Health Affairs: "The Impact Of The Election On Health Policy And The Courts"

The nonpartisan and highly respected journal, Health Affairs, today posted an analysis of some of the more conspicuous (and worrying) changes to the health care scene we might expect to see once Donald Trump's administration is in place. It is, as usual, well worth reading in whole.

The areas that are discussed include:

• the Affordable Care Act (ACA) (primary concern: allowing premium tax credit enhancements to expire entirely after 2025, which could result in 4 million people losing their health insurance coverage; also -- whether by statute, agency regulation, or executive order -- any number of the ACA's protections are at risk)
• Medicaid (during the campaign Trump vowed to leave Social Security and Medicare alone; "experts noted that Medicaid was conspicuously absent from the conversation")
• reproductive health care (abortion, LGBTQ nondiscrimination, reviving the Comstock Act, changing the Administration's position in state and federal lawsuits)
• nondiscrimination and health equity ("Health care is a civil rights issue. . . . Anti-discrimination protections in health are also likely to suffer major blows going forward."
• Medicare Drug Negotiation Program (hard to believe that a program that will save the government and citizens billions will be watered down, but Big Pharma has hated this law from the beginning and it has some attentive allies in the new administration)
• public health (RFK, Jr. -- need I say more? He was named as Trump's nominee for Secretary of HHS; the mind reels)
• the courts (Yup. From the Supreme Court on down, expect change)

The end. (Take that any way you want.)

SCOTUS Oral Argument Today

Just a quick addendum to my Friday listing of healthcare-related cases on the current SCOTUS docket. This morning the Justices heard oral argument in Advocate Christ Medical Center v. Becerra, No. 23-715. The question presented (and accepted by the Court as defining the scope of their review) is a dry-sounding issue of statutory interpretation: "Does the phrase 'entitled . . . to benefits,' used twice in the same sentence of the Medicare Act, mean the same thing for Medicare part A and SSI, such that it includes all who meet basic program-eligibility criteria, whether or not benefits are actually received."

Is this technical issue worth more than a minute of our time? Well, yes, it is. I point you to an excellent article in Axios by Maya Goldman. A few key points from her piece:

• Over 200 hospitals joined this case as petitioners. This is probably not a record number of parites joining together to seek review, but it's still a lot!
• Why does issue mean so much to so many hospitals? Because an answer to the question that favors the hospitals will increase their Disproportionate Share payments -- a reimbursement bump to reflect the higher average cost of treating low-income patients -- by about $1.5 billion.

As Sen. Everett Dirksen (probably never) famously said (though it is often misattributed to him*): "A billion here, a billion there, and pretty soon you're talking about real money." Enough to get the attention of nine Justices of the Supreme Court for an hour on Election Day. Oral argument audio should be posted later today.

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* https://en.wikiquote.org/wiki/Everett_Dirksen. The New Yale Book of Quotations (2021) cites to a quotation from the Jan. 19, 1938 New York Times "Topics of the Times" column: "Well, now, about this new budget. It's a billion here and a billion there, and by and by it begins to mount up into money."

Health Care Fraud: Texas Style

On Oct. 15 a federal jury in Houston convicted the owner of a firm that operated 14 pharmacies, on fifteen counts including conspiracy to commit mail fraud, conspiracy to violate the anti-kickback statute, bribery concerning programs receiving federal funds, conspiracy to commit bribery, five counts of healthcare fraud, and six counts of money laundering, resulting in $160 million in fraudulent claims that were paid by Medicare. 

As described by the Office of the U.S. Attorney for the Southern District of Texas:

From 2014 through 2021, Mohamad Mokbel led a company called 4M Pharmaceuticals which operated 14 pharmacies with straw owners. The jury heard evidence that Mokbel illegally purchased thousands of Medicare beneficiaries, including their identification number, personal health and physician information. Mokbel targeted elderly diabetic patients who are dependent on diabetic testing supplies to manage their blood sugar levels. Mokbel paid $16 to $40 per Medicare beneficiary.  

To maximize reimbursements and without regard for medical necessity, Mokbel then directed 4M employees to use the Medicare beneficiaries’ patient data to run insurance claims to determine if Medicare or other insurance plans would cover and reimburse at a high rate for the topical creams, Omega-3 pills and other medications that Mokbel intended to sell through 4M pharmacies.

At Mokbel’s direction, 4M employees would then fax pre-filled prescription requests to the patients’ doctors appearing to be for diabetic testing supplies with topical creams added at the bottom. They also included false representations that the patient was requesting a 4M Pharmacy fill their medications. In reality, Mokbel had previously purchased the patient’s personal information, the patient had not selected a 4M Pharmacy and the patient was often unaware the request was being made on their behalf. 

Many doctors apparently took the representations in the fax at face value and did sign and send back the prefilled prescription requests to 4M. Mokbel’s call center in Houston and later in Egypt then contacted the patients and made false and misleading statements about the topical cream and their doctor’s order. Mokbel’s pharmacies then shipped out numerous topical creams, often on auto-refill, and excessively billed Medicare, Medicaid and private insurance plans. 

Mokbel made over $200 million as a result of the scheme. 

The money value of the fraud is considerably less than the record for Medicare fraud, but what caught my eye was the complexity of the scheme and the lineup of law-enforcement agencies involved in the case: Homeland Security Investigations (HSI) Houston, the FBI, IRS Criminal Investigation, the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration, and the Texas Attorney General’s Medicaid Fraud Control Unit. This was a big, big deal for these investigators.

