JAMA: SCOTUS Decision on Race in College Admissions Will Worsen Health Care Inequities

New online and free article in JAMA: "The Supreme Court’s Rulings on Race Neutrality Threaten Progress in Medicine and Health," by public health scholars Harald Schmidt, Lawrence O. Gostin, and  Michelle A. Williams.

The first paragraph should whet your appetite for more:

In landmark rulings, the US Supreme Court significantly restricted race-conscious admissions policies in higher education, a chilling echo of its evisceration of settled law on abortion. In principle, race neutrality is desirable—but it is one thing to set aside race in a society with genuine equal opportunity, and another to do so where stark differences persist in opportunities and outcomes, fueled by a 400-year history of systemic racism. While the Court focused on education, its rulings could have broad and pernicious implications for health. They could upend programs designed to achieve equity and actively harm population health.

Private Solutions to Address Disparities in Access to Health Care

The excellent journal Health Affairs has kicked off another series of articles in their Forefront feature "Private Sector Solutions for Health Equity." Today's essay is "Public-Private Partnerships To Advance Cardiovascular Health Equity: The Million Hearts Initiative" by Yvonne Commodore-Mensah (Johns Hopkins), Oluwabunmi Ogungbe (Johns Hopkins), and Lisa A. Cooper (Johns Hopkins, 2007 MacArthur Fellow, elected member of National Academy of Medicine). 

There will apparently be four articles this week running through Friday, July 18. Stay tuned . . . 

False Claims Act Settlement with EHR Provider for $31 Million

First, $31 million is a significant piece of change. Second, this was a qui tam relator ("whistleblower") case initiated by two health care professionals at a facility that used the defendant's software; the relators  collected $5.58 million for their trouble. Third, it represents a rare foray by the government into the world of healthcare tech; defendant was NextGen Healthcare Inc. (NextGen), an electronic health record (EHR) technology vendor.

In brief, NextGen was accused of selling EHR software that wasn't properly tested or certified. Medicare money was paid for the development of the software, and NextGen's assertion that its software was properly tested and certified was false. The company was also accused of violating the Anti-Kickback Law, which makes it illegal to pay anyone anything (directly or indirectly, overtly or covertly, in cash or in kind) for a referral (or to induce a referral) of an item or service for which a federal health program (like Medicare) will pay. According to the announcement from DOJ's Office of Public Affairs, "NextGen [allegedly] knowingly gave credits, often worth as much as $10,000, to current customers whose recommendation of NextGen’s EHR software led to a new sale. The government alleges that other remuneration, including tickets to sporting events and entertainment, was also provided to induce purchases and referrals."

Something Old, Something New (Hellacious Health Fraud (VI))

 

Here are a couple of recent cases that caught my eye. First, the old style of health care fraud:

• Evergreen Hospice, LLC (Evergreen), a hospice company located in Tulsa, Oklahoma, appears to be a Mom & Pop operation that advertises a Servant Attitude ("We are givers, not takers. We are listeners, not talkers. We are promoters of others and will perform our roles with humility and dignity") and touts their institutional commit to Ethics ("We will not participate in or tolerate dishonesty or unethical behavior"). On June 29 DOJ announced that Evergreen agreed to pay $48,830.70 to resolve allegations that it violated the False Claims Act by knowingly submitting false claims to Medicare for hospice care provided to beneficiaries who were not terminally ill. Medicare's hospice program requires a physician's certification that the patient/beneficiary is terminally ill, i.e., will probably die within 6 months. The settlement announcement included the usual boilerplate that liability was not established. The U.S. Attorney's announcement added: "'Unfortunately, some healthcare providers seek to defraud Medicare by billing unnecessary hospice services. Left unchecked, this misconduct would deplete funds available for terminally ill patients desperately in need of the relief that hospice care provides."

