy and Law. At the opening, there will be a conference on “The New Health Care Industry: Integration, Consolidation, Competition in the Wake of the Affordable Care Act.”
Of course, the so-called “new health care industry” is anything but new. It has been evolving for years, though Obamacare has certainly accelerated it. A better title would be “The Continuing Evolution of the Health Care Industry: Consolidation and Extinction.”
Given its title, the conference will likely focus on BigHealth — the consolidation of health systems and insurers. We are seeing it everyday, and it is certainly important. Unfortunately, the conference will ignore the real battles in the evolving health care industry and where they are being fought and by whom.
I am in the tenches everyday with solo and small physician group practices and other small health care providers as they try to remain independent and give quality health care services to their patients and get paid a fair price for their expertise.
I doubt that there will be any room for LittleHealth in the future, but maybe there should be. One size does not fit all. Who hasn’t experienced the difference between the service provided by Bank of America and that provided by the local community bank?
Nearly 40 years ago, E.F. Schumacher wrote “Small is Beautiful.” One of the lessons he sought to teach us is that we often overlook what is the most appropriate scale for an activity.
Small may not always work, and sometimes bigger is better. But I don’t know if anyone has really thought about it where people’s health is concerned. I would like to see a conference focus on the question of what is the appropriate scale for health care delivery and how to get there. If there is room for the small health care provider, we better find out before they all go the way of the dinosaurs.
When I graduated law school in 1981, health law was pretty much nonexistent. Now, to be relevant, most law schools offer some health law courses.
Because? Health law is hot. It was hot before Obamacare, and it will remain hot.
Getting healthy and staying that way is a passion for most Americans. Obamacare has changed the way the country thinks about dispensing health care. But there will always be sick people. New drugs will be invented, and new procedures adopted. All to make us healthier or to make us more comfortable in our sickness. Health care is big business, and, by necessity, will remain heavily regulated. After all, there will always be patients and providers who will try to game the system.
So, law students, if you don’t know what path to follow, you could do a lot worse than health law
“On July 08, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that updates payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2016. This year, CMS is proposing a number of new policies, including several that are a result of recently enacted legislation. The rule also finalizes changes to several of the quality reporting initiatives that are associated with PFS payments, including the Physician Quality Reporting System (PQRS), the Physician Value-Based Payment Modifier (Value Modifier), and the Medicare Electronic Health Record (EHR) Incentive Program, as well as changes to the Physician Compare website on Medicare.gov.”
The proposed rule includes provisions relating to the following;
- physician quality reporting system
- “Physician Compare”
- EHR incentive program
- Medicare shared savings
- advance care planning
- payment provisions on Part B drugs, misvalued codes, RVU reductions, “incident to” services, physician value-based payment modifier, etc.
Perhaps most significant in the area of healthcare business transactions are the physician self-referral (Stark law) updates:
- expansion of recruitment and retention provisions to NPPs
- updating physician-owned hospital requirements
- reducing burdens of technical noncompliance through more reasonable regulations in a number of areas (based on information learned from self-dsiclosures and the rersults of recent cases)
The complete proposed rule as published in the Federal Register on July 15 can be found here.
Comments will be accepted by CMS on the proposed rule until September 8, 2015.
Great podcast for healthcare attorneys and keeping current — The Week in Health Law.
A few weeks ago, the OIG published another one of its fraud alerts. This one was entitled, “Physician Compensation Arrangements May Result in Significant Liability.”
Everyone knows (don’t they?) that business arrangements in healthcare have to meet several legal requirements, including: (1) it cannot be based on the value or volume of referrals, (2) it must be at arms’ length, and (3) it must be commercially reasonable. When a healthcare provider enters into a transaction that violates any of these three requirements, he may have violated the anti-kickback statute or physician self-referral/Stark law or both, and any claim arising from the transaction that is submitted to the federal government for payment may be a false claim. Healthcare lawyers have long been warning their clients to be cautious about how they pay (and recruit) physician employees and contractors in order to avoid violations of the kickback, self-referral, and false claims laws. Violations carry stiff penalties and in some cases criminal sanctions.