Health Care Policy and the 2024 Election

The presidential campaign hasn't been much about health law, and up to two-thirds of adults are concerned about the lack of discussion. Perhaps to remedy this situation -- or to keep the candidates honest if and when they deign to discuss health care -- the nonpartisan Kaiser Family Foundation (KFF) has just posted a new tool; here's their announcement:

A new KFF tool generates data-driven fact sheets that lay out the health care landscape in every state against the backdrop of the 2024 election.

These state “snapshots” provide information on a variety of health care topics that may be the focus of campaign and policy debates. Topics include

• health costs; 
• medical debt;
•  women’s health policy, including state abortion, contraception and maternity laws and policies;
•  health coverage, including the Affordable Care Act, Medicare and prescription drug coverage, Medicaid, and employer-sponsored insurance;
•  gender affirming care; and
•  basic information on health status, population and income. 

The new tool is part of KFF’s broader collection of Election 2024-related resources, including our side-by-side comparison of the candidates’ positions and records on health policy issues. 

Other election-related features include:

• Springfield, Ohio: How Candidates Amplify Misinformation, by KFF President and CEO Drew Altman
•  How Campaign Rhetoric Harms Immigrants, by Mollyann Brodie, executive vice president and chief operating officer of KFF and executive director of the Public Opinion and Survey Research Program
• Misinformation vs. Immigrant Experiences Using Health Insurance and Other Programs, by Samantha Artiga, a vice president at KFF and director of the Racial Equity and Health Policy Program
• Protecting People with Pre-Existing Conditions, by Cynthia Cox, a vice president at KFF and director of the Program on the ACA.
• The VP Debate May Focus on the “Working Class,” But Will They Discuss Medicaid?, by Robin Rudowitz, a vice president at KFF and director of the Program on Medicaid and the Uninsured
• A Brief History of the Affordable Care Act, by Rakesh Singh, vice president of Health Policy Initiatives at KFF
• Protecting People with Pre-Existing Conditions 

SCOTUS and Health Agencies (Part 2)

The totally excellent health-policy journal, Health Affairs, posted an analysis of the likely impact of the death of the Chevron doctrine on some hotly (or at least frequently) litigated federal health-law issues: "Supreme Court Overrules Chevron Doctrine: Ripple Effects Across Health Care," by Zachary Baron et al. (I have no idea if this article is available only to subscribers (like me) or is free to the public. The latter, I hope.)

The authors start with Chevron itself, a useful three-paragraph introduction especially for anyone -- lawyers and non-lawyers alike -- with limited or no familiarity with Chevron deference.

After that, the authors focus on six areas of possible impact as a result of the Court's decision in the Loper Bright Enterprises case (discussed by this blog on July 7):

1. Nondiscrimination Protections. This includes "the battle over the meaning of 'sex' under Section 1557 [of the Affordable Care Act], which prohibits discrimination in health care on the basis of race, color, national origin, disability, age, and sex."
2. Medicare Reimbursement. An early test might be a case currently pending before the Supreme Court for its 2024 Term: Advocate Christ Medical Center v. Becerra. As the authors point out, there are few statutes that rival the Medicare statute in complexity, and lower courts often decide these reimbursement disputes by relying on Chevron: If the statutory provision is unclear (which is often the case), the courts defer to any reasonable interpretation by HHS/CMS. That was the case in Advocate Christ Medical Center. If I had to guess, this case might be remanded for reconsideration in light of Loper Bright, but there will be others!
3. Medicare Advantage. Noting that "federal agencies often face hurdles to accomplishing their regulatory goals separate and aside from Chevron, . . . the path forward for litigation over the MA program following Chevron being overruled is not clear." Not necessarily good news for "more than half, or 51 percent, of the eligible Medicare population."
4. Medicare Drug Negotiation. BigPharma has been fighting this program since before its enactment, bringing "a slew of constitutional, statutory, and agency authority claims against the negotiation program, [and] industry has lost on the substance of all their legal arguments." Will Loper Bright help the drug makers in future court challenges to the program. The authors think not.
5. Private Health Insurance. In the more than 2,000 legal challenges to the Affordable Care Act and its volumes of regulations, Chevron has played a role in the final rulings of many cases but far from all. The authors look at a couple of cases involving the No Surprises Act that are currently pending before the Fifth Circuit. The authors conclude: "Now, the Administration and health care providers are sparring about the fallout from the Loper Bright decision and how it will impact the pending Fifth Circuit decisions. Yet with the current Fifth Circuit taking such a strict approach to statutory interpretation even when Chevron remained on the books, the Administration faces a challenging environment there."
6. FDA. Chevron deference has been "critical to allow FDA to use its expertise to administer very complex and technical programs that widely touch industry and health care consumers alike. . . . Overturning Chevron could open the floodgates to challenges of a wide variety of FDA regulations." 

The authors conclude:

This revised legal regulatory landscape opens up new opportunities to challenge regulations and other agency actions by future administrations. These challenges may affect the implementation of agency regulations addressing consumer protections, access to health care services, women’s rights, and other measures that impact health care costs. . . . The level of disruption remains uncertain, and may be felt unevenly, but the trend line remains clear: Courts more than ever will have the final say on complex policy decisions that affect the health of millions of Americans."