And something new(-ish):

• A key feature of 2010's Patient Protection and Affordable Care Act (PPACA, ACA, or Obamacare) offered state governments a deal. It was well known that many states had substantial populations of individuals who were not old enough to qualify for Medicare and had too much income to qualify for Medicaid. (States get to establish the eligibility criteria for Medicaid and some, like mine, disqualify individuals at a ridiculously low income level.) The federal government's offer: cap your eligibility at 133% of the federal poverty level (effectively 138% of FPL after accounting for the 5% income disregard feature of Medicaid) and we will pay 100% of the cost of expanded coverage for the first few years, 95% for the next few years, and 90% from then on. In return, states (including California) agreed that at least 85% of the services provided to the expanded population would be for "allowed medical expenses." Shortfalls would need to be returned to the state and ultimately to the U.S.

The four defendants in this case are [1] a county organized health system (COHS) that contracts to arrange for the provision of health care services under California’s Medicaid program (Medi-Cal) in Santa Barbara County and San Luis Obispo County, California; [2] a not-for-profit hospital network operating in Santa Barbara County; [3] a non-profit outpatient clinic operating in Santa Barbara County; and  [4] a non-profit community health center operating in Santa Barbara and San Luis Obispo Counties. The four allegedly violated the False Claims Acts (state and federal) by falsely certifying that they met the 85% minimum from 2014-16. The net result was that Medicaid expansion funds were used to subsidize non-Medicaid services. 

The four defendants settled the suit for $68 million, of which $12.58 million will go to the whistleblower, the former medical director of the COHC. 

More on Nonprofit Hospitals and Tax-Exempt Status

Just a quick followup on my previous posting on this topic (July 13). On July 15 the New England Journal of Medicine posted an on-line "Perspectives" piece (possibly free) that examines the question whether nonprofit hospitals deserve their tax-exempt status. The article covers much of the same ground as my post, but it adds some data to further the policy discussion, such as:

[I]n previous work we compared nonprofit and for-profit hospitals on measures of charity care and Medicaid shortfalls — the two largest components of community benefit by amount of spending. For-profit hospitals don’t receive tax exemptions and aren’t legally obligated to provide community benefit. In 2018, for every $100 of expenses incurred, nonprofit hospitals in aggregate spent $2.30 on charity care, as compared with $3.80 spent by for-profit hospitals. And in 2019, nonprofit and for-profit hospitals had similar Medicaid shortfalls as a share of total expenses. . . . These data suggest that many nonprofit hospitals don’t provide enough charity care or have a substantial enough Medicaid shortfall (relative to for-profit hospitals) to justify their favorable tax treatment. 

The article continues with additional policy-based concerns and ends with a valuable suggestion:

There are insufficient data to compare the amount of community benefit provided by individual nonprofit hospitals with the subsidies they receive. To close this information gap, the IRS could revise Schedule H of Form 990 to require nonprofit hospitals to report on forgone federal, state, and local taxes (broken out separately); savings associated with using tax-exempt bonds; gross profits from the 340B program, if applicable; and charitable contributions received by the hospital, with standardized reporting for each of these elements. . . .  Disclosure might not be sufficient to catalyze changes in hospital behavior, but we believe greater visibility is a prerequisite for policy action. 

 

Telemedicine Fraud

Here's an excellent review of a recent law review article on "Telemedicine Scams." The target article is by Katrice Bridges Copeland in 108 Iowa L. Rev. 69 (2022). The review is by Zack Buck in a recent Jotwell entry (July 7, 2023). His conclusion: 

Professor Copeland’s article—the first to address fraud in telemedicine—is a holistic and complete treatment of a pernicious problem in America’s health care system. . . . By adroitly focusing on the potential threats of a major new delivery mechanism such as telemedicine, she has made us aware of the next major frontier in health care fraud and abuse enforcement. In an area with such hope and promise in addressing America’s health care access challenges, and with the Public Health Emergency coming to an end, her warnings must be heeded to enable telemedicine to flourish while preventing the worst frauds from taking root.

The DOJ and HHS/OIG have brought numerous prosecutions for telemedicine fraud in recent years. The article by Prof. Copeland suggests we've only seen the beginning. 

Violent attacks on hospital staff: What's the solution?

