"Automatic Enrollment in Health Insurance" (Commonwealth Fund Report)

The Commonwealth Fund just published "Automatic Enrollment in Health Insurance: A Pathway to Increased Coverage for People with Low Income" (March 11, 2023) by John Holahan, Michael Simpson, and Jason Levitis. By way of introduction, the Commonwealth Fund writes: "The number of uninsured Americans — more than 26 million — remains stubbornly high, despite the availability of free or low-cost health coverage to those with low incomes. But there is a pathway to coverage that could have a substantial impact on the uninsured rate: automatically enrolling people who qualify for no-cost coverage in either Medicaid or marketplace plans." 

The basic model would expand upon existing law in a bold way:

The Inflation Reduction Act of 2022 eliminated marketplace premiums for eligible people with incomes below 150 percent of FPL. As a result, all individuals at that income level who live in states that have expanded Medicaid can now receive zero-premium coverage, unless they have an “affordable” offer from an employer or are excluded because of immigration status. If the remaining 10 states expanded Medicaid, or if eligible people with incomes below 100 percent of FPL in nonexpansion states were permitted to have subsidized coverage in the marketplace, then most legal residents with incomes below 150 percent of FPL could be covered with no premiums. Zero-premium coverage could also be extended to higher incomes, either through further enhancement of federal premium tax credits or by states adopting a Basic Health Program or adding state premium subsidies. [footnotes omitted]

Here's the Abstract:

Issue: The number of uninsured Americans remains stubbornly high, and many Americans do not obtain the coverage for which they are eligible — even when insurance is free.

Goal: To outline a system for automatically enrolling people with low incomes in health coverage and then model the impact on coverage and spending at the federal and state levels.

Methods: The Urban Institute’s Health Insurance Policy Simulation Model was used to analyze alternative auto-enrollment approaches. These include identifying uninsured individuals who are tax filers or recipients of the Supplemental Nutrition Assistance Program (SNAP), unemployment insurance, or Social Security and enrolling people who are eligible for free coverage.

Key Findings and Conclusions: We show results for the nation and for three states (California, Georgia, and Michigan). If all states adopted an auto-enrollment policy for those with incomes at or below 150 percent of the federal poverty level, 4.3 million uninsured people would be identified and enrolled. An additional 1.8 million would be “deemed” covered, either auto-enrolled through provider contact or contingently covered and thus protected from huge medical bills. Provider spending on uncompensated care would fall 32 percent, while federal spending would increase by $30.3 billion and state spending would increase by $7.7 billion per year.

The report discusses two implementation models: nationwide enrollment pursuant to federal legislation or, absent that, state-by-state legislative implementation. 

It's hard to imagine either model would escape contentious litigation lasting years. Recall Chief Justice Roberts's opinion in the 2012 case of Sebelius v. NFIB, in which the individual mandate was deemed to exceed Congress's powers under the Commerce Clause: 

The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast do-main to congressional authority.

Make a change to these sentences and you have the essence of the brief we can expect from opponents of automatic enrollment:

The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by enrolling them in a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast do-main to congressional authority. 

In Sebelius Roberts saved the individual mandate by characterizing the penalty for not purchasing health care coverage as a tax. It would be a real stretch to characterize a free insurance policy as an exercise of the Taxing Clause. Would it fly under the Spending Clause? 

By way of counter-argument, don't we already have a nationwide automatic-enrollment scheme for Medicare Part A? Would a broader scheme be any different?

Criminal Liability of Health Care Providers

Some types of criminal prosecutions of health care providers are rare, while others are not.

1. Not-so-rare. This category includes fraud (against private insurers and public health programs like Medicare, Medicare, and Tricare); criminal prosecutions involving violations of the Anti-Kickback Law are announced by DOJ and state AGs every week (if not every day). Last Friday, for example, the Massachusetts Attorney General announced indictments against a dentist and his dental practice for billing the Medicaid program for services that were never rendered or were not rendered by the dentist. The charges included multiple counts of Medicaid False Claims and Larceny Over $1,200. 

Violations of state and federal Controlled Substances Acts often have a provider -- a physician, nurse, or pharmacy worker -- with access to drugs in the middle of the scheme. A recent example comes from the U.S. Attorney for the Northern District of New York. whose office announced on March 1 that a nurse practitioner received a 70-month sentence "for distributing controlled substances outside the course of professional practice and for no legitimate medical purpose." In her plea agreement, the defendant admitted that she 

unlawfully prescribed controlled substances to a total of 54 patients.  Simonson issued hundreds of unlawful prescriptions, including for the opioids hydrocodone and oxycodone, benzodiazepines (clonazepam, diazepam, and lorazepam), and the stimulants amphetamine (e.g. Adderall) and methylphenidate.  For instance, Simonson admitted that she issued a total of 63 oxycodone prescriptions to two residents of Suffolk County, New York, without treating either of them for a medical condition. The Suffolk County residents usually paid Simonson by mailing her packages of cash concealed within DVD cases.

