Posts Tagged ‘Department of Justice’

2011 Was a Good Year in Medicare Fraud Battle

Tuesday, March 6th, 2012

The Department of Justice recovered nearly $4.1 billion stolen in healthcare fraud schemes during 2011, according to the Obama administration.  That is a 58 percent increase when compared with 2009.  “This is an unprecedented achievement — and it represents the highest amount ever recovered in a single year,” said Attorney General Eric Holder.  The Justice Department reported that more than 1,400 people were charged with fraud in 500 cases.  More than 700 have been convicted.  “We’re regaining the upper hand in our fight against healthcare fraud,” said Health and Human Services Secretary Kathleen Sebelius.  The numbers are part of the Health Care Fraud and Abuse Control Program Annual Report, which is submitted to Congress every year.

Holder and Sebelius gave credit to their Medicare Fraud Strike Force teams for tracking down crime in areas with “hot spots” of unexplained Medicare billing.  The strike forces include prosecutors and investigators from the FBI, the Justice Department and the Health and Human Services Office of Inspector General.

According to Sebelius, aggressively pursuing health care fraud is a great investment.  “Over the last three years, for every dollar we’ve spent, we’ve put more than seven dollars back in the hands of American taxpayers,” she said.  The money goes into the Medicare Trust Fund, the U.S. Treasury and state treasuries.

From 2009 to 2011, the federal government collected $7.20 for every dollar spent on fighting fraud, according to the HHS inspector general.  That’s an increase from the $5.10 for every dollar spent between 1997 and 2008.  “It demonstrates that our collaborative efforts to prevent, identify and prosecute the most egregious instances of health care fraud have never been stronger,” Holder said.  “Over the years, we’ve seen that as these crimes harm all of us — government agencies and programs, insurers and healthcare providers, and individual patients.”

The Health Care Fraud Prevention and Enforcement Action Teams (HEAT) sent 175 people to prison, with an average sentence of 47 months, according to the Justice Department.  The teams were created in 2009.  “I expect that we will be expanding those efforts to additional cities,” said Peter Budetti, director for the Centers for Medicare and Medicaid Services’ Center for Program Integrity.

The Patient Protection and Affordable Care Act (ACA) sets aside $350 million in healthcare fraud-fighting funds. One of the law’s provisions requires  providers and suppliers wishing to participate in the Medicare, Medicaid, and the Children’s Health Insurance Program that have been deemed to be at higher risk of fraud or abuse to undergo license checks and site visits to confirm legitimacy.

Writing in the Christian Science Monitor, Warren Richey puts this in historical perspective.  According to Richey, “During President Bush’s eight years in office, nearly $1.6 billion was recovered on average each year by federal agents and prosecutors.  In contrast, the Obama administration has recovered an average $3.6 billion per year during each of the past three years.  Fighting healthcare fraud is essential in an administration that is seeking to dramatically increase the level of federal control over the nation’s health insurance system.

But it is unclear from the report to what extent the increased recoveries are a function of more efficient law enforcement or simply the rampant nature of fraud against the government.  Estimates are that healthcare fraud diverts more than $60 billion a year from public health care to criminal enrichment.  Administration officials insist they are bringing fraud, waste, and abuse under control.”

In its fiscal year 2013 budget, HHS proposes to continue making progress against healthcare fraud by increasing support through mandatory and discretionary funding.  The mandatory funding level is $1.3 billion. HHS is requesting $610 million in discretionary funds.  In its FY 2013 budget request, the Justice Department requested $294.5 million in mandatory and discretionary funding to continue the fight against  healthcare fraud.

According to Holder, the department’s civil division filed 1,000 new civil cases in addition to 1,000 pending actions.  The work resulted in $2.4 billion in recoveries under the federal False Claims Act, he said.  “These are stunning numbers,” Holder said.

Public Perceives Supreme Court Justices As Biased Over ACA’s Legality

Monday, February 6th, 2012

Approximately 60 percent of Americans believe that the Supreme Court justices who will hear the Patient Protection and Affordable Care Act (ACA) will base their judgments more on personal ideology than a legal analysis of the individual mandate, according to a recent Kaiser Family Foundation poll.