The reports of violent attacks on doctors and nurses in hospitals, clinics, medical offices, and other health care settings keep coming in. From The Hospitalist (Mar. 1, 2023):

Even before the onset of the COVID-19 pandemic, health care workers suffered more workplace injuries as a result of violence than any other profession, with approximately 654,000 harmed annually, according to American Hospital Association studies. Since the pandemic began, violence against hospital employees alone has markedly increased. For example, 44% of nurses reported an increase in physical violence and 68% reported an increase in verbal abuse. (emphasis added)

The weapons tend to be knives and guns. Maybe it's a sign of the times, with random violence increasing all around us each year, there seems to be a steady stream of stories of violent attacks against health care personnel. (See, e.g., American Association of Critical-Care Nurses (blog)). I have further thoughts, but first, consider a recent example: "Man charged in fatal shooting of Tennessee surgeon" (Becker's Hospital Review, July 13). The shooter had reportedly been seen in this orthopedic surgery clinic earlier in the day, returned to the clinic, and shot the orthopedic surgeon.

It goes without saying that violence against doctors, nurses, and other health care workers simply shouldn't be a thing. We remember the political assassination of Dr. George Tiller 14 years ago while he was ushering in a worship service at his church in Wichita, Kansas. The killer was described as an "anti-abortion extremist." But much more violence and threats of violence occur every day in ordinary clinical settings. The work of clinical staff is performed with often emotionally fraught individuals (patients, family members), and then there are others with perceived grievances against the health care system or the world. The CDC has a useful list of risk factors:

The clinical setting is one of intensified emotions. Patients who are at risk of perpetrating violence include those who:

• are under the influence of drugs or alcohol
• are in pain
• have a history of violence
• have cognitive impairment
• are in the forensic (criminal justice) system
• are angry about clinical relationships, e.g., in response to perceived authoritarian attitude or excessive force used by the health provider
• have certain psychiatric diagnoses and/or medical diagnoses.

Clinics are designed to be open and welcoming, not armed fortresses. Doctors and nurses don't pack heat, and possession of a firearm on hospital property is universally prohibited (except in states where such prohibitions are themselves prohibited). They are vulnerable professionals -- first responders and health care workers -- who spend their careers comforting and healing. Violence is obscene and should be unthinkable in any workplace, including elementary schools, places of worship, and health care settings. 

There is no shortage of resources for dealing with violence in hospitals and clinics, including programs and best practices suggested or endorsed by the following:

• the American Hospital Association (Hospitals Against Violence; 2022 fact sheet)
• the federal Occupational Safety and Health Administration (OSHA) (report)
• the Centers for Medicare and Medicaid Services (CMS) (report)
• the Centers for Disease Prevention and Control (CDC) (course materials)

Health care settings are especially risky places to work, as many of the resources quoted and cited above establish. While we're at it, let's not forget the gun culture, the threat of which permeates every aspect of our lives. I wrote about this on Father's Day. The insanity has to stop.

Nonprofit hospitals: state and local tax authorities are again questioning tax-exemptions

Here's a great article from Kaiser Health News (July 11) on recent controversies over tax exemptions for hospitals. 

Tax-exempt status is not a "right"; it has to be earned. That means -- among other things -- that executive pay can't be excessive (or else the tax authorities will conclude the hospital is being run for private and not public benefit) and there has to be a convincing showing of tangible public benefit (uncompensated charity care, educational programs, research, etc.). 

The Kaiser piece starts with an example of the stakes involved in a typical case:

The public school system [in Pottstown, PA] had to scramble in 2018 when the local hospital, newly purchased, was converted to a tax-exempt nonprofit entity.

The takeover by Tower Health meant the 219-bed Pottstown Hospital no longer had to pay federal and state taxes. It also no longer had to pay local property taxes, taking away more than $900,000 a year from the already underfunded Pottstown School District, school officials said.

The district, about an hour’s drive from Philadelphia, had no choice but to trim expenses. It cut teacher aide positions and eliminated middle school foreign language classes.

“We have less curriculum, less [sic] coaches, less transportation,” said Superintendent Stephen Rodriguez. 

The school system appealed Pottstown Hospital’s new nonprofit status, and earlier this year a state court struck down the facility’s property tax break. It cited the “eye-popping” compensation for multiple Tower Health executives as contrary to how Pennsylvania law defines a charity.  