Oh, happy day. {sigh} 

Texas Medical Center Hospitals & Surgery Group Paid $15 Million to Settle Concurrent Surgery Violations

Press release from the U.S. Attorney's Office for the Southern District (June 24):

Baylor St. Luke’s Medical Center (BSLMC), Baylor College of Medicine (BCM) and Surgical Associates of Texas P.A. (SAT) have jointly agreed to pay $15 million to resolve claims they billed for concurrent heart surgeries in violation of Medicare teaching physician and informed consent regulations . . . .

The investigation began Aug. 7, 2019, upon the filing of a sealed qui tam lawsuit aka whistleblower complaint. The whistleblower alleged Coselli, Lamelas and Ott - three heart surgeons who performed at St. Luke’s - engaged in a regular practice of running two operating rooms at once and delegating key aspects of extremely complicated and risky heart surgeries to unqualified medical residents. The heart surgeries at issue are some of the most complicated operations performed at any hospital including coronary artery bypass grafts, valve repairs and aortic repair procedures. These surgeries typically involve opening a patients’ chest and placing the patient on the bypass machine for some portion of time.  

Medicare regulations dictate when teaching physicians can leave the operating room for any operation, no matter how complex. 

The settlement resolves allegations that from June 3, 2013, to Dec. 21, 2020, Ott, Coselli and Lamelas violated these rules in various respects. Surgeons often ran two operating rooms at once and failed to attend the surgical “timeout”— a critical moment where the entire team would pause and identify key risks to prevent surgical errors, according to the allegations.

Additionally, surgeons would allegedly enter a second or occasionally a third operation without designating a backup surgeon. At times, the surgeons allegedly hid these activities by falsely attesting on medical records they were physically present for the “entire” operation. In addition, medical staff did not inform patients the surgeon would be leaving the room to perform another operation. 

Scary? Yes, but this is not an isolated incident. There have been a number of such enforcement actions for concurrent surgeries around the country, often involving top hospitals that also run training programs (like the hospitals in this enforcement action) with (I am guessing) "star" surgeons who are in high demand.

Joanna Borman, an associate in the D.C. office of Dentons, has written an excellent analysis of some of the more notorious cases, along with her recommendations for hospitals that allow concurrent surgeries to be performed:

To ensure compliance with the Medicare rules for overlapping surgeries, providers should consider:

• updating informed procedural consent forms to clearly notify patients that their surgeon may be absent for portions of their surgery, but will be present during critical portions of the surgical procedure;
• developing institutional guidelines on “critical” or “key” portions of surgeries to ensure that all surgeons understand the requirements for overlapping surgeries;
• exploring checks and balances in surgery scheduling platforms, including the use of controls to limit or monitor surgical scheduling; and
• reviewing a medical record sample to ensure documentation of the teaching physician’s presence and the designation of any required backup surgeons is adequate to meet Medicare billing guidelines.

Ms. Borman's analysis is short, easy to read, and highly recommended. (See also, Petrie-Flom Center, "Concurrent Surgeries: Medical, Legal, and Ethical Issues" (2016, link); Washington Medical Commission, "Overlapping and Simultaneous Elective Surgeries" (2018, link); Jenn Abelson, et al., "Concurrent surgeries come under new scrutiny," Boston Globe, Dec. 19, 2015; link (possible paywall).)

Pharma Loses "Takings" Argument in NJ District Court

UPDATE to previous posts (here and here) on the Medicare Drug Price Negotiation Program in the Inflation Reduction Act. As reported by BioSpace, on April 29:

Judge Zahid Quraishi of the District of New Jersey issued summary judgment against J&J’s Janssen and BMS, dismissing their claim that the Medicare Drug Price Negotiation Program was an unconstitutional taking of their assets.

“In short, Defendants are not taking drugs from Plaintiffs,” Quraishi wrote in his 26-page ruling, according to multiple news outlets. “Selling to Medicare may be less profitable than it was before the institution of the Program, but that does not make Defendants’ decision to participate any less voluntary.”

BMS has already appealed the ruling to the Third Circuit Court of Appeals, Endpoints News reported. 

The BioSpace piece has a nice summary of the various attempts by Big Pharma to mount challenges against the program. And a comprehensive discussion of the program was posted this morning in The Washington Post (possibly one-time free access). See also Reuters, 

The district court's opinion is here.

Negotiating with Big Pharma Over Drug Prices for Medicare

You really can't blame Big Pharma for hating the new federal law that authorizes the Medicare program (for the first time in its 59-year existence) to stop buying drugs for the manufacturer's price but instead to negotiate for a reasonable price (the way the VA, state Medicaid agencies, the Defense Department, and most other countries do).

Medicare has been a predictably incredible cash cow for Big Pharma for generations, and that way of doing business is on its way out. 

The Medicare Drug Price Negotiation Program was authorized by Subtitle B (Prescription Drug Pricing Reform) of the bipartisan Inflation Reduction Act (once you're at the IRA, just do a search for "drug price"). As the Centers for Medicare & Medicaid Services (CMS) eases into this new role, it identified 10 drugs that cost the program the most (a function of price x frequency of Rx). 

Big Pharma's government-relations/lobby folks have all sorts of arguments against the program. Some question whether the government will save as much money as it predicts will be the case. Time will tell.

But one argument is more philosophical: This level of government intervention is inconsistent with the traditional "free market" system that has served patients so darned well.