To settle the government's civil case against her, the defendant "admitted that she improperly prescribed controlled substances to 105 patients (including the 54 listed in her criminal plea agreement), often without ever examining patients and maintaining medical records justifying her decision to prescribe controlled substances."

2. Very rare. This category involves provider errors that result in iatrogenic injury. Most such cases, of course, are handled on the civil side by medical-malpractice and medical-negligence claims. In a small percentage of cases, though, a provider will be indicted. Most such cases involve extreme departures from the standard of care resulting in a patient's death. An example was reported by the NY Times earlier this month:

A Colorado paramedic convicted in the 2019 death of Elijah McClain, a young Black man whose case helped drive the national police reform movement, was sentenced on Friday to five years in prison.

The case was a rare criminal prosecution of emergency medical personnel, and stirred outrage among paramedics and firefighters across the nation who worry that urgent decisions made as part of their jobs can be criminalized.

The paramedic, Peter Cichuniec, 51, a former lieutenant with Aurora Fire Rescue, was convicted in December of criminally negligent homicide and second-degree assault for the unlawful administration of drugs. He was one of five police officers and paramedics prosecuted in state district court over three consecutive trials. . . .

In August 2019, Mr. McClain, a 23-year-old massage therapist, was returning home from a store when he was confronted by police who were responding to a 911 call about a suspicious person. During a quickly escalating encounter, Mr. McClain was forcefully restrained by police and placed in a carotid chokehold, a neck restraint that has since been banned in Aurora and other police departments. Paramedics then injected him with an overdose of the powerful sedative ketamine. He died in a hospital several days later.

Cyber Attack on United Healthcare Division Was Unprecedented in Scope

If you've tried to fill a prescription or get preauthorization for a drug or procedure or -- if you're a health care provider -- tried to submit a bill electronically, you have experienced the widespread crippling of our healthcare infrastructure that resulted from an unprecedented cyberhack. 

As reported by KFF Health News (March 8), 

The American Hospital Association calls the suspected ransomware attack on Change Healthcare, a unit of insurance giant UnitedHealth Group’s Optum division, “the most significant and consequential incident of its kind against the U.S. health care system in history.” While doctors’ practices, hospital systems, and pharmacies struggle to find workarounds, the attack is exposing the health system’s broad vulnerability to hackers, as well as shortcomings in the Biden administration’s response.

Despite the centrality of digital record-keeping, billing, and payment systems, there turns out to be no meaningful governmental involvement in this arena.

To date, government has relied on more voluntary standards to protect the health care system’s networks, Beau Woods, a co-founder of the cyber advocacy group I Am The Cavalry, said. But “the purely optional, do-this-out-of-the-goodness-of-your-heart model clearly is not working,” he said. The federal government needs to devote greater funding, and more focus, to the problem, he said. [emphasis added]

Restoration of full operability after a cyber attack typically takes 30 days, according to Mr. Woods, which means we can all expect slower response times to virtually all requests for health-related services at least through March and probably into April. Meaningful federal action will take much, much longer.

 

CDC Updates Guidance on COVID+ Infections

I noted in an earlier post that the Center for Disease Control & Prevention (CDC) was considering a significant change to their recommendations for patients who test positive for Covid-19 ("Chicken Soup for COVID?", 2/18/24). Things got busy at work, and I neglected to post a link to the final version of the recommendations, which CDC pushed out on March 1. You can find the press release here and the text of the recommendations here.

The new guidelines fairly drastically reduce the agency's previous quarantine recommendation:

When people get sick with a respiratory virus, the updated guidance recommends that they stay home and away from others. For people with COVID-19 and influenza, treatment is available and can lessen symptoms and lower the risk of severe illness. The recommendations suggest returning to normal activities when, for at least 24 hours, symptoms are improving overall, and if a fever was present, it has been gone without use of a fever-reducing medication.

Once people resume normal activities, they are encouraged to take additional prevention strategies for the next 5 days to curb disease spread, such as taking more steps for cleaner air, enhancing hygiene practices, wearing a well-fitting mask, keeping a distance from others, and/or getting tested for respiratory viruses. . . .