The court decision, which Tower Health is appealing, stunned the nonprofit hospital industry, which includes roughly 3,000 nongovernment tax-exempt hospitals nationwide.

The nonprofit hospital industry should not have been stunned. A wave of official scepticism over claims of tax-exempt status was ushered in at least 38 years ago with the case of Utah County v. Intermountain Healthcare, Inc., 709 P.2d 265 (Utah 1985). And jurisdiction after jurisdiction has viewed tax-exempt hospitals through a critical lens, often concluding that the hospitals in question were virtually indistinguishable from their for-profit competitors and that the public benefits from the nonprofits were too scant to justify the foregone tax receipts. 

This might be less of a problem if the IRS still required some level of charity care for a hospital to qualify for federal tax exemption, as it did from 1956 to 1969. (Compare Rev. Ruling 56-185 (exempt hospital must be operated "to the extent of its financial ability for those not able to pay for the services rendered") with Rev. Ruling 69-545 ("Revenue Ruling 56-185 is hereby modified to remove therefrom the requirements relating to caring for patients without charge or at rates below cost").) See GAO, Tax Administration: IRS Oversight of Hospitals' Tax-Exempt Status (April 26, 2023).

Obamacare added § 501(r) to the Internal Revenue Code to address certain aspects of the problem created by Rev. Rul 69-545, but it did not change the fundamental rule that a hospital may obtain tax-exempt status without offering a drop of unreimbursed charity care.

For its part, Texas (for once) far exceeds the federal standard by requiring minimum amounts of community benefit -- specifically including unreimbursed charity care and government-sponsored indigent health care -- in order for a hospital to qualify as a nonprofit entity under § 311.045 of the Health & Safety Code and for tax-exempt status as a charity under § 11.1801 of the Tax Code. 

COVID-19: GAO Recommendations Can Help Federal Agencies Better Prepare for Future Public Health Emergencies

There's a general consensus that COVID-19 exposed gaps in this country's state and federal public health infrastructure (in the broadest sense of that word). So when Congress passed the CARES Act, it included a provision for the Government Accountability Office (GAO) to report regularly on the public health and economic effects of the pandemic and the federal response. 

GAO's most recent report was issued yesterday (July 11; quick summary). This report includes the topics of (1) public health preparedness, (2) improper payments and fraud, (3) vulnerable populations, (4) distribution of federal COVID-19 funding, and (5) COVID-19 and the economy. It also includes updates for selected indicators related to public health, the economy, and federal COVID-19 funding and spending.

The report provides a wealth of information on how the federal government's $4.7 trillion pandemic-related expenditures have been spent. It also reviews the major areas in which our response was not up to the task. Finally, the report "includes several key data updates and five enclosures that summarize and highlight standalone reports issued from April 2022 (the date of our last comprehensive report) through April 2023 on the following topics: public health preparedness, improper payments and fraud, vulnerable populations, distribution of federal COVID-19 funding, and COVID-19 and the economy." 

New Advisory Opinion from HHS/OIG

It's OIG Advisory Opinion No. 23-04 (Favorable) (posted July 11), only the fourth AO issued this year, which makes it worth reading. It's long and the fact pattern is somewhat complicated, but the OIG's conclusion is favorable (another reason it's worth reading). On the other hand, as the lengthy recitation of facts suggests, the scope of the question (and the OIG's conclusions) are not likely to have broad applicability. Still, health lawyers everywhere should be up-to-speed on any and all Advisory Opinions, right?

The request was "for an advisory opinion regarding: (i) the use of Requestor’s online health care directory by Federal health care program beneficiaries to search for and book medical appointments with providers and the display of sponsored advertisements to Federal health care program beneficiaries on the directory and certain third-party websites (the “Existing Arrangement”); and (ii) certain proposed changes to the functionality of the directory (the “Proposed Changes,” and together with the Existing Arrangement, the “Arrangement”).

The AO recites the usual boilerplate about the payments being illegal remuneration under the Anti-Kickback Statute, and the concludes that it will exercise its discretion and not seek Civil Monetary Penalties or program exclusions. All's well that ends well.

