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

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

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

Reducing hospital mortality rates

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

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

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

Another week of Hellacious Health Care Fraud Cases (IV)

Some serious violations with serious legal consequences. . . . $54 million bribery and kickback scheme , , , 30 years in prison . . . 25 years in prison . . . Opioid abuse resulting in 5 patient deaths. Every profession has its scoundrels whose hopes for riches overpower their judgment. You don't have to be an evil person to do an evil thing, but these cases do remind me of the opening to the old radio series, "The Shadow."

Man Convicted Of $54M Bribery And Kickback Scheme Involving Fraudulent Prescriptions (June 16, 2023; U.S. Department of Justice)

Lab Billing Company Settles False Claims Act Allegations Relating To Unnecessary Respiratory Panels Run On Seniors Receiving COVID-19 Tests (June 16, 2023; U.S. Department of Justice)

Rome Jury Finds Dr. Charles Adams And Full Circle Medical Center Liable For False Claims Act Violations (June 16, 2023; U.S. Attorney's Office, Northern District of Georgia)

Health Care Information Technology Contractor Agrees To Pay More Than $1.7 Million To Resolve False Claims Act Allegations For Charging Unallowable Costs To The National Institutes Of Health (June 16, 2023; U.S. Attorney's Office, District of Maryland)

Raleigh ENT Doctor Sentenced To 25 Years In Prison For Adulterating Surgical Devices, For Defrauding Medicare, And For Stealing Patient Identities (June 16, 2023; U.S. Attorney's Office, Eastern District of North Carolina)

Cambria County Woman Pleads Guilty To Conspiracy To Commit Health Care Fraud (June 16, 2023; U.S. Attorney's Office, Middle District of Pennsylvania)

Suburban Chicago Doctor Sentenced To Federal Prison And Fined $1 Million For Health Care Fraud (June 16, 2023; U.S. Attorney's Office, Northern District of Illinois)

Former Alaska Advanced Nurse Practitioner Sentenced To 30 Years For Illegally Prescribing Millions Of Opioids Causing Five Deaths (June 16, 2023; U.S. Attorney's Office, District of Alaska)

Covid-related Health Care Fraud

Like the medical consequences of "long-Covid," the legal repercussions for conduct during the emergency phase of the pandemic seem destined to remain with us for a long time. Case in point: It was announced today that an urgent-care chain settled a False Claims Act suit with DOJ for $1.6 million. The case arose out of whistle-blowers' allegations that the chain was illegally "upcoding" Evaluation and Management claims to Medicare for the testing and treatment of patients with suspected exposure to COVID-19 during the Coronavirus pandemic. 

There are admittedly some close judgment calls when it comes to coding claims for reimbursement, whether payment is sought from Medicare or from a private health insurer. And, as the announcement of the settlement recites, "The claims resolved by the settlement are allegations only, and there has been no determination of liability." The case for liability had to be pretty strong, though. DOJ gets to choose whether to get involved in qui tam suits brought by whistle-blowers, and the Department most often declines to take what it regards as weak cases, leaving the allegations to private litigation. 

Plastic surgeon to be sentenced after manslaughter conviction

It is rare, but not unheard of, for a physician to be prosecuted criminally for conduct that would otherwise be treated as medical malpractice and tried in a civil courtroom. Even egregious departures from the applicable professional standard of care will usually be treated as gross negligence or, rarely, an intentional tort (like assault), either of which may give rise to liability for punitive damages, usually multiples of the compensatory damage award. Again, even in most of these extreme-negligence/intentional-tort cases, prosecutors seldom seek criminal charges.

So when Beckers Hospital Report picked up a story from Colorado about a plastic surgeon who has been convicted of attempted reckless manslaughter and obstruction of telephone service (both felonies), a couple of questions occurred to me:

1. How bad was the surgeon's conduct to expose him to criminal liability?
2. "Obstruction of telephone service"? What on earth?

The surgeon was performing a breast augmentation procedure on an 18-year-old patient who, while under anesthesia, suffered a cardiac arrest and went into a coma. Staff members asked the surgeon for permission to call 911, and the surgeon said no. (Interference with telephone service?) 

