Obama and fraud

[For general background on fraud in the health-care field,
see these non-Obama-specific references:
@Wikipedia: Health care fraud
@Wikipedia: Medicare fraud

ObamaCare oversight among health watchdog cuts
by Fred Schulte
Center for Public Integrity, 2013-07-25

Budget squeeze, staff departures force HHS inspector general
to trim investigative targets

[What this indicates so clearly is how low combating fraud in the health care field is
in the priorities of the Obama administration,
and of Congress.]


The cuts are “deeply regrettable,” said Malcolm Sparrow,
a professor at Harvard University’s John F. Kennedy School of Government and health fraud expert.
“We’d save a huge number of taxpayer dollars
by doubling the size of these operations.”

Sparrow said fraud artists are adept at quickly figuring out
how to exploit new health care initiatives
and that officials have an obligation to “stay ahead” of them.
“Otherwise three years from now we’ll be saying,
‘how could we not have predicted this mess?’ ”

Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association,
said that OIG audits not only stem financial losses,
but also can protect patients from harm.
Money spent on these efforts “pays for itself many times over,”
he said in an email.

OIG officials contend their investigations typically return $8 for every dollar invested.
They reported fiscal 2012 expected recoveries of about $6.9 billion
and more than 1,100 criminal and civil investigations of individuals or health care businesses.


“OIG will not be able to keep pace with the ACA (Affordable Care Act) expansion,
maintain/expand our highly successful Medicare Fraud Strike Forces,
or keep pace with the expanding Medicare and Medicaid enrollment
and the expected need for growth to combat on-going health care fraud,”
an agency document states.

The following item tempts me to label this post "Obama: Fraud and Doubletalk",
since it so clearly represents both.
However, for simplicity, I stuck to just the fraud modifier.

Strategic Move Exempts Health Law From Broader U.S. Statute
New York Times, 2013-11-05


The Affordable Care Act is the biggest new health care program in decades, but
the Obama administration has ruled that
neither the federal insurance exchange
nor the federal subsidies paid to insurance companies on behalf of low-income people
are “federal health care programs.”

The surprise decision, disclosed last week,
exempts subsidized health insurance from a law that bans
rebates, kickbacks, bribes and certain other financial arrangements in federal health programs,
stripping law enforcement of a powerful tool used to fight fraud in other health care programs, like Medicare.

The main purpose of the anti-kickback law,
as described by federal courts in scores of Medicare cases,
is to protect patients and taxpayers against
the undue influence of money on medical decisions.

Kathleen Sebelius, the secretary of health and human services,
disclosed her interpretation of the law in a letter to Representative Jim McDermott, Democrat of Washington, who had asked her views.
She did not explain the legal rationale for her decision,
which followed a spirited debate within the administration.

Under the Affordable Care Act, millions of people will be able to buy insurance from “qualified health plans” offered on exchanges, or marketplaces,
run by the federal government and by some states.

Most of the buyers are expected to be eligible for subsidies to make insurance more affordable.
The subsidies, paid directly to insurers from the United States Treasury,
start in January and are expected to total more than $1 trillion over 10 years.

Ms. Sebelius said
the Health and Human Services Department
“does not consider” the subsidies to be federal health care programs.

She reached the same conclusion with respect to federal and state exchanges, built with federal money,
and with respect to “federally funded consumer assistance programs,”
including the counselors, known as navigators,
who help people shop for insurance and enroll in coverage through the exchanges.


Lawyers and law enforcement officials said Ms. Sebelius’s decision was unexpected
because the insurance exchanges and subsidy payments appeared to fit
the definition of federal health care programs in the anti-kickback statute.

Generally, the law makes it a crime to pay or receive anything of value
in return for the referral of patients
or as an inducement for people to buy goods and services reimbursed by federal health care programs.
Such programs are defined broadly as
“any plan or program that provides health benefits, whether directly,
through insurance, or otherwise,
which is funded directly, in whole or in part, by the United States government.”

“The secretary’s decision will have some very significant consequences,”
said D. McCarty Thornton, former chief counsel to the inspector general at the Health and Human Services Department.
“The federal anti-kickback statute will, in most cases,
not apply to subsidized health plans or the items and services furnished by those plans.”

“Plans and providers are very happy to be relieved of that concern,” Mr. Thornton added.

Kevin G. McAnaney, a lawyer who specializes in health care fraud and abuse cases,
said Ms. Sebelius’s decision would allow drug companies
to give coupons to people who buy insurance through the exchanges.

Such coupons subsidize co-payments and reduce out-of-pocket costs for consumers,
encouraging them to use certain brand-name prescription drugs
when lower-cost alternatives are available, Mr. McAnaney said.

The federal government has forbidden the use of drug coupons
in Medicare and other federal health programs,
saying they amount to a classic kickback scheme,
with drug companies paying consumers to use their products.

Mark Merritt, the president of the Pharmaceutical Care Management Association, which represents benefit managers like Express Scripts and CVS Caremark, expressed a similar concern.
“The coupons steer consumers away from lower-cost alternatives
to more expensive drugs, increasing costs to insurers and to the government,” he said.

Coupons may drive down the co-payment for an expensive brand-name drug,
but often, the insurer must pay much more than it would for a generic version of the medication.

Some drug companies and their lawyers had assumed that
federal insurance subsidies were part of a federal health care program.

Drug coupons offered by Merck, for example,
say that they are not valid for patients covered by Medicare, Medicaid
or “any qualified health plan purchased through a health insurance exchange
established by a state government or the federal government.”

In a vivid demonstration of how the anti-kickback law can be applied,
the Justice Department announced on Monday that
Johnson & Johnson would pay more than $2.2 billion to resolve criminal and civil investigations.
The government said the company had, among other things,
paid kickbacks to doctors and nursing home pharmacies to promote the use of certain drugs.
The company said the payments were “lawful rebates.”

The National Health Council, which represents patients and drug companies,
praised Ms. Sebelius’s decision.
“People with chronic diseases and disabilities will be able to continue using
co-payment assistance programs,”
said Myrl Weinberg, the chief executive of the council.

Ms. Sebelius may not have the last word, lawyers said.
A whistle-blower could file suit under the False Claims Act,
charging that health care providers, health plans or drug makers
had defrauded the government,
and a federal court might then decide
whether the federal exchange or subsidy payments were federal health care programs.

[Obama = corruption]

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