There's an article in the April 25 issue of the New England Journal that refutes Big Pharma's assertion. The article is "The Myth of the Free Market for Pharmaceuticals" by Rena M. Conti, Ph.D., Richard G. Frank, Ph.D., and David M. Cutler, Ph.D. There's a "public link" that's available behind a "Share" button on the NEJM webpage. I don't know if it works for nonsubscribers, but here it is: https://www-nejm-org.foyer.swmed.edu/doi/pdf/10.1056/NEJMp2313400.

The article makes the point that the market for pharmaceutical products is not and never has been a "free market," at least not in the classic economic sense. The characteristics of a free market, the authors argue, are:

1. consumers are assumed to be fully informed, 
2. it is assumed that they choose products on the basis of their discernable benefits and costs, 
3. sellers can freely enter markets and make products similar or identical to others, and 
4. prices, set by firms seeking to maximize profits, are competitive with those of other sellers and unmodified by government intervention.

The authors conclude that "[t]he U.S. pharmaceutical market strays from all these features." The point is a basic one, and you don't need a Ph.D. to figure this out. The government issues patents that grant monopoly status to drugs, entry into the market with competing drugs depends upon FDA approval, consumers are woefully uninformed about benefits and costs (or highly dependent upon information provided by parties with very strong economic interests), and most purchasers are shielded from paying the true cost of drugs by third-party payers (insurers who may pick up 80% or more of the price).

Perhaps the more salient point to be made is that Big Pharma knows its business even better than I do, and its "free market" argument is not even intended to be technically correct. It's political speech, like the AMA's old argument against Medicare ("it's communistic" or "it's socialized medicine"). Not true, but it rings bells and sets off alarms. 

That said, "free market" is a technical phrase, and it deserves to be dispatched by reference to its technical meaning. This week's NEJM article does just that. 

$100 Million Medicare Fraud => 9-Year Sentence

Defendant Andrew Chmiel got a one-way ticket to federal prison for 9 years following his conviction for Medicare fraud, courtesy of the U.S. Attorney's office in the District of South Carolina. He was also ordered to pay $98,935,533.00 in restitution.

Touting this as one of the biggest Medicare fraud cases ever, the press release on this case described the essentials of the scheme (emphasis added): 

Chmiel’s charges were brought in 2019 as part of Operation Brace Yourself, an investigation that originated in South Carolina. Operation Brace Yourself, which was prosecuted in conjunction with the Department of Justice’s Criminal Division Fraud Section, was a multi-jurisdictional investigation that involved the execution of more than 80 search warrants in 17 federal districts.

As for Chmiel’s criminal conduct, evidence presented to the court showed that Chmiel controlled and operated at least 10 DME companies, which were located throughout the United States. These DME companies were used by Chmiel and his co-conspirators to submit false and fraudulent claims to Medicare for braces that were not medically necessary and/or were obtained through the payment of kickbacks and bribes. 

To effectuate the scheme, these DME companies entered into agreements with an offshore call center to purchase completed doctors’ orders so the DME companies could bill Medicare. This offshore call center was advertising through television and internet advertisements.  Once a Medicare beneficiary called a 1-800 number that was on the advertisements, that Medicare beneficiary would be screened for eligibility and then convinced that he or she needed a brace, and oftentimes upsold on other braces.  The call center would then contact a telemedicine company whose physician and/or or nurse practitioner would issue a prescription without regard to the medical necessity.  Throughout the investigation the evidence revealed that beneficiaries were prescribed braces without ever being examined by, seeing, or, in some instances, even speaking to a medical professional. Evidence presented showed that Chmiel was attempting to hide that he was purchasing completed doctors’ orders by creating fraudulent and false invoices for alleged marketing and business processing services.

Throughout the health care fraud scheme, Chmiel’s companies, which included 10 DME companies, two dropship companies, and two additional companies that were used to facilitate the fraud – D.O. Delivery and Pain Center – billed Medicare in excess of $200 million and Medicare paid Chmiel’s companies in excess of $95 million.

For the past two decades, durable medical equipment has been a fertile field for fraud and, correspondingly, for federal fraud prosecutions. The perpetrators of these schemes apparently fail to take into account the investigatory tools available to the Department of Justice and the fact that the government has computers that can crunch a lot of Medicare claims. $200 million worth of DME orders from 10 DME companies was bound to be picked up by some computer's filter or algorithm. 

Biden's State of the Union Address: 13 Health Care Take-aways

Becker's Hospital Review takes a look at "13 healthcare takeaways" from President Biden's State of the Union address last evening. They include:

1. Expanding Medicare's drug price negotiation scope
2. Limiting drug costs
3. Expanding rebate requirement
4. Closing Medicaid coverage gap [for 10 states, including Texas, that haven't expanded eligibility]
5. Capping the cost of insulin
6. Abortion access
7. COVID-19
8. Affordable Care Act
9. Women's health
10. Taxes
11. Gun violence
12. PACT Act [Resources for Veterans]
13. ARPA-H (Advanced Research Projects Agency for Health ) 

One Guy, $234 Million Medicare Fraud Scheme

 

With a name that could be right out of Dickens novel, Imran Shams puts most other health care fraudster to shame. What he lacks in imagination -- his fraudulent conduct was pretty middle-of-the-road stuff -- he more than makes up with old-fashioned doggedness. The DOJ-OIG summary is illuminating:

A California man was sentenced today to 10 years in prison for conspiring to conceal his involvement in operating a laboratory and billing Medicare approximately $234 million for various lab tests, including COVID-19 and respiratory pathogen panel tests, despite his decades-long exclusion from the Medicare program.