There is nothing new in this recent Fraud Alert. Many similar fraud alerts and OIG advisory opinions and actual court cases have passed on the same message. And there is nothing surprising other than that the facts described in this Fraud Alert so obviously violate these healthcare laws that you have to ask, why is no one listening?
I have a three explanations:
- The false claims act was passed during the Civil War and was aimed at stopping corruption in how defense contractors were paid. The law made sense. There was a direct relationship between the defense contractor and the government dollars received. However, the false claims act makes no sense in healthcare — treating a patient is so separated from payment; the provider at the time of care may not know who is paying — government, commercial, the patient, or no one.
- The healthcare laws are so contrary to the economic rules that apply to other businesses and so counter-intuitive as to make them offensively ridiculous and begging to be ignored (which they are).
- As we move to a pay for performance, quality-based healthcare reimbursement system, these laws become even more irrelevant. Case in point — Accountable Care Organizations — a critical foundation for healthcare reform under the Accountable Care Act. ACOs could not operate unless waivers to these healthcare laws were implemented. Every healthcare provider is not in an ACO, but many are developing clinically integrated networks and other arrangements to oversee quality and utilization in order to compete more effectively with large healthcare systems and negotiate with payors in keeping with the goals of healthcare reform. They are forced to act as if the waivers applied to them also. In fact many consultants advise that the waivers DO apply to non-ACO networks.
It is time for a thoughtful review (and repeal) of these antiquated and economically debilitating laws in how they apply to healthcare providers. It is time to stop calling business sensible healthcare transactions fraudulent and punishing the participants.
These laws allow regulators to be lazy and stupid. Anyone can enforce laws based an strict liability or ones that have lines so faint that crossing them is unavoidable.
Seriously, who cares if someone pays a fee for referring a patient for care? Liability should be based on the quality and necessity of the care. Providing care not needed or charging for care not given — those actions should be punished. But that’s harder for regulators, so we continue to vilify healthcare providers and impose burdens on them that are far tougher than the benefits derived.
As healthcare providers and their lawyers know, things happen fast in healthcare. Business deals, enforcement activity, new inventions and discoveries.
Here are a few headlines from last week in no particular order:
- OIG Mid-Year 2015 Work Plan Mid-Year Update — The OIG published its 86 page mid-year update to its 2015 Work Plan. “This edition of the Work Plan, effective as of May 2015, describes OIG audits, evaluations, and certain legal and investigative initiatives that are ongoing. In response to adjustments made to our Work Plan, this mid-year update removes items that have been completed, postponed, or canceled and includes new items that have been started since October 2014. The word “new” before a project title indicates that the project did not appear in the previous Work Plan. For each project, we include the subject, primary objective, and criteria related to the topic. At the end of each description, we provide the internal identification code for the review (if a number has been assigned) and the year in which we expect one or more reports to be issued as a result of the review. This edition also forecasts areas for which OIG anticipates planning and/or beginning work in the upcoming fiscal year and beyond. Typically, these broader areas of focus are based on the results of OIG’s risk assessments and have been identified as significant management and performance challenges facing HHS. In FY 2015 and beyond, we will continue to focus on emerging payment, eligibility, management, and information technology systems security vulnerabilities in health care reform programs, such as the health insurance marketplaces. OIG plans to add to its portfolio of work on care quality and access in Medicare and Medicaid, as well as on public health and human services programs. OIG’s examination of the appropriateness of Medicare and Medicaid payments will continue, with possible additional work on the efficiency and effectiveness of payment policies and practices in inpatient and outpatient settings, for prescription drugs, and in managed care. Other areas under consideration for new work include, for example, the integrity of the food, drug, and medical device supply chains; the security of electronic data; the use and exchange of health information technology; and emergency preparedness and response efforts.”