Cyber attacks against hospitals increase over 2022

Hospital giant HCA announced this morning that data on 11 million patients -- patient names, phone numbers, dates of birth, appointment dates and other personal details -- had been stolen from its system and posted on-line. This comes on the heels of this morning's report in Chief Healthcare Executive that cyber breaches against hospitals in the first half of 2023 approached the number of hospital breaches for all of 2022.

All the more reason for SMU law students to sign up for our one-week August course on cyber breaches!

Surprise medical bills, 'junk' insurance - new proposals from Biden administration

We've been hearing about "surprise medical bills" for years. A colleague of mine had surgery over a decade ago and did everything humanly possible to avoid an unpleasant surprise, including checking with the anesthesiology group to make sure the assigned anesthesiologist would be an "in network" physician -- that is, would be covered by our insurance plan. "No problem," said the group's manager. Come the day of the surgery and a last-minute schedule change for the assigned anesthesiologist led to a substitution in the OR and guess what? The substitute anesthesiologist, despite being under contract with the group, was "out of network." As a result, instead of a bill for anesthesia services in the hundreds of dollars, the actual charge -- 100% of which was my colleague's responsibility -- was in the thousands. Surprise!

NPR and Kaiser Health News produce a monthly feature entitled "Bill of the Month." The stories would be comical if they weren't soul-crushing. 

The stories persist, though, even after January 1, 2022, the effective date of the federal No Surprises Act (part of the previous year's omnibus appropriations bill). And even after reams of analysis and guidance from HHS/CMS, Brookings, the Commonwealth Fund, the Consumer Financial Protection Board, the Department of Labor, the Federal Trade Commission, and of course Kaiser Health News.

So, as reported by Becker's Payer Issues, "the Biden administration is issuing guidance to end the abuse of 'in-network' designation, according to a July 7 White House news release." [President's remarks; fact sheet] 

The White House fact sheet provides impressive detail that describes steps to address the following problem areas:

• "New proposed rules would close loopholes that the previous administration took advantage of that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most."
• "New guidance will help stop providers from gaming the system by evading the surprise billing rules with creative contractual loopholes that still leave consumers with unexpected costs."
• "For the first time in history, the Consumer Financial Protection Bureau, HHS, and Treasury are collaborating to explore whether health care provider and third-party efforts to encourage consumers to sign up for medical credit cards and loans are operating outside of existing consumer protections and breaking the law."

"Futility" Policy at Mass General Hospital

Thad Pope has alerted us to the publication of a report from within Massachusetts General Hospital, "Declining to Provide or Continue Requested Life-Sustaining Treatment: Experience With a Hospital Resolving Conflict Policy." It's apparently "open access" and is available in HTML as PDF. The report is well worth reading, for a number of reasons:

• Texas has had a statutory policy for 23 years. It is, like the MGH policy, an example of a "due process" approach to resolving disputes over life-sustaining treatment (LST). A hospital policy without statutory protections for participants in the process leaves the hospital legally exposed, which is bound to have an effect on how the process plays out in real time, but it is still possible to learn some valuable lessons from a stand-alone hospital's experience.
• The report covers 20 years' worth of cases that were handled under the MGH policy.
• It demonstrates a pattern that I have experienced in Texas hospitals: The futility policy gets invoked in an almost vanishingly small percentage of cases in which it could be useful.

There are many aspects to futility disputes that are outcome-determinative in terms of the utility of invoking the policy. In other words, details concerning the family dynamics, patient characteristics, and the treatment team's history with patients and surrogates (or lack thereof) may be more important to achieving a satisfactory than the policy itself. The policy, however, does provide some degree of rigor and consistency from patient to patient. Whether the results justify the existence of a policy is very much in the eye of the beholder. The MGH report is a good place to start.

False Claims Act and Circuit Splits

Who doesn't love a good circuit split? It's the stuff dreams are made of. Well, if not dreams, at least law review comments, cert. petitions, amicus briefs, and the occasional grant (or denial) of certiorari.