For all intents and purposes, the CDC recommends the same steps for dealing with COVID as for influenza. The absence of fever for 24 hours, not a negative COVID test, is the key to ending quarantine and returning to a mostly normal life. "Normal" in this case includes limiting close contact with others, wearing well-fitted masks, improving indoor air quality, and practicing good hygiene.

Revised Merger Guidelines from DOJ & FTC: What Effect on Hospital Acquisitions of Physician Practices?

 

On Dec. 18, 2023, the U.S. Department of Justice and the Federal Trade Commission issued their updated Merger Guidelines, hitting the "Refresh" button for the first time since the publication of their 2010 Horizontal Guidelines and 2020 Vertical Guidelines. [See Wilmer Hale newsletter, 12/22/23; see also Crowell & Moring newsletter, 12/19/23 (5 key takeaways); Gibson Dunn newsletter, 12/22/23 (3 key takeaways)]

The Merger Guidelines apply equally to acquisitions, so it is natural to ask about the potential impact of the revised Merger Guidelines on the growing trend of hospital acquisitions of physician practices. That question is asked and expanded, if not quite answered, in the March 9 issue of the New England Journal of Medicine in a piece by Dhruv Khullar, M.D., M.P.P., Lawrence P. Casalino, M.D., Ph.D., and Amelia M. Bond, Ph.D.: "Vertical Integration and the Transformation  of American Medicine," available for free here (HTML) and here (PDF).

The article identifies three broad areas of concern that will require a more nuanced approach fueled by a close factual inquiry in each case under review:

First, are the effects of vertical integration influenced by the form that the resulting health system takes? The Agency for Healthcare Research and Quality has defined a health system as an organization that has at least one hospital and at least one physician practice that provides comprehensive care, with the entities operating under common ownership or management. This broad definition is useful for systematically tracking growth in the number of health systems, but it masks tremendous heterogeneity in size, geography, not-for-profit versus for-profit status, provider specialties, and leadership structure. . . .

Second, how do practice acquisitions affect clinicians? Traditionally, antitrust agencies judging whether to challenge a proposed merger or acquisition have focused on prices paid by consumers. In recent years, however, they have started to take a more expansive view of potential benefits and harms. The new guidelines address the extent to which a merger lessens competition for workers and could result in lower wages, worse benefits, or poorer workplace conditions. Research on vertical integration in health care could examine its consequences for clinicians. Many clinicians may be satisfied after their practice is acquired; they may, for example, have an improved work–life balance, receive greater administrative support, and be relieved of managing the business-related aspects of medicine. Alternatively, they may work longer hours, have less autonomy and constrained job mobility, and experience more burnout or moral injury.

Third, and most important, when hospitals acquire practices, which patients benefit, and which are harmed? The effects of vertical integration are likely to vary depending on the medical and social needs of a health system’s patients. Patients who have multiple coexisting conditions and require frequent interactions with the health care system may be especially affected by changes in care protocols and referral networks after practice acquisitions. The types of practices that hospitals target also matters. The guidelines call attention to the potential for merged entities to limit access to products or services that rivals need to compete. It’s possible that in preferentially acquiring profitable practices, hospitals leave patients in poorly resourced practices worse off by weakening those practices’ leverage in negotiations with insurers, deprioritizing referrals for their patients, or hiring away their clinicians and staff. Future research could examine the effects of acquisitions not only on patients at practices that are acquired by hospitals, but also on patients at practices that, for whatever reason, are not.

The concluding paragraph summarizes the authors' concerns:

The rapid acquisition of physician practices by hospitals highlights an important tension in health care — between the possibility that integration can promote efficiency and improved quality and the concern that it distorts markets and can worsen health and financial outcomes. This tension reflects the conflicting values of coordination and competition. Resolving it — determining whether, how, and when regulators should act — will require a more nuanced understanding of the consequences of these acquisitions for patients, families, and clinicians. 

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 ) 

Top Four Kick-the-Can Issues in Health Care

Becker's is an incredible daily resource through various newsletters aimed at hospital management, CFO's, and policy makers. From their vantage, they have a good feel for the recurring issues that government ignores and that might yield at least somewhat to public-private partnerships. Here are their top four:

1. Hospital closures. It seems lawmakers only start to take notice of hospital financial solvency when closure announcements are made. Lost in this 11th-hour dynamic is concern for patient safety and care quality. The closure of a hospital is one thing. But just as important — and often neglected — is scrutiny of the quality of care patients receive in the period leading up to the announcement of closure. 