Only 28 percent believe the justices will base their decision on the mandate without regard to politics and ideology.  The poll also asked about general views of the Supreme Court and found that 75 percent of the public believe that justices sometimes let their personal politics sway their decisions.  Seventeen percent said justices more often than not decide cases based on legal analysis.  The court is expected to hear oral arguments in March in a case brought against the Patient Protection and Affordable Care Act (ACA) by 26 states.

The Kaiser poll found that the individual mandate, a requirement that most Americans purchase health insurance by 2014 or pay a fine, remains unpopular — 67 percent of Americans opposed the provision and just 30 percent supported it.  Overall, approximately 37 percent of Americans view the health law favorably, while 44 percent have an unfavorable view.

In terms of the “repeal and replace” agenda that House Republicans are pursuing, it’s not really winning over the public.  According to the Kaiser poll, 50 percent of respondents would prefer to expand the law or keep it in place; just 40 percent want to repeal it outright or replace it with an alternative.  That could be a problem, since House Energy and Commerce Health Subcommittee Chairman Joe Pitts said that a “replace” plan is on the subcommittee’s to-do list, at approximately the same time that the Supreme Court is expected to rule.  Pitts hopes that his caucus will be able to seize the opportunity to sway public opinion: “We’ll have a window of opportunity to — with everyone looking — to explain that the Affordable Care Act is not fully implemented yet.  A lot of people think it is.  So we’ll use that opportunity in that window to discuss the full ramifications of the Affordable Care Act and what we’ll replace it with.”

For example, Justice Elena Kagan (who was Solicitor General at the time the ACA was passed and has recused herself from the Supreme Court case) and noted Supreme Court litigator and Harvard Law Professor Laurence Tribe, who worked for the Justice Department at the time, had an email exchange in which they discussed the pending healthcare vote.  “I hear they have the votes, Larry!!  Simply amazing,” Kagan wrote to Tribe in an email.

“So healthcare is basically done!” Tribe responded to Kagan.  “Remarkable.  And with the Stupak group accepting the magic of what amounts to a signing statement on steroids!”  The “Stupak group” refers to then-Representative Bart Stupak (D-MI), who masterminded a group of House Democrats who had indicated they would not vote for the ACA if it permitted federal funds to pay for abortions.  Ultimately, Stupak and his allies voted for the bill, even though no additional language was added that would prevent federal funding for abortions.

Writing for, contributor Curt Mainwaring muses on what will happen if the Supreme Court upholds the ACA. “If the Supreme Court rules that ACA is constitutional, healthcare costs will likely continue to rise — although at a slower rate than if the law were determined to be unconstitutional.  Healthcare costs currently make up approximately 18 percent of gross domestic product.  If expenditures continue on their current trajectory, ‘the share of GDP devoted to healthcare in the United States is projected to reach 34 percent by 2040.’  In more intimate terms, the Department of Health and Human Services demonstrates individuals paid approximately $1,000 per year in healthcare costs in 1960, more than $7,000 per year in 2007, and are projected to pay more than $13,000 per year by 2018.

“Simply put, this kind of a rise in healthcare costs is unsustainable — and these kinds of projections are part of the reason ACA was created in the first place.  Nevertheless, claims of ACA’s positive impact on the economy have likely been overestimated.  ACA focuses heavily on reducing the cost of health insurance — a factor that will likely result in reduced insurance costs.”

AMA: Lack of Competition Among Healthcare Insurers

Monday, October 31st, 2011

More than four out of five metropolitan areas do not have a competitive commercial health insurance market because mergers and acquisitions have allowed some insurers to increase their market share, according to a report issued by the American Medical Association.

The report studied 368 metropolitan markets and 48 states, and determined that 83 percent had minimal competition among health insurers.  In approximately 50 percent of markets, at least one insurer maintained a majority market share of 50 percent or more.  In half of the states studied, the two largest health insurers had a combined market share of 70 percent or more.  The data shows “the degree of anti-competitive market clout” that some insurers have accrued through mergers and acquisitions, which decreases competition for patients, physicians and employers, said AMA President Peter W. Carmel.  Alabama occupied the last place, followed by Alaska, Delaware and Michigan.