“Criminals who cheat federal health programs and profit at the expense of American taxpayers will be met with the full force of the Justice Department,” said Attorney General Merrick B. Garland. “As our country was battling the COVID-19 pandemic, this individual was fraudulently billing Medicare for hundreds of millions of dollars. Today, thanks to the work of the Justice Department’s Criminal Division, he will now spend 10 years in federal prison for his crimes. We will continue to disrupt schemes that defraud the federal health programs the American people rely on, and we will hold accountable those who perpetrate those schemes.”

According to court documents, Imran Shams, 65, of Glendale, was convicted of Medicare and Medicaid fraud in separate 1990 and 2001 cases in New York and California, respectively. After each conviction, he was excluded from participation in Medicare and all federal health care programs, and advised by the Department of Health and Human Services Office of Inspector General (HHS-OIG) that he had to submit a written application to be considered for reinstatement in federal health care programs. Shams never sought reinstatement, yet he continued to operate health care clinics in New York that billed federal health care programs. In November 2017, Shams pleaded guilty to conspiracy to pay and receive health care kickbacks and other charges in the Eastern District of New York related to his operation of these clinics.

By 2018, Shams was an owner, operator, and manager of Matias Clinical Laboratory, doing business as Health Care Providers Laboratory (HCPL), a Baldwin Park, California-based clinical testing laboratory that billed Medicare and other federal health care programs. In order to maintain HCPL’s status as a Medicare provider and enable it to receive payments from Medicare for its testing services, Shams and a co-conspirator fraudulently concealed Shams’ role in HCPL from Medicare, including failing to submit required enrollment documentation identifying Shams’ ownership, management position, and prior convictions; causing the submission of false documentation to Medicare identifying another person as HCPL’s sole owner and managing officer; submitting false documentation concerning HCPL’s ownership and management to the California Department of Public Health; and making false statements to the U.S. Probation Office and Pretrial Services Agency while Shams was on federal court supervision following his 2017 conviction. Between August 2018 and April 2022, when the grand jury returned the indictment in this case and Shams was arrested and ordered detained without bond, HCPL fraudulently billed Medicare approximately $234 million. Medicare paid HCPL approximately $31.7 million based on these fraudulent claims.

Shams pleaded guilty in the Central District of California on Jan. 24, 2023, to conspiracy to commit health care fraud and concealment of his exclusion from Medicare.

In addition to the term of imprisonment, Shams was ordered to forfeit $31,761,286.21, including $4,513,106.30 in funds that the government previously seized from two bank accounts, as well as his interest in two residential properties and one business property in the Los Angeles area. Shams was also ordered to pay $31,761,286.21 in restitution.

“Shams engaged in a years-long scheme in which he billed American taxpayers nearly $234 million and lined his pockets with millions of dollars of funds intended for the health and welfare of patients,” said FBI Director Christopher Wray. “This case demonstrates the FBI’s commitment to rooting out fraud to help ensure critical healthcare funds go where they are needed most.”

Physician Acquitted in $15M Healthcare Fraud Prosecution

A federal jury in Maryland convicted the physician on five counts of healthcare fraud in connection with his billing practices for level 4 CPT codes for evaluation and management services (E/M) for Covid patients. According to Becker's Hospital Review:

Ron Elfenbein, MD, 49, owned First Call Medical Center and Chesapeake ERgent Care, which operated multiple drive-thru COVID-19 testing sites. He instructed employees, in addition to billing for COVID-19 tests, to bill for high-level evaluation and management visits, according to an Aug. 4 Justice Department news release. Dr. Elfenbein ordered the high-level visits to be billed for all patients, including those who were asymptomatic, getting tested for their employment requirements or being tested so that they could travel, according to the release. Dr. Elfenbein was accused of submitting false claims for tens of thousands of high-level visits that were ineligible for reimbursement. 

As analyzed by Husch Blackwell:

[U]nlike some CPT codes, E/M CPT codes are imprecise. There is purpose in E/M CPT codes’ imprecision in that it allows physicians flexibility to exercise their best judgment given the multitude of factors that go into medical decision-making.

But that imprecision in E/M CPT codes makes for difficult federal prosecutions. As the court held in overturning Dr. Elfenbein’s convictions, CPT codes’ “imprecision does not necessarily integrate well with the clear notice and due process guarantees of our criminal law” and “where the relevant CPT codes and related definitions are ambiguous and subject to multiple interpretations, problems clearly arise.” 

Does this mean DOJ can't win ambiguous-CPT code cases? Not at all (from Husch):

The court was careful to make clear that it is possible for the Justice Department to successfully prosecute defendants who take advantage of ambiguous CPT codes, but that such prosecutions must show objective falsity in a way the prosecutors failed to do in Dr. Elfenbein’s trial. The “Government sails in shallow waters when it prosecutes a case of this type; these cases require careful navigation,” wrote the court.

To make its point, the court pointed to several cases in which the Justice Department was able to navigate ambiguous waters, including one E/M CPT case in which the prosecution’s expert testified the medical judgment was “not even close to being properly classified” at the code’s level. And so, while prosecutions based on ambiguous CPT codes are clearly an uphill battle for the Justice Department, they are not insurmountably uphill. 

The district court's 90-page opinion is here. 