2. Hospital staff safety. The Safety from Violence for Healthcare Employees Act was introduced in the House last April and in the Senate last September. The bipartisan legislation would make it a federal crime to knowingly assault hospital workers and enact federal protections for healthcare workers like those in effect for aircraft and airport workers. 

Since the legislation's introduction, individual acts of violence in hospitals continue to unfold and make headlines as more longitudinal data is released showing just how much more hostile healthcare settings have become. More than double the number of health workers reported harassment at work in 2022 than in 2018, including threats, bullying, verbal abuse, or other actions from patients and co-workers that create a hostile work environment, according to CDC data. More than 5,200 nursing personnel were assaulted in the second quarter of 2022, according to data from Press Ganey, amounting to about 57 assaults per day. 

3. Healthcare workforce shortages. Much attention is paid to technology solutions and AI support systems to augment the healthcare staff and workers who are in short supply. But look more closely, and the foundation of data about the U.S. workforce looks like Swiss cheese. 

There are more than 8,300 designated primary care shortage areas in the U.S., and nearly 200 of them have been federally designated as such for at least 40 years. This finding stems from an analysis that KFF Health News published last month. One area on the far south side of Chicago has been designated as a shortage area since 1978. Another area in the Baton Rouge metro area in Louisiana, has been named a shortage area since 1979, most recently with 22 full-time primary care physicians for nearly 140,000 people. 

4. Hospital cybersecurity. Becker's covered one of the earliest hospital ransomware attacks on a small hospital in Kentucky in 2016. Methodist Hospital in Henderson, Ky., operated in an internal state of emergency for five days and did not pay the ransom. Since, we've seen cybergangs and criminals grow more savvy, emboldened and nefarious in their targeting of hospitals. Health system ransomware attacks nearly doubled in 2023, with 141 U.S. hospitals affected last year and data stolen in 32 of 46 of the events. 

These attacks can wreak havoc and cause harm to entire healthcare infrastructures across state lines. Last November, the hack of 30-hospital Ardent Health Services, based in Nashville, Tenn., caused ambulances to be diverted across six states. The actors behind these attacks have also grown more cruel, hitting children's hospitals (most recently Lurie Children's, a level 1 pediatric trauma center in Chicago), demanding $900,000 from a safety-net hospital in 48 hours, publishing data about hospital staff, or activating other hospital equipment mid-attack.

Out-of-Pocket Costs Are Top of the List of Voters' Concerns

Money's tight. Inflation seems to be stuck at a level that bothers voters -- R, D, and Ind alike. Worries that the Fed may back off a notch or two in its current rate-reduction program seems to have spooked the equities markets, and that's an unsettling development to tens of millions of workers and retirees whose retirement plans are in managed stock portfolios. 

Add to all this a broadly shared view that out-of-pocket expenditures for health care are too high, according to polling done by the nonpartisan Kaiser Family Foundation. When registered voters were asked about their health-care concerns, these payments -- copays, coinsurance, deductibles -- were #1 by a lot:

This concern was shared across the political spectrum. As the KFF folks put it: 

What this means is that affordability is now the theme that will resonate most with voters, whether candidates are talking about health on the campaign trail, or policymakers are advancing policy proposals. That doesn’t mean that other themes like “universal coverage” or health care as a “right” (if you lean liberal), or “choice” or “competition” (if you lean more conservative), don’t work with large segments of the population. But with 92% of the population now covered and so many people struggling with medical bills and medical debt, affordability is the big tent theme that will connect with the most Americans.  

Reproductive rights will motivate large groups of voters to go to the poll. The issue polls well with Democrats, independents, and college-educated women, among others. It appeared to have an effect in 2023 elections, but its impact on 2024 remains to be seen. 

To be clear, affordability of health care isn't simply a political issue. It has huge implications for access to health care, even among the 92% of Americans who have health insurance coverage, at least to the extent health care is postponed or not sought at all because of high cost-sharing obligations. Also, when care is postponed or passed up, that has an impact on quality of care, and reduced access and quality affect societal concerns with the justice and fairness of the health care delivery system that continues to price millions of covered individuals out of the market. 

Chicken Soup for COVID-19?

Earlier this week, NBC reported that the CDC is considering a substantial change to its isolation guidelines for individuals who are COVID+. Under the proposal, individuals with COVID would be allowed to re-enter society 24 hours after they are fever-free without medications. In essence, according to the report, CDC's recommendation would be to treat COVID like the flu.