- CMS Proposes New Rule for Medicaid Managed Care — “This proposed rule would modernize the Medicaid managed care regulations to reflect changes in the usage of managed care delivery systems. The proposed rule would align the rules governing Medicaid managed care with those of other major sources of coverage, including coverage through Qualified Health Plans and Medicare Advantage plans; implement statutory provisions; strengthen actuarial soundness payment provisions to promote the accountability of Medicaid managed care program rates; and promote the quality of care and strengthen efforts to reform delivery systems that serve Medicaid and CHIP beneficiaries. It would also ensure appropriate beneficiary protections and enhance policies related to program integrity. This proposed rule would also require states to establish comprehensive quality strategies for their Medicaid and CHIP programs regardless of how services are provided to beneficiaries. This proposed rule would also implement provisions of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) and addresses third party liability for trauma codes.”
- Florida Senate Tweaks Health Exchange Plan For Fast Action — “The new Senate plan would jettison an initial proposal to expand Medicaid this summer, but instead would still rely on federal money linked to President Barack Obama’s health care overhaul. Low-income Floridians would be eligible to purchase coverage through a new state-run exchange, but they would have to pay premiums and they would be required to work. The new health coverage plan would require federal approval and would not kick in until January. It would also allow consumers who are currently getting insurance through the federal exchange to continue doing so instead being bumped to an expanded Medicaid program — something the House criticized in the initial proposal.”
- New York Assembly Passes Universal Health Care Bill — The New York Assembly passed the New York Health Act, which is seen largely as a symbolic gesture and not likely to be passed by the Republican New York Senate. The bill’s Economic Analysis stated “This report analyzes the economic effects of the New York Health Act …, which would establish a comprehensive, universal health insurance program for all New Yorkers. The Act would replace the current multi-payer system of employer-based insurance, individually acquired insurance, and federally sponsored programs (e.g., Medicare and Medicaid) with a single billing pipeline funded by broad-based progressively graduated assessments collected by the State and based on income and ability to pay, thereby reducing administrative bloat and monopolistic pricing and dramatically reducing the cost of health care to New Yorkers even while extending and improving the provision of care.”
- 21st Century Cures Act: A Call to Action — “The House Energy and Commerce Committee recently approved the 21st Century Cures Act with a vote of 51-0. The nonpartisan legislation will help to modernize and personalize health care, encourage greater innovation, support research, and streamline the system to deliver better, faster cures to more patients.”
- FTC Commissioner Calls For War On Hospital Construction Laws — Law360 reported yesterday that “Federal Trade Commissioner Maureen K. Ohlhausen on Friday urged the antitrust agency to put pressure on state legislatures around the country to scrap laws requiring state approval for the construction of new hospitals, saying the laws are ‘anti-competitive’ in nature and create barriers for new market entrants.”
- Two Cardiologists To Pay Over $3.6 Million For Fraud — “Jasjit Walia and Preet Randhawa and their New Jersey-based cardiology practice Garden State Cardiovascular Specialists will pay the amount to resolve allegations that they submitted claims to federal insurance program Medicare for various cardiology diagnostic tests and procedures. The tests included stress tests, cardiac catheterizations and external counterpulsation, which were not medically necessary, US Attorney Paul Fishman for the District of New Jersey said.”
- Florida’s Medical Marijuana Rules Upheld — “Florida Administrative Hearings Judge David Watkins rejected claims by an Orange County nursery that the state’s proposed rules and regulations were unfairly developed to give advantage to bigger, politically connected nurseries to win the five regional medical-marijuana-growing licenses the law allows. … Florida may now start creating a statewide medical-marijuana program that so far has only been proposed. The program, as written, allows five companies to grow low-THC marijuana, extract an oil and sell it as medicine for people who suffer from intractable epilepsy and several other debilitating conditions.”