Medicare Cognitive Assessments: Yet Another Example of Mental Health's Second-Class Status

A new GAO report -- "Medicare Cognitive Assessments: Utilization Tripled between 2018 and 2022, but Challenges Remain" (Dec. 11) -- is a good-news/bad-news sort of thing. 

First, the (somewhat) good news: “Cognitive assessment and care plan services” is a service available to Medicare beneficiaries in which providers diagnose and develop a plan to manage cognitive impairments, such as Alzheimer's disease. . . . GAO found that use of the service in traditional fee-for-service Medicare tripled from 2018 through 2022." Demand undoubtedly increased, due in part to the stresses and challenges of COVID. 

And it's possible that utilization of this Medicare service also increased because of increased availability and awareness.

But the bad news suggests otherwise: "[A] relatively small number of Medicare beneficiaries diagnosed with a cognitive impairment received the service. GAO calculated that, at most, in 2021, about 2.4 percent of traditional Medicare beneficiaries with a diagnosis of Alzheimer's disease or a related disorder may have received the service." 

Possible explanations for this low level of service within the population of the elderly cognitively impaired include: "various challenges faced by providers delivering the cognitive assessment service and beneficiaries trying to access the service. Provider challenges include (1) the time needed [60 minutes of face-to-face interaction], particularly for providers who typically schedule 15-20-minute visits; (2) billing limitations that prevent providers working in teams to collaborate on the service visit; and (3) limited training for primary care providers [who provide more than 80% of Medicare cognitive assessments]."

But wait -- there's more: 

"Some stakeholder groups reported that the stigma of being assessed for, or being diagnosed with, a cognitive impairment is a challenge for beneficiaries. Research we reviewed found that individuals aged 40 and older have stigmas or negative thoughts and perceptions regarding cognitive impairments and potentially being diagnosed with these conditions. Both beneficiary advocacy groups and the policy group we interviewed noted that such stigmas can make beneficiaries hesitant to access the cognitive assessment service. According to one primary care provider group, the very act of performing a cognitive assessment implies to a beneficiary that a cognitive impairment exists. Additionally, five stakeholder groups noted that beneficiaries’ understanding of cognitive impairments and the services available to them may be related to perceptions of stigma, or negative thoughts and perceptions about their conditions. Further, research has found that stigma, including worry, fear, and shame, is known to interfere with and delay seeking important medical care for cognitive impairments." [footnotes omitted]

Despite repeated legislative attempts over the decades, mental health impairments continue to be under-diagnosed and under-treated. As this report illustrates, the problems are both structural and behavioral. La plus ça change . . . .

What Is a Hospital to Do When a Patient Refuses a Discharge?

Here's the scenario: A patient is admitted to the hospital for treatment. Treatment goes well, and the patient can safely be discharged to home. But the patient refuses to leave the hospital. If the patient lacks decision-making ability, the surrogate decision-maker may be refusing on the patient's behalf. Either way, a patient who no longer needs hospital-level care continues to consume hospital resources -- a bed, nursing time and attention, housekeeping, dietary, etc. -- without a discernible medical advantage.

There are lots of ways to respond to the refusal to leave, mostly involving a sensitive exploration of the social, familial, financial, emotional or other reasons for the refusal. Sometimes it is possible to make arrangements that can address the patient's (or surrogate's) concerns.

As reported in the Los Angeles Times (and reprinted by KFF News (Nov. 15)), San Francisco-based Dignity Health, a tax-exempt organization Catholic hospital system with $9.5 billion in revenue, is trying another approach: sue the patients for trespass. In three cases, Dignity Health has invoked a California law intended to prevent anti-abortion demonstrators from obstructing entry to healthcare facilities, accusing the patients of "commercial blockage" for "unreasonably and unlawfully" refusing to be discharged once they were deemed medically and legally eligible. Dignity claims the actions hindered its ability to care for other patients during COVID-19 surges. 

Unsurprisingly, the patients claim a right to be discharged to a facility that offered appropriate care and that they could afford, not simply sent home without the ability to take care of themselves. As described by California Disability Rights, state and federal law (Medicare's Conditions of Participation) provide significant protections against hospital discharges that aren't safe, so the outcome in these cases is likely to turn on very fact-specific considerations.

One of the cases is scheduled to go to trial on November 15. More later . . . .

Chamber of Commerce Is Denied an Injunction to Halt Medicare Drug Price Negotiations

Happy to do the bidding of Big Pharma, the US Chamber of Commerce sued the Biden Administration to stop the Drug Price Negotiation Program created by the federal Inflation Reduction Act,  42  U.S.C.  §§ 1320(f), et  seq in its tracks on the theory that this program violates due process. The Chamber was joined by a handful of affiliates -- along with AbbVie, Inc., manufacturer of the lucrative Imbruvica (used to treat Chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL)) and is one of eight such suits filed around the country.

On Friday a Trump appointee in the Southern District of Ohio denied the Chamber's motion for a preliminary injunction, as well as the government's motion to dismiss. The opinion is a Civil Procedure teacher's dreams, covering such juicy first-years topics as:

• subject-matter jurisdiction
• standing, especially associational standing
• ripeness
• the standards for a preliminary injunction, especially irreparable harm if denied and likelihood of prevailing on the merits.

Dayton Area Chamber of Commerce v. Becerra, S.D. Ohio, September 29, 2023, No. 323cv00156SDOh/5.

It's hard to say how long this victory for HHS will last. Plaintiffs were ordered to file an amended complaint by October 13, and HHS will have until October 27 to respond, so it will be at least November before there's another ruling. Meanwhile, discovery will continue.