Soon after the NBC story broke, an anonymous official at DHHS emphasized there is no change yet, meaning their 5-day isolation/10-day masking guideline is still in effect, at least until it isn't, pointing out that "discussions are at an early stage and no definitive decisions have been made."

Outside the Washington Beltway, support for the change seems to be building:

Dr. William Schaffner, an infectious diseases expert at Vanderbilt University Medical Center in Nashville, Tennessee, said he and his colleagues have privately encouraged the CDC to drop the five-day isolation period, in part because there’s little evidence it’s stopping the spread of Covid. 

The “rigorous recommendations that are currently in place do not reflect common practice,” Schaffner said. “It’s difficult to demonstrate that strict isolation has had a notable impact on transmission.” 

California and Oregon have already broken with the CDC, suggesting that people don't need to stay home if they've been fever-free for 24 hours without medication.

“With each day, the risk of communicability diminishes,” Schaffner said. “Public health recommendations have to be practical.” That is, people may stay home for a few days if they have a fever and feel achy and fatigued. After that, it’s back to business as usual.

Dr. David Margolius, the public health director for the city of Cleveland, said he was also in favor of easing isolation restrictions.

“For a couple years, people really associated public health with the elimination of Covid,” Margolius said. But “public health is about increasing life expectancy for our residents. It’s about improving quality of life. And that is more than just controlling one virus.”

Covid is still contagious, said Dr. Abraar Karan, an infectious disease physician at Stanford Medicine. “What the CDC and health departments are trying to say is that we need to have policies that people are going to actually follow,” Karan said.

As of this month, emergency room visits, hospitalizations and deaths from Covid are down, according to the latest CDC data.

$2 Billion (with a "B") Healthcare Fraud Scheme Alleged by CMS & FBI

From Becker's Hospital Review (Feb. 13, 2024): The FBI and CMS are investigating an alleged fraud scheme. The scheme ran for two years and involves 406,000 patients and seven firms in Connecticut, Florida, Kentucky, New York and Texas. The government is looking into the possibility that the scheme cost the Medicare program $2 billion. 

The scheme is described in a report by the National Association of ACOs (NAACOS), whose president, Clif Gaus, is quoted in the report. More from Becker's:

In all cases, the companies were sold to new owners before the steep increase in catheter purchases. Some of the companies obtained Medicare accreditation under the name of a person who said they no longer worked there, the report said. 

None of the companies have been major players in the intermittent urinary catheter field, but collectively they are responsible for a national spike in urinary catheter claims, the report said. The NAACOS did not find any evidence that the patients wanted or received catheters. 

Mr. Gaus said he was concerned the companies behind the alleged fraud were using real patients' data to order medical products, suggesting several possible sources, including healthcare records and consumer data.

"Where do you get half a million [Medicare] beneficiary names and ID numbers?" Mr. Gaus said in the report. "There has to be a breach somewhere in the healthcare system."

Urinary catheters are an appealing target for scammers; they are low-cost products with high Medicare payout margins. The orders can escape scrutiny when they accompany billing for more expensive equipment or procedures.  

 

False Claims Act: Causation Standard Up for Grabs

On February 13 AHLA posted a nice, lengthy analysis of the circuit split over the appropriate standard for proving "causation" in False Claims Act (FCA) cases. The FCA is probably the principal vehicle for bringing claims for violations of the Anti-Kickback statute (AKB). I previously published a lengthy post of this issue on December 5 (here).

Unfortunately, the AHLA analysis is behind two firewalls: a members-only firewall and another that limits access to members of AHLA’s Fraud and Abuse Practice Group.

Fortunately, the two authors -- John H. Lawrence & Michael H. Phillips, both of K&L Gates LLP -- have kindly posted for the full piece on their firm website. It's well worth a read, especially because, as the authors note, "the growing confusion and disagreement among district and circuit courts over this issue, coupled with the issue's import in FCA jurisprudence, make it a strong bet to be the next FCA issue decided by the Supreme Court."

"Violence Against Healthcare Workers is a Silent Epidemic"

From Becker's Hospital Review (Jan. 24): 

In 2023, Cleveland Clinic saw a record 14 million patients — and took 30,000 weapons from those patients and their visitors. 

Tomislav Mihaljevic, MD, president, CEO and Morton L. Mandel CEO Chair of Cleveland Clinic, delivered the statistic during the system's annual "State of the Clinic" address Jan. 24. 

He did not specify what sorts of weapons were confiscated, but for comparison, the Transportation Security Administration confiscated a record 6,737 firearms at airport security checkpoints last year. 