According to Carmel, “Our new report is intended to help regulators, lawmakers, researchers and policymakers identify markets where mergers among health insurers may cause competitive harm to patients, physicians and employers.”

This latest edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets is the most comprehensive analysis to date, reporting commercial health insurance market shares and federal concentration measures for all 48 states.  The scope of the analysis provides a comprehensive snapshot of fully-insured and self-insured enrollments for both health maintenance organizations (HMOs) and preferred provider organizations (PPOs).

One conclusion is “A significant absence of health insurer competition exists in 83 percent of metropolitan markets studied by the AMA.  These markets rated ‘highly concentrated’, based on the newly revised Horizontal Merger Guidelines issued last year by the U.S. Department of Justice and Federal Trade Commission.

“The market power of health insurers places physicians and patients at a significant disadvantage,” Carmel said.  “When insurers dominate a market, people pay higher health insurance premiums than they should, and physicians are pressured to accept unfair contract terms and corporate policies, which undermines the physician role as patient advocate.”

Physicians are the least concentrated segment of the healthcare sector with 78 percent of office-based doctors working in practices with nine physicians or less.  The majority of those are in either solo practices or offices with between two and four physicians.

“The market power of health insurers continues to prompt anti-competitive concerns among physicians,” Carmel said.  “To help restore a competitive balance to health insurance markets, the AMA urges the federal and state agencies to prohibit harmful insurance company mergers and adopt policies that would level the playing field between small physician practices and large insurers.”

Writing in the Washington Post,  Ezra Klein points out that one of the major goals of the Patient Protection and Affordable Care Act (ACA) is to create a competitive insurance market.  “This is the bill’s first, and most important, step.  Right now, the insurance market’s version of competition is pretty brutal.  Companies compete to avoid the sickest people and sign up the healthiest people.  Offering the best coverage for the lowest cost isn’t much of a priority, because most consumers don’t know whose coverage is best, and the ones who really do know are probably sick customers who spend their days researching this stuff.

“Outlawing the bad kind of competition while enabling the good kind, which the bill does, is more than just a humanitarian measure.  It’s a cost control.  The insurance ‘exchanges’ imitate the market in which federal employees (including congressmen) purchase their health insurance. In the exchanges, insurance products have to be above a minimum level of comprehensiveness (no more insurance that doesn’t cover anything) and their benefits have to be presented in a standard, comprehensible way.  The insurers themselves can’t discriminate based on pre-existing conditions, will have to answer to regulators if they attempt to jack up premiums, and will be rated by their customers — a rating that everyone else will see when shopping for their insurance,” according to Klein.

“If all goes well, consumers will be able to log onto the exchange’s website, compare insurance plans and choose their favorite.  That means insurers will have to compete for customers in a more transparent market, where shoppers have more information, and where the relationship between price and quality is more obvious.  As any free-market conservative will tell you, that should drive prices down and quality up.  If it doesn’t, insurers will have some annoyed legislators to answer to: The bill says congressmen and their staff members need to buy their insurance from these exchanges, too.”

Is the Affordable Care Act on a Fast Track to the Supreme Court?

Tuesday, March 29th, 2011

As Virginia seeks review of the Patient Protection and Affordable Care Act (ACA) by the United States Supreme Court, the move hasn’t impressed the Obama administration, which is urging the high court to not allow bypassing federal appeals courts.  The administration feels so strongly about a go-slow approach to sending the law to the Supreme Court for a decision on whether it is constitutional that the Department of Justice has filed a brief stating that they are in no hurry.  The brief notes that “Accordingly, granting certiorari before judgment in this case would not necessarily result in significantly accelerating the Court’s review of the constitutionality of the minimum coverage provision.”