My friend Rachel Rose is giving a lecture for the Federal Bar Association on July 12 in which she will discuss the False Claims Act in the context of Fed. R. Civ. P. 9(b)'s requirement that fraud be pleaded with particularity. Rachel's starting point is the Supreme Court's denial of certiorari in United States ex rel. Owsley v. Fazzi Associates, Inc. on Oct. 17, 2022. In Owsley the qui tam relator posed this issue for the Court: "Whether Federal Rule of Civil Procedure 9(b) requires plaintiffs in False Claims Act cases who plead a fraudulent scheme with particularity to also plead specific details of false claims." [emphasis added] The district court dismissed the complaint and the Sixth Circuit affirmed, stating: "Owsley's complaint provided few details that would allow the defendants to identify any specific claims—of the hundreds or likely thousands they presumably submitted—that she thinks were fraudulent. For that reason alone her complaint fell short of the requirements of Civil Rule 9(b)."

The cert. petition identified "a longstanding circuit split about how Rule 9(b) works in FCA cases":

The Sixth Circuit is one of five that adopt a more rigid approach to Rule 9(b), requiring relators to plead details of false claims in addition to details of fraudulent schemes. Seven circuits adopt a more flexible approach that allows the presentment of claims to be inferred from circumstances (including from a fraudulent scheme), and does not require details of claims.  [Pet. at 10]

Of course, the Court doesn't give reasons when it denies review. That's what it means to have discretion to control this part of the Court's docket. So we don't know why the Court decided, as it has repeatedly in the past, to punt. 

The issue in Owsley is pretty darned fundamental to all False Claims Act litigation, including those involving health care providers (which appears to be a very large percentage of all False Claims Act litigation). It may be impossible for some (many?) relators to plead the details required to identify specific false claims without discovery, and a strict application of the particularity requirement will result in a dismissal before discovery can begin. 

Hellacious (and Audacious) Health Care Fraud of the Week (V)

Another fine example of the alleged Willie Sutton explanation for robbing banks  except now the miscreants barely need to leave home to get to where the money is. Tapping into the vast funds swishing around the health care system is so easy, who needs to rob banks? By the way, earlier this year I cast doubt on the effectiveness of criminal law as a deterrent to crime. There is a nice essay that just went on-line today that develops that thought with more finesse and insight. Take a look at Christopher Slobogin, "The Rationality of Criminality," JOTWELL (July 3, 2023) (reviewing Harold Winter, The Economics of Crime: An Introduction to Rational Crime Analysis (2020)), https://crim.jotwell.com/the-rationality-of-criminality/.

Ocean County Man Admits $21.7 Million Health Care Fraud Scheme And COVID-19 Wire Fraud Scheme (June 30, 2023; U.S. Attorney's Office, District of New Jersey). From DOJ's announcement:

Alexander Schleider, 57, of Lakewood, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit health care fraud and one count of wire fraud. According to documents filed in the case and statements made in court:

• Schleider owned and operated durable medical equipment (DME) companies in New Jersey that provided orthotic braces to beneficiaries of Medicare and other federal and private health care benefit programs without regard to medical necessity. Schleider and his conspirators obtained prescriptions for the DME braces through the payment of kickbacks and bribes to individuals operating marketing call centers, who in turn utilized the service of telemedicine companies to obtain prescriptions for the DME. Schleider caused losses to Medicare and other health care benefit programs of $21.7 million.
  
  
• Schleider also committed wire fraud in connection with funds made available in response to the COVID-19 pandemic. After one of his DME companies received $322,237 from the Department of Health and Human Services’ Health Resources and Services Administration Provider Relief Fund, Schleider submitted a fraudulent attestation to HRSA in which he claimed that the DME company provided diagnoses, testing, and care for individuals with possible or actual cases of COVID-19 after Jan. 31, 2020. In reality, the DME company had ceased billing for any services in April 2019. The attestation also falsely claimed that the payment would only be used to prevent, prepare for, and respond to coronavirus, and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Schleider did not use the funds for those purposes, but transferred them into other accounts and subsequently used them to purchase real estate and vehicles, among other things.

The maximum penalties are pretty stiff:

The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. 