Provider Screws Up its Bill to Medicare, Tries to Stick Patient with 100% of Charge

Today's featured Surprise Bill of the Month (KFF Health News, NPR (July 27, 2023)) involves a 74-year-old gentleman who needed vascular surgery in his leg to relieve pain caused by low circulation. He got the surgery, and it provided him with some relief. The relief was short-lived, though, when a collection agency started sending notices of delinquency in pay for the anesthesia services to the tune of $3,000. The patient is on Medicare and is a long-time owner of a supplemental policy from Humana. His reasonable expectation was that Medicare would be the primary payer and Humana the secondary, and that his out-of-pocket payment would be $0.

After much effort, the patient -- his wife, actually, who worked tirelessly to get a little justice -- discovered that the anesthesiology firm (private-equity-owned North American Partners in Anesthesiology, with thousands of providers in 21 states) failed to bill Medicare until 17 months after the surgery. Medicare requires all bills to be submitted within 12 months and refused to pay. Humana's supplemental policy doesn't pay if a service isn't covered by Medicare. Also, the bill submitted to Medicare, in addition to being late, show that a nurse anesthetist and an anesthesiologist were both present for the entire duration of the surgery, which is a red flag for Medicare and required explanation before Medicare will pay. According to the story, "A [Medicare] quarterly summary notice said while the time limit for filing the claims had expired, [the patient] also could not be billed." That should have been the end of it, right?

Instead of simply eating the charge, NAPA billed the patient for the full $3,000. (The patient says the first he knew of the bill was when he was contacted by a collection agency.) To noöne's surprise, the "News & Insights" page on NAPA's website has no mention of this national story. Meaning no disrespect for Mom-and-Pop businesses everywhere, this is the kind of screw-up that you might expect from a small, family-owned practice that struggles to keep up with the paperwork demands of a busy medical practice. But NAPA is one of the big boys. It has computers and presumably employs billing specialists to keep track of its "thousands of providers in 21 states." 

Pharmaceutical Firms Seek to Block Price Negotiations with Medicare

The New York Times has an excellent piece (23/24 July) on the drug industry's efforts to derail drug-pricing negotiations with Medicare that are authorized by the Inflation Reduction Act. As the deadline for starting negotiations nears, lawsuits have been filed by Johnson & Johnson; Bristol Myers Squibb;  Astellas Pharma; the National Infusion Center Association (NICA), the Global Colon Cancer Association (GCCA), and the Pharmaceutical Research and Manufacturers of America (PhRMA) (read here); and Merck. 

As the Times piece points out, the policy arguments for and against  price negotiations focus on (1) how much of a financial hit the firms will take as a result of lower prices for drugs covered by Medicare and (2) the impact of those reductions on R&D and ultimately on the number of new drugs that will not get to market over the next decade:

A study released last month that was funded by the Biotechnology Innovation Organization . . . warned that the pricing provisions would discourage innovation, resulting in as many as 139 fewer drug approvals over the next 10 years.

But that assessment is at odds with an analysis by the [nonpartisan] Congressional Budget Office, which estimated that the law would result in only one fewer drug approval over a decade and about 13 fewer drugs over the next 30 years. 

The calculations are actually quite difficult to nail down. Consider, for example, that we don't know which drugs will be included in future negotiations (and therefore what the projected savings to Medicare will be). And then there's the spillover effect. Most if not all the most expensive drugs whose prices will be negotiated have competitors, and there is likely to be an effect on the competitors' drug prices. Modeling all these variables can account for much if not all of the difference between the two estimates, but I will take any estimate from a pharma trade group with a large dose of salt.

Reducing mortality rates in hospitals: Good. Tying reductions to executive comp: Bad

Becker's Healthcare reports (June 21, 2023) that clinicians at various HCA facilities are pressured to refer patients to palliative care and hospice in order to move those patients' deaths off the hospital's books, thus lowering the mortality rate reported for that hospital. More on that below, where I analyze the ethics of the reported practice. But I don't want to bury the lede, so it's important to understand that executive compensation within the ranks of HCA, from the corporate CEO on down to hospital execs, is based in part upon lowering mortality rates. It is hard for me to see this linkage as anything but an invitation to distort and corrupt end-of-life care in these hospitals. HCA denies every aspect of the story.

[The story in Becker's is based upon an NBC News report. Having read both, I can say that the version in Becker's is a faithful rendition of the NBC News report. I've linked to both in this post because hyperlinks to stories don't last forever.]

