Oct 10, 2019

Health care's fraud and abuse laws are getting overhauled

Doctors are at the center of changes to self-referral and anti-kickback laws. Photo: Katherine Frey/The Washington Post via Getty Images

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.

Go deeper

The wreckage of summer

Illustration: Sarah Grillo/Axios

We usually think of Memorial Day as the start of the summer, with all of the fun and relaxation that goes with it — but this one is just going to remind us of all of the plans that have been ruined by the coronavirus.

Why it matters: If you thought it was stressful to be locked down during the spring, just wait until everyone realizes that all the traditional summer activities we've been looking forward to are largely off-limits this year.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 8 a.m. ET: 5,428,605 — Total deaths: 345,375 — Total recoveries — 2,179,408Map.
  2. U.S.: Total confirmed cases as of 8 a.m. ET: 1,643,499 — Total deaths: 97,722 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. World: White House announces travel restrictions on Brazil Over 100 cases in Germany tied to single day of church services.
  4. Public health: Officials are urging Americans to wear masks over Memorial Day.
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 5 hours ago - Politics & Policy

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

The CDC is warning of potentially "aggressive rodent behavior" amid a rise in reports of rat activity in several areas, as the animals search further for food while Americans stay home more during the coronavirus pandemic.

By the numbers: More than 97,700 people have died from COVID-19 and over 1.6 million have tested positive in the U.S. Over 366,700 Americans have recovered and more than 14.1 million tests have been conducted.