Cleveland Clinic, which employs 81,000 people across 300 global locations, was designed to be an "optimal work environment," Dr. Mihaljevic said: engaging, rewarding, inclusive and safe. 

But workers' safety was threatened thousands of times last year, with caregivers reporting 3,800 incidents of physical and verbal violence. 

In addition to installing magnetometers in every emergency department — allowing the health system to confiscate tens of thousands of weapons — Cleveland Clinic is continuing to bolster its police and security presence and is providing de-escalation training for caregivers, Dr. Mihaljevic said. 

The most recent data from the Bureau of Labor Statistics indicated that in 2021, healthcare and social services industry workers recorded 453,200 nonfatal injuries — more than any other industry. In response to rising rates of violence, some organizations are adopting codes of conduct for patients and families. And in September, the Senate introduced a bill that would make it a federal crime to knowingly assault a hospital worker; offenders could face up to 20 years in prison. 

"Violence against healthcare workers is a silent epidemic," Dr. Mihaljevic said. "Violence will never be accepted as a part of our job."

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.”

Healthiest & Unhealthiest Counties in the U.S.: Texas is Tops on One of These Lists

Market Watch's latest report (January 5) ranks 576 counties based on "14 key metrics that capture the individual, environmental and structural aspects of health for a given community. This includes measures such as life expectancy and health insurance coverage, water and air quality, and food insecurity and healthcare access." Here are the high- and low-lights:

Healthiest counties:

1. Marin County, Calif.

2. Gallatin County, Mont.

3. San Francisco County, Calif.

4. Arlington County, Va.

5. Maui County, Hawaii

6. New York County, N.Y.

7. Boulder County, Colo.

8. San Mateo County, Calif.

9. Chittenden County, Vt.

10. Bergen County, N.J. 

Unhealthiest counties: 

1. Harris County, Texas

2. Apache County, Ariz.

3. Pinal County, Ariz.

4. Webb County, Texas

5. Hidalgo County, Texas

6. Navajo County, Ariz.

7. Cameron County, Texas

8. Orange County, Texas

9. Livingston Parish, La.

10. Jefferson County, Texas 

No state appears on either list more than three times except for one: Texas. And it's the list no self-respecting government (at the state or county level) should want to be on.

If I were of a statistical bent, I'd compare these lists with three other metrics: per capita income, per capita governmental expenditures, and a map of cancer "hot spots." Interestingly, Medicaid expansion does not seem to play as great a factor as one might expect. Louisiana and Arizona share space on the "Unhealthiest" list, and both are states that expanded Medicaid eligibility. But is it a coincidence that the state with six out of ten counties on that list has not expanded Medicaid eligibility? I believe it has to be a factor. Compare the map at the top with the Kaiser Family Foundation's map of expanded-eligibility states (click to expand the images):

JAMA On-line: Scorn for Approach of Texas Supreme Court and AG in Cases Involving Exceptions to Abortion Ban

In an excellent on-line (and free) commentary in JAMA (Jan. 22, 2024), three Harvard authors ask the question: "Whose Responsibility Is It to Define Exceptions in Abortion Bans?" (Disclosure: One of the authors, Louise King, M.D., J.D., is a friend and former colleague.)

The context for this question is not surprising:

Two Texas court cases were filed in late 2023 requesting clarification of the scope of the life exception. In the first case, In re State of Texas, the Texas Supreme Court indicated that clinicians or the Texas Medical Board have responsibility for defining that exception. In the second case, State [of Texas] v Zurawski, the Texas attorney general suggested during oral arguments that the scope would be defined through medical malpractice litigation.

In short, both the Texas Supreme Court and the AG punted on the essential and inescapable issue of the scope of "life exception" to Texas's abortion ban.

Is that a problem?

At first glance, the Texas Supreme Court and attorney general may seem to defer to the expertise of clinicians and the medical system for when abortions are necessary to save a patient’s life. But upon closer analysis, these proposed ways to define the exception’s scope are neither workable nor constitutional. Putting the burden of defining a crime on the person who may commit it violates the US Constitution. Demanding that patients be injured and sue for malpractice to clarify a criminal statute is beyond draconian.

Legislating medical care means clinicians could risk prosecution if they act according to their ethics and training and follow the standard of care. But if they decline to provide care out of fear of legal consequences, they risk injuring a patient and facing a potential malpractice claim. It is for these very reasons that professional societies like the American College of Obstetricians and Gynecologists and the American Medical Association argue strongly against all legislation that interferes with the patient-clinician relationship.2 Texas and other states that criminalize abortion should consider the tremendously harmful effect that comes from interfering in clinical decision-making. 