Reducing hospital mortality rates

1. Reducing hospital mortality rates is an admirable goal. For decades hospitals have been enjoined to fight hospital-acquired infections, reduce rapid readmissions, and address various systemic weaknesses in the delivery of quality health care to reduce avoidable morbidity and mortality.
2. Palliative care is a valuable service. Study after study shows greater patient satisfaction with interactions with palliative staff than with with members of the treatment team. In my experience, a hospital's introduction of a palliative care service usually leads to an almost immediate and quite dramatic decrease in requests for consultations with the hospital's ethics committees. This "ethics prophylaxis" -- engaged listening and honest communication that addresses confusion, disagreements, and distress before there is a breakdown in patients' and families' trust in their treatment team -- contributes to the quality of care provided by the team. It's like dealing with small flare-ups before they turn into a conflagration. Ethics committees are often brought into the conversation too late to accomplish a break-through. (It's one reason among many that the model for ethics consultations is mediation, which seeks compromises that are limited in duration and scope.) Also, palliative care consultants are in a position to build a relationship with the patient and family over time. By contrast, ethics committee members walk into a consultation room without the benefit of that healthy relationship. (They also don't walk in with the burden of a bad relationship. Being a neutral has its advantages, though not all patients and families see the ethics team as neutral.) One final point: Palliative care isn't just about end-of-life care. It's appropriate anytime that a seriously ill patient might benefit from expert interactions that address the physical, psychological, or spiritual suffering the patient is experiencing. And with a common but often lethal diagnosis like metastatic cancer, on average it's been found to result in longer lives of higher quality. All of this is to say that a hospital or health care system that encourages appropriate referrals to the palliative care service is doing a good thing, not a bad thing.
3. Much the same can be said for hospice care. It's a valuable multidisciplinary service that addresses a similar set of needs as palliative care. It is also underutilized. Medicare covers 6 months (180 days) of hospice care based upon the reasonable judgment of a physician that the patient is likely to die within those 6 months. (This can be extended if the patient is still alive at the end of 6 months as long as the physician can reasonably determine that the patient is likely to die within the next 6 months.) The reality is that the average lifetime lengths of stay is about 3 months and for a single hospice stay about 50% of patients die or are discharged in less than 2.5 months (source). Encouraging earlier use of hospice is a good thing (as long as the referrals are appropriate) because of the integration of hospice and palliative care for the benefit of the dying patient.

Tying palliative care and hospice referrals to executive compensation is a really bad idea.

1. HCA's policy creates the impression that referrals to what is generally regarded as high quality end-of-life care are made for third-party financial gain and not the needs of the patient. Well, it's actually more than an impression, isn't it? That's exactly the situation that HCA's compensation scheme creates. 
2. Stories like this give the false impression that palliative care physicians and their staffs are inclined for their own reasons to push patients into end-of-life treatments prematurely. If the result is patient or family refusals to accept the referral, the result is often suboptimal care for the patient: the loss of an opportunity for higher quality care whether death is imminent or not.
3. The article illustrates how the pressure from above creates moral distress on the part of attending physicians and other clinical staff. Practicing medicine is hard enough in this day and age without creating yet another conflict of interest (or its appearance) to be negotiated or finessed.
4. Not to be petty, but the base pay of HCA's corporate CEO is already $35.3 million for the two years this incentive has been in place, of which the compensation incentive in question accounted for $305,400. And why? Because $17.8 million a year just isn't enough?

Billions (and Chevron?) at Stake in SCOTUS's Medicaid Case

It's a health-law-heavy docket this year over at SCOTUS. Next up for oral argument (Nov. 29) is Becerra v. Empire Health Foundation (No. 20-1312; SCOTUSBlog summary). The case involves the somewhat mind-numbing question of how to calculate the "Medicare fraction," one of two ratios that, when combined, determine whether a hospital is entitled to supplemental Medicare reimbursement adjustments  as a Disproportionate Share Hospital (DSH) -- that is, a hospital that provides care to a large number of low-income patients. A 2004 change in the calculation of the Medicare fraction resulted in higher DSH payments to some hospitals and lower payments to others. The other fraction is the "Medicaid fraction."

This is a statutory-interpretation question: do the phrases “entitled to benefits under [Medicare] part A” [42 U.S.C. § 1395ww(d)(5)(f )(vi)(I)] and "eligible for medical assistance under [Medicaid]" [42 U.S.C. § 1395ww(d)(5)(f)(vi)(II)]. Professor Alison K. Hoffman does a nice job unpacking the issues over at the Commonwealth Fund's blog.

HHS's merits brief makes a strong pitch for Chevron deference. With the conservatives on the Court grousing about Chevron for the past decade or two, it will be interesting to see how far the government is pushed on that point during oral argument.

SCOTUS Grants Cert. in Three Health Law Cases

From SCOTUSBlog (with additional cites and links):

Ruan and Kahn

In Ruan v. United States (20-1410; opinion below) and Kahn v. United States (21-5261; opinion below) the justices agreed to decide whether a doctor who has the authority to prescribe controlled substances can be convicted for unlawful distribution of those drugs when he reasonably believed that his prescriptions fell within professional norms. The question came to the court in April in the case of Xiulu Ruan, an Alabama doctor who specialized in pain management. The government contended that the doctor had prescribed medicine outside the standard of care – for example, prescribing opioids when physical therapy or a detox facility would have been more appropriate. Ruan countered that he had always acted in good faith, making individual assessments of what each patient needed.

The second case came to the court in July. The doctor in that case, Shakeel Kahn, argued that he did not know that his patients were abusing or selling the medicine that he prescribed for them — primarily opioids. He was sentenced to 25 years in prison. The justices granted both cases and consolidated them for one hour of oral argument.

Marietta Memorial Hospital (20-1641; opinion below)  

The justices also will weigh in on a dispute filed by DaVita, the country’s largest dialysis provider, over the interpretation of the Medicare Secondary Payer Act, which bars health plans from considering whether an individual is eligible for Medicare benefits because they suffer from kidney failure. A health plan also cannot provide different benefits to such individuals than they provide to others covered by the plan. After the U.S. Court of Appeals for the 6th Circuit ruled that the Marietta Memorial Hospital health plan discriminates against patients with kidney failure by providing less coverage for dialysis, the plan came to the Supreme Court, which granted its petition for review on Friday.