And yet . . . hope springs eternal in the hearts of health care fraudsters! 

UNOS's Dispute with Contractor Threatens Supply of Organs to 63 Transplant Centers

 You read that right. And the disruption could have happened as soon as today,  according to an article in the Washington Post (7/3; if you can't get past the paywall, try Newsmax). In a late-breaking development on the 4th, the corporation that runs the nationwide transplantation system extended the deadline for an agreement to end its dispute with a major player for two weeks, to July 19. Just to cut to the chase: The national organ transplantation system is too important for a couple of key players to be playing chicken.

UNOS is the United Network for Organ Sharing. It's a Virginia nonprofit corporation that runs the national organ transplantation system under an exclusive contract with the federal Health Resources and Services Administration (HRSA), an agency under the umbrella of HHS. 

It's a tough gig. Managing the supply of transplantable organs is a life-or-death proposition for the more than 104,000 people on wait lists, 19-22 of whom die each day without a match. And transplantation is big business for the hospitals that run transplant centers and obviously an important source of income for the health care professionals who provides the services. Keeping the system running smoothly is a high-stakes undertaking with lots of stakeholders.

Speaking of services, the day-to-day on-the-ground business of identifying donors, evaluating the suitability of potential donor organs, and transporting organs to waiting recipients is mostly managed by 56 Organ Procurement Organizations (OPOs), local or regional nonprofits that keep the supply chain moving. Buckeye Transplant Services competes with OPOs for basically the same set of services, which they provide to transplant centers all over the country.

In order for Buckeye to do all this, it needs access to UNOS's data. To that end, it has apparently developed a bot of some kind that scrapes UNOS's database, picking up -- according to UNOS -- data that Buckeye doesn't need to carry out its contractual duties for UNOS. UNOS is not happy and wants Buckeye to start playing by its rules. Buckeye is not happy and sued UNOS on July 3 in federal court in Richmond, home based for UNOS. 

If Buckeye loses access to the data maintained by UNOS, it's out of business until access is restored. Much if not all of the burden of screening and evaluating donations will fall to transplant centers themselves, and they are pretty busy trying to keep patients (donors, recipients) alive. It's a mess.

On March 22, HRSA announced a modernization initiative. According the WaPo article above, Congressional Republicans and Democrats seem supportive of reforms. Sen. Grassley (R-Iowa) was pretty emphatic about the need for change: "Thousands of patients are dying every year and billions of taxpayer dollars are wasted because of gross mismanagement. The system is rife with fraud, waste and abuse, corruption, even criminality.”

FDR's Four Freedoms on the 4th of July 2023

In his State of the Union speech on Jan. 6, 1941, FDR famously offered up "the Four Freedoms" to explain why the United States was at war abroad and on a war footing at home. He introduced the Four Freedoms with this eerily familiar list of goals for the country: 

[T]here is nothing mysterious about the foundations of a healthy and strong democracy. The basic things expected by our people of their political and economic systems are simple. They are:

Equality of opportunity for youth and for others.

Jobs for those who can work.

Security for those who need it.

The ending of special privilege for the few.

The preservation of civil liberties for all.

The enjoyment of the fruits of scientific progress in a wider and constantly rising standard of living.

These are the simple, basic things that must never be lost sight of in the turmoil and unbelievable complexity of our modern world. The inner and abiding strength of our economic and political systems is dependent upon the degree to which they fulfill these expectations.

Many subjects connected with our social economy call for immediate improvement.

As examples:

We should bring more citizens under the coverage of old-age pensions and unemployment insurance.

We should widen the opportunities for adequate medical care. [emphasis added -- this is a HealthLawBlog, after all]

We should plan a better system by which persons deserving or needing gainful employment may obtain it.

Then FDR got to the part of his speech that made it so enduring:

In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms.

The first is freedom of speech and expression--everywhere in the world.

The second is freedom of every person to worship God in his own way--everywhere in the world.

The third is freedom from want--which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants-everywhere in the world.

The fourth is freedom from fear--which, translated into world terms, means a world-wide reduction of armaments to such a point and in such a thorough fashion that no nation will be in a position to commit an act of physical aggression against any neighbor--anywhere in the world. 