This short but compelling commentary is worth reading in its entirety. It offers a fine illustration of the hall of mirrors created by the Texas legislature, Supreme Court, and Attorney General. 

 

JAMA: Increased Depression & Anxiety in Trigger States After Dobbs Decision

In a free article in the Journal of the American Medical Association (JAMA. 2024;331(4):294-301. doi:10.1001/jama.2023.25599) (PDF), researcher report that "[l]iving in states with trigger abortion bans compared with living in states without such bans was associated with a small but significantly greater increase in anxiety and depression symptoms after the Dobbs abortion opinion." The authors conclude:

The findings provide new evidence about the relationship between the changing abortion policy landscape and mental health following the Dobbs opinion. Although there were increases in symptoms of anxiety and depression for the general population after the opinion, changes in symptoms of anxiety and depression were greater among those living in states with trigger abortion bans, and in particular, among females within the age range generally used to compute lifetime abortion incidence. This finding could be related to many factors, including fear about the imminent risk of abortion denial; uncertainty around future limitations on abortion and other related rights, such as contraception; worry over the ability to receive lifesaving medical care during pregnancy; and a general sense of violation and powerlessness related to loss of the right to reproductive autonomy.

Donald Trump and the Perils of Practicing Medicine Without a License

Hydrochloroquine for COVID? Remember when that was a thing?

From The Messenger (Jan. 4):

In a study published this week in the journal Biomedicine & Pharmacotherapy, French researchers found that 17,000 people died across six countries because they depended on [the] drug. Researchers say this is because the drug was used in lieu of more effective treatments, and the potential cardiovascular issues it can cause as a side effect.

That number includes 12,000 deaths in the U.S. alone. Politico adds: "In fact, they say the figure may be far higher given the study only concerns six countries from March to July 2020, when the drug was prescribed much more widely."

You may recall that hydrochloroquine was then-President Trump's treatment of choice (along with household bleach). Here's the history reminder from The Messenger:

It was quickly shown to be ineffective. However, in a situation The Lancet describes as a “comedy of errors”, many political figures continued to endorse the drug as a legitimate COVID treatment. According to one report, Donald Trump, who was president at the time, was among the most prominent advocates of the medication as a treatment for COVID, mentioning it on Twitter and in press briefings.

“What do you have to lose? Take it,” Trump said during a White House briefing in 2020. “I really think they should take it. But it’s their choice. And it’s their doctor’s choice or the doctors in the hospital. But hydroxychloroquine. Try it, if you’d like.”

How Much Does the Fifth Circuit Care About Public Health?

The 5th Circuit Court of Appeals has handed down a couple of decisions this week that surprised me a lot (except that this 5th Circuit is the most conservative federal appellate court in the country):

1. Abortion. The Texas Tribune has a good story on the history of this litigation and Tuesday's ruling (State of Texas et al. v. Becerra, No. 23-10246  (Jan. 2, 2024). The court upheld a permanent injunction against an HHS injunction against DHHS's post-Dobbs guidance that the Emergency Medicine & Active Labor Act (EMTALA) requires Medicare providers to perform an abortion when that is necessary to stabilize a pregnant woman's emergency (life- or limb-threatening) condition. The court concluded that Congress did not intend for the statute to require performance of a procedure that was forbidden by state law. The court went on, asserting that Texas law provides plenty of protection for procedures, including abortion, when continuing the pregnancy poses a threat to the pregnant woman's life or a major bodily function. This is the same line taken by the Texas Supreme Court in its opinion that denied Kate Cox's bid for an abortion under the same exception to the state's abortion ban. 

Meanwhile, according to Kate Riga at TalkingPointsMemo.com, the same issue is in front of the 9th Circuit Court of Appeals. Depending on the outcome of that case, the issue may land at SCOTUS's doorstep soon.

2. E-cigarettes. The case is Wages and White Lion Investments, L.L.C. v. Food & Drug Administration, No. 21-60766 (Jan. 3, 2024). This was an en banc proceeding of the Court of Appeals, with a majority opinion by Judge Oldham (and joined by nine others) and a dissenting opinion by Judge Haynes (joined by four others). The result of the case is that the FDA is ordered to review over 1 million pre-market tobacco applications (PMTAs) against the backdrop of clear and convincing evidence that e-cigs represent a serious health threat, especially to minors, with no countervailing health benefits. 

