Provider Kickbacks to be Allowed

Integrity will be tested

The Trump administration’s latest move has surprised many experts on health care.

♦ The existing rules are aimed at preventing improper influence over choices of doctors, hospitals and prescription drugs for Medicare and Medicaid beneficiaries.

Federal laws make it a crime to offer or pay any “remuneration” in return for the referral of Medicare or Medicaid patients. Federal laws limit doctors’ ability to refer patients to medical businesses in which the doctors have a financial interest, a practice known as self-referral.

♦ The premise of the kickback and self-referral laws is that healthcare providers should make medical decisions based on the needs of patients, not on the financial interests of doctors or other providers.

• Anti-kickback laws can be violated if a doctor is rewarded with a monetary remuneration to induce referrals or generate business for a hospital.

• Healthcare providers can be fined if they offer financial incentives to Medicare or Medicaid patients to use their services or products.

• Drug companies have been found to violate the law when they give kickbacks to pharmacies in return for recommending their drugs to patients.

• Hospitals can also be fined if they make payments to a doctor “as an inducement to reduce or limit services” provided to a Medicare or Medicaid beneficiary.

Doctors, hospitals and drug companies are urging the Trump administration to provide broad legal protection — a “safe harbor” — for arrangements that would more than likely violate anti-kickback laws.

The story being provided is that by reducing regulations there will somehow be better coordination of care or more “value-based care.” That’s the story for the presses, but everyone knows it is all about money — receiving not saving.

A healthcare provider who violates the anti-kickback or self-referral laws may face business-crippling fines under the False Claims Act and can be excluded from Medicare and Medicaid, a penalty tantamount to a professional death sentence for some providers.

♦ Hospitals have been working for years to get around these laws.

One method is to purchase physician practices and surgical facilities. All the practice doctor’s then fall under the control of the hospital. When it comes time for referrals to a specialist or for a surgical procedure the physicians giving the referral then refer to specialists or outpatient facilities also under the controlled of the parent hospital.

The American Hospital Association, says the current laws stifle “many innocuous or beneficial arrangements” that could provide patients with better care at lower cost.

This is hard to believe since we are already seeing doctors ordering a large number of unnecessary and expensive tests to be done at facilities the physician is associated with. This practice will only increase when doctors can start receiving kickbacks.

♦ Good providers can and do work within the existing rules. The only people complaining are people who got caught cheating or are trying to take advantage of the system.

Surveys have found that hospital consolidation and the merging of physician practices under a hospital’s umbrella has not lead to lower costs but has in fact resulted in higher costs due to less competition. Allowing kickbacks will only result in limiting patients’ choices while improving the profit margins of major hospitals.

♦ We trust healthcare providers to make medical decisions based on the needs of the patient, not on their financial interests. Should the Trump administration continue with their rule changes that trust will be forever broken.