TO IMPROVE PATIENT ACCESS TO HIGH-QUALITY HEALTHCARE OUTCOMES AT LOWER COSTS, THE FEDERAL HEALTH FRAUD LAWS NEED TO BE CHANGED AND SIMPLIFIED

Abstract

EDITOR'S NOTE: This article is Part 1 of a 3-Part Series

Following the passage of the Affordable Care Act (hereafter, the "ACA") in 2010, the United States healthcare system began a shift from what was previously a fee-for-service reimbursement model to a value-based payment model.[1]  What this meant for healthcare providers is that they would no longer be reimbursed for merely providing services to patients, but that they would instead be reimbursed for successful patient outcomes.[2]  A shift in reimbursement models was needed to incentivize providers to take a long-term approach to providing high quality healthcare services to their patients rather than incentivizing higher bills to patients for various services in a marketplace where healthcare services are becoming increasingly expensive.[3]^,[4]

The implications of this shift in reimbursement models have several effects on the various health fraud laws that apply to providers who accept federal reimbursement dollars from Medicare, Medicaid, and the State Children's Health Insurance Program ("hereafter, S-CHIP") (hereafter, collectively "payors").[5]  These health fraud laws include the Anti-Kickback Statute (hereafter, "AKS") under 42 U.S.C. section 1320a-7b(b),[6]^,[7] the Stark law (hereafter, Stark") 42 U.S.C. section 1395nn[8], and the False Claims Act (hereafter, "FCA") under 31 U.S.C. sections 3729-3733[9] (multiple other state entities are involved, such as in the case in Medicaid, but the focus of this paper will be on the federal health fraud laws).[10]^,[11]  Although originally passed to protect taxpayers from healthcare waste, fraud, and abuse, and the inherent conflicts of interest implicated if a physician is permitted to financially gain from self-referral, as is usually the case when any similar law is passed, some of the unintended consequences of these laws have included price limitations and overly-complex regulations.[12]^,[13]  There are reasonable arguments to be made both for and against self-referrals, but overutilization of healthcare services is a very real public health problem that needs to be addressed.[14]  The public's trust and patient confidence in their healthcare providers is a vital interest.[15]

Moreover, the numbers of exceptions to these laws are numerous and can make the billing and reimbursement process ever more daunting for healthcare providers.[16]  Stark, for example is particularly overwhelming due to its multiple pages of exceptions.[17]  Exceptions include those for physicians' services,[18] in-office ancillary services,[19] and prepaid plans,[20] among others.[21]  The U.S. healthcare system is overly costly, continues to provide limited access to patients for care along with inadequate healthcare outcomes, and changes to the federal health fraud laws will help alleviate this problem by freeing up providers to coordinate on electronic medical records and focus on improved patient healthcare outcomes.

[1] Kathy H. Butler, Stark Law Reform: Is It Time?, 18 J. Health Care Compliance 5, 6 (2016).

[2] Kathy H. Butler, Stark Law Reform: Is It Time?, 18 J. Health Care Compliance 5, 6 (2016).

[3] Kathy H. Butler, Stark Law Reform: Is It Time?, 18 J. Health Care Compliance 5, 6 (2016).

[4] Corbin Santo, Walking A Tightrope: Regulating Medicare Fraud and Abuse and the Transition to Value-Based Payment, 64 Case W. Res. L. Rev. 1377, 1379 (2014).

[5] Kerry Bollerman, Alexander Egbert, Michael Fazio & Bobby Graves, Health Care Fraud, 53 Am. Crim. L. Rev. 1393, 1396 (2016).

[6] Kerry Bollerman, Alexander Egbert, Michael Fazio & Bobby Graves, Health Care Fraud, 53 Am. Crim. L. Rev. 1393, 1401 (2016).

[7] Anti-Kickback Statute, 42 U.S.C.A. § 1320a-7b (West 2015).

[8] Stark Law, 42 U.S.C.A. § 1395nn (West 2010).

[9] False Claims Act, 31 U.S.C. §§ 3729–3733 (West 2010).

[10] Corbin Santo, Walking A Tightrope: Regulating Medicare Fraud and Abuse and the Transition to Value-Based Payment, 64 Case W. Res. L. Rev. 1377, 1380 (2014).

[11] False Claims Act, 31 U.S.C. §§ 3729–3733 (West 2010).

[12] Lynn Gordon, Payors Acquiring Physician Practices: Purchase Price Limitations and Other Stark & Anti-Kickback Rules of the Road, Health Law., April 2014, at 24, 25 (2014).

[13] Steven D. Wales, The Stark Law: Boon or Boondoggle? An Analysis of the Prohibition on Physician Self-Referrals, 27 Law & Psychol. Rev. 1, 11 (2003).

[14] Steven D. Wales, The Stark Law: Boon or Boondoggle? An Analysis of the Prohibition on Physician Self-Referrals, 27 Law & Psychol. Rev. 1, 13 (2003).

[15] Steven D. Wales, The Stark Law: Boon or Boondoggle? An Analysis of the Prohibition on Physician Self-Referrals, 27 Law & Psychol. Rev. 1, 13 (2003).

[16] Lynn Gordon, Payors Acquiring Physician Practices: Purchase Price Limitations and Other Stark & Anti-Kickback Rules of the Road, Health Law., April 2014, at 24, 27 (2014).

[17] Steven D. Wales, The Stark Law: Boon or Boondoggle? An Analysis of the Prohibition on Physician Self-Referrals, 27 Law & Psychol. Rev. 1, 11 (2003).

[18] Stark Law, 42 U.S.C.A. § 1395nn(b)(1) (West 2010).

[19] Stark Law, 42 U.S.C.A. § 1395nn(b)(2) (West 2010).

[20] Stark Law, 42 U.S.C.A. § 1395nn(b)(3) (West 2010).

[21] Stark Law, 42 U.S.C.A. § 1395nn(c)-(i)(6) (West 2010).