This is Judge Haynes' take on the majority opinion (emphasis added):

It is against this backdrop that the FDA reviewed the PMTAs of Wages and White Lion Investments, LLC, d/b/a Triton Distribution (“Triton”) and Vapetasia LLC (“Vapetasia”) (collectively, “Petitioners”) and issued marketing denial orders (“MDOs”) to Petitioners.  The FDA denied Petitioners’ PMTAs because they did not contain any reliable evidence suggesting the benefits of Petitioners’ flavored products outweighed the significant risks to youth—an outcome that aligned with both the guidance the FDA had given to applicants and its statutory mandate under the TCA.  But the majority opinion erroneously concludes that the FDA changed the evidentiary standards applied to Petitioners’ PMTAs and wholly ignored Petitioners’ marketing plans, and thus acted in an arbitrary and capricious manner.  Unfortunately, based on a misreading of the law and a misconstruing of the relevant facts, the majority opinion supersedes the FDA’s work by remanding instead of denying the petition, which cuts the FDA’s legs out from under it in the middle of a dangerous and constantly evolving public health crisis.  

In so doing, the majority opinion also departs from all but one of our sister circuits that have addressed the same issue.  See, e.g., Magellan Tech., Inc. v. FDA, 70 F.4th 622 (2d Cir. 2023) (unanimous denial); Liquid Labs LLC v. FDA, 52 F.4th 533 (3rd Cir. 2022) (unanimous denial); Avail Vapor, LLC v. FDA, 55 F.4th 409 (4th Cir. 2022) (unanimous denial), cert. denied, No. 22-1112, 2023 WL 6558399 (U.S. Oct. 10, 2023); Gripum, LLC v. FDA, 47 F.4th 553 (7th Cir. 2022) (unanimous denial), cert. denied, 143 S. Ct. 2458 (2023); Lotus Vaping Techs., LLC v. FDA, 73 F.4th 657 (9th Cir. 2023) (unanimous denial); Prohibition Juice, 45 F.4th 8 (unanimous denial); see also Breeze Smoke, LLC v. FDA, 18 F.4th 499 (6th Cir. 2021) (denying motion for stay), app. for stay denied, 142 S. Ct. 638 (2021).  The only circuit that granted a petition for review in a comparable context did so on much narrower grounds than the majority opinion embraces today.  See Bidi Vapor, 47 F.4th at 1195 (remanding based on the FDA’s failure to consider marketing and sales-access-restriction plans); but see id. at 1208–18 (Rosenbaum, J., dissenting).  Despite the Eleventh Circuit’s opinion, however, it is telling that the Supreme Court recently denied certiorari for two cases in which other circuits considered similar facts to those before us and denied the petition for review.  See Gripum, LLC v. FDA, 143 S. Ct. 2458 (2023) (mem.); Avail Vapor, LLC v. FDA, No. 22-1112, 2023 WL 6558399 (U.S. Oct. 10, 2023) (mem.); see also Breeze Smoke, LLC v. FDA, 142 S. Ct. 638 (2021) (mem.) (denying application for stay of FDA’s denial, without any recorded dissent). 

Reevaluating this case en banc, I would reach the same determination that the merits panel did and deny the petitions for review before us.

I concur. 

Four New Advisory Opinions from HHS-OIG

On Jan. 3, HHS's Office of Inspector-General (OIG) released four new Advisory Opinions, all apparently finalized at the end of December:

Advisory Opinion 23-12: This favorable opinion regards a one-time, voluntary redemption offer to physician partners reaching age 67 to have their partnership units repurchased by a partnership over a 2-year period, contingent upon the physician partners’ agreement to retire from the practice of medicine.  

Advisory Opinion 23-13: This favorable opinion regards the use of a "preferred hospital" network as part of Medicare Supplemental Health Insurance ("Medigap") policies, whereby an insurance company would contract with a preferred hospital organization to provide discounts on the otherwise-applicable Medicare inpatient deductibles for its policyholders and, in turn, would provide a premium credit of $100 off the next renewal premium to policyholders who use a network hospital for an inpatient stay. 

Advisory Opinion 23-14: This favorable opinion regards the use of a "preferred hospital" network as part of Medicare Supplemental Health Insurance ("Medigap") policies, whereby an insurance company would contract with a preferred hospital organization to provide discounts on the otherwise-applicable Medicare inpatient deductibles for its policyholders and, in turn, would provide a premium credit of $100 off the next renewal premium to policyholders who use a network hospital for an inpatient stay.  

Advisory Opinion 23-15: This favorable opinion regards a physician consulting company’s proposal to offer physician practices that are current customers of the company certain gift cards for referring potential new physician practice customers.

 

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.