The brief, filed on behalf of Health and Human Services Secretary Kathleen Sebelius, said “Especially given the imminent consideration of this case, there is no basis for short-circuiting the normal course of appellate review.”  The move was in reaction to Virginia’s Attorney General Ken Cuccinelli’s efforts to have its lawsuit bypass the appellate process and go directly to the Supreme Court.  Virginia has appealed regulatory amendments implemented by the healthcare reform law, arguing that federal government has surpassed its powers as defined in the Constitution.  Additionally, Cuccinelli says the Affordable Care Act is an issue of national importance that requires Supreme Court’s mandate.  The regulatory amendments include the compulsory purchase of health insurance by citizens, who must pay a penalty if they refuse to comply with the law.

Acting Solicitor General Neal Katyal wrote,  “there is no basis for short-circuiting the normal course of appellate review” and the Virginia case may lack sufficient standing.  Additionally, the case challenges the law’s mandate to buy health insurance, which does not go into effect until 2014.  In January, a Virginia federal struck down the mandate and the case now goes to the appeals court level.  In other challenges, a judge in Florida ruled against the whole law; three other federal judges have upheld the law.

Cuccinelli believes that the Supreme Court needs to act quickly to bring balance to differing lower court rulings on the healthcare reform law.  In the unlikely event that the Supreme Court agrees to hear Cuccinelli’s case, it probably would not be considered until the new term begins in the fall of 2011.  The Supreme Court has rarely agreed to hear cases prior to full review by the lower courts.

2012 Budget Has Funds to Reform Medical Liability Laws

Wednesday, March 2nd, 2011

In a move that builds on the healthcare reforms contained in the Patient Protection and Affordable Care Act – and one that will make physicians very happy — President Barack Obama’s fiscal 2012 budget includes $250 million in grants over the next three years to subsidize efforts to help the states overhaul their medical liability laws. If the budget passes, the grants will be administered by the Justice Department in consultation with the Department of Health and Human Services (HHS).  As much as $100 million will be disbursed in fiscal 2012, with $50 million in each of the succeeding three years.  According to the Justice Department’s budget outline, the grants will fuel reforms that “fairly compensate patients who are harmed by negligence, reduce providers’ insurance premiums, weed out frivolous lawsuits, improve the quality of healthcare, and reduce medical costs associated with defensive medicine.”  The grants build upon $25 million in grants HHS awarded last June through the Agency for HealthCare Research and Quality safety and medical liability demonstration projects by states and health systems.

“I think the president is very serious about following up on this,” HHS Secretary Kathleen Sebelius,  whose agency would advise the Justice Department on awarding the grants, told the Senate Finance Committee.  Specific reforms might exclude caps on jury awards that the American Medical Association and Republican lawmakers have wanted for years.  At the same time, they include measures unacceptable to trial lawyers, a group that contributes heavily to Democratic candidates.

Philip K. Howard, chairman of Common Good, described the budget item as “A very significant moment for controlling healthcare costs.” Based in New York, Common Good has taken the lead in supporting special courts in which judges with healthcare backgrounds would resolve medical liability cases.  “With this budget item, President Obama is moving beyond bipartisanship and, in effect, saying that the country can no longer afford the rising healthcare costs that defensive medicine unnecessarily fuels,” Howard said.  President Obama also called for tort reform legislation in his 2011 State of the Union address.

The cost of defensive medicine to American healthcare consumers is not easy to estimate. Conservative estimates place the cost at approximately $50 billion a year.  The Obama debt commission estimated that its recommendations could save government programs $17 billion through 2020, calling for an aggressive effort to rewrite malpractice laws.

Gibson Vance, president of the American Association for Justice, described the proposal as “bad policy and bad for patients.”  The president’s proposal also got a chilly reception from congressional Republicans, who contend that he has promised more on malpractice than he has been able to deliver.  Obama initially voiced an interest in the issue during the lengthy healthcare reform debate.  He has opposed another malpractice alternative: capping the amount a patient can receive in a medical liability case.  This alternative is favored by many physicians and Republicans, but opposed by the majority of Democrats.

“These grants will help states reform their laws to pursue innovative approaches that will improve the quality of healthcare, fairly compensate patients who are harmed by negligence, reduce medical costs and liability, and protect patient safety,” said Justice Department spokeswoman Tracy Schmaler.