As the Smithsonian has noted:

The public response? Crickets. Congress barely applauded. The next day most newspapers didn't even mention the “Four Freedoms.” Those who were still talking about the phrase in the weeks and months that followed did so to lambaste its “hollow, empty sound.” The government hired [E.B.] White and other A-list scribes to drum up some buzz, but White’s boss called his pamphlet “dull.” The “Four Freedoms,” in the words of one federal administrator, were a “flop.”

Ever the optimist, FDR concluded the list with this: "That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our own time and generation." Eighty-two years later the Four Freedoms are still aspirational, not real, for much of the world and for many of our fellow citizens. 

Teva & Gilead Prevail in $3.6 Billion "Pay for Delay" Suit

I haven't seen much discussion of this verdict handed down by a federal jury on Friday out in California that cleared the two pharmaceutical companies of antitrust liability. As reported by thepharmaletter's "Brief," consumers and other direct purchasers, including the Blue Cross and Blue Shield Association, filed the antitrust lawsuit in 2019 in which they alleged Gilead Sciences and Teva Pharmaceutical Industries entered into an illegal "pay for delay" patent deal that inflated prices for two HIV medications. The jury found that plaintiffs had not shown Gilead had market power or that it paid Teva to delay its generics, IP Law 360 reported.

The FTC has a good website on "Pay for Delay: When Drug Companies Agree Not to Compete." The policy against "pay to delay" seems sound. Usually to settle a private patent infringement suit between two drug manufacturers (which itself may or may not be hatched for this sole purpose), the practice amounts to extended patent protection for the original drug beyond what is contemplated by the Hatch-Waxman Act. That protection keeps a lower-cost generic off the market and allows the original patentee to reap what amounts to monopoly profits.

Good policy, but if the facts aren't there, the case will fail. It will be interesting to read the details surrounding this verdict in the days and weeks ahead.

Private Equity, Consolidation, and Prices of HC Goods and Services

Good article in the Washington Post on June 29. The case study concerns U.S. Anesthesia Partners, which has been on a buying spree. The business model is basic: Go into a market, purchase private anesthesia practices, and once they are under one roof, raise the prices these groups charge hospitals and surgery centers. One study, "based on six years of data, for example, found that when anesthesia companies backed by private-equity investors took over at a hospital outpatient or surgery center, they raised prices by an average of 26 percent more than facilities served by independent anesthesia practices."

The Federal Trade Commission is supposed to be watching out for mergers and acquisitions that produce enough market power to give the resulting entity the power to raise prices, According to the article, the FTC has given these consolidations of market share the equivalent of a raised eyebrow and nothing more. The Kaiser Family Foundation has published on this topic. Is anyone in government paying attention?

Health Affairs: Forefront articles from June

If I have any recommendations for "must-read" sources of insight into the world of health care policy and law they would be the Kaiser Family Foundation (KFF) Health News website/homepage and the policy journal Health Affairs. Today KFF recapped its most popular Forefront articles (June 2023). Here's a summary:

• Sara Rosenbaum, Tim Jost, and coauthors broke down the Supreme Court’s Talevski decision regarding Medicaid beneficiaries.
• Sean Tunis and Peter Neumann wrote about Medicare and Alzheimer’s drug coverage.
• Aletha Maybank and coauthors embrace creative tensions to advance health equity.
• Denver Health shares their experience with inclusive race and ethnicity data collection.
• Corwin Rhyan and George Miller share an early look at what drove 2022’s health care spending slowdown.

Also, we had many articles in our major Forefront series:

• In the Accountable Care for Population Health series, Gabriel Drapos and Michael Kopko argue that valued-based care fuels innovation, not consolidation.
• In our Medicare and Medicaid Integration series, Allison Rizer and Henry Claypool wrote two articles on the proposed Medicaid managed care rules. Here’s the first article.
• In our Provider Prices in the Commercial Sector series, Ann Kempski and Ge Bai write that the North Carolina Medicaid expansion puts employers and workers at risk for higher hospital prices.

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