Instead, the surgeon performed CPR himself and didn't allow a call to emergency responders until 5 hours after the cardiac arrest. The patient died 1 year later in a nursing home (NBC News, June 15, 2023).

More questions:

1. "Attempted" manslaughter? I am guessing the charge was negotiated down to attempt, despite the fact that the surgeon surely caused the patient's eventual death. The one-year delay before the patient died may have made it at least questionable that the state could prove causation in a manslaughter case. I'm not a Colorado attorney, but there also may be a statute or case law that bears on the issue of causation when there's a substantial delay between the injury and the death -- unlikely, but possible.
2. What were the clinic's staff thinking? That they might be fired if they disobeyed the surgeon's instruction not to call for help? I hate to be a Monday-morning quarterback, but this is really unconscionable.

The press version of legal cases often raise more questions than they answer and frequently get details wrong. But from what's available in NBC's reporting, this looks like a case that deserved to be scrutinized by the criminal justice system.

Hellacious Health Care Fraud Cases of the Week (III)

A fresh crop of miscreants -- some charged, some convicted, some sentenced. It's hard to quantify, but the continuing tidal wave of fraud enforcement actions leads me to question the deterrent effect claimed by criminal law theorists. Or it may be that criminal liability deters penny ante stuff but when the payoff is in the millions, the possibility of some time in jail may pale in comparison the the potential gain.

Two Jacksonville Compounding Pharmacies And Their Owner Agree To Pay At Least $7.4 Million To Resolve False Claims Act Allegations (June 15, 2023; U.S. Department of Justice) Three Defendants Plead Guilty In Personal Care Attendant Fraud Cases (June 15, 2023; Massachusetts Attorney General) Attorney General Josh Stein Announces $4.7 Million Health Care Conviction (June 14, 2023; North Carolina Attorney General) Carr: Hart County Man Indicted For Elder Exploitation (June 14, 2023; Georgia Attorney General) Office Of The Attorney General’s Medicaid Fraud Control Unit Sends Owner Of Home Health Company To Prison For 57 Months For $1.4 Million Fraud Scheme (June 13, 2023; Texas Attorney General) Attorney General Alan Wilson Announces Arrest Of Kershaw Co. Man For Exploitation Of A Vulnerable Adult (June 13, 2023; South Carolina Attorney General) TennCare Fraud Investigation Leads To Arrest In Memphis(June 9, 2023; Tennessee Attorney General)

Classic case of negligent infliction of emotional distress? Maybe not.

Negligent infliction of emotional distress (NIED) is exactly what it sounds like. As with most negligence torts, a plaintiff has to show duty, breach, causation (both factual and legal/proximate (don't ask)), injury (specifically extreme emotional distress), and damages. NIED also usually involves a fact pattern where the defendant's conduct put the plaintiff at immediate risk of physical injury.

There are, however, some torts where one or more of those elements is presumed without an evidentiary showing. One of them is NIED under circumstances that courts regard as sufficiently vexing and extreme that extreme emotional distress may be presumed. Erroneously telling a family that a close family member has died is one of those types of cases. 

That is exactly what happened on June 13, when Zuckerberg San Francisco General Hospital called the wrong family about a patient's death. The family was informed that their son had died at the hospital. The family, as it happened, had a 30-year-old son. But before traveling to San Francisco, the family asked for further identifying information, and the hospital described a decedent who was 4 inches taller and 50 pounds heavier than their son. The decedent inexplicably had the couple's son's identification, though, and the hospital has a policy -- one that sounds reasonable to me -- that calls for prompt notification of parents when a family member has died. It's hard to know what more the hospital could have done to avoid calling the family, who alone knew the height and weight of their actual son.

So was there a breach of the hospital's standard of care? It may take further factual investigation and even expert testimony to know for sure. The case does highlight the difficulty hospitals and other health care providers face when they are charged with a duty to do the right thing, particularly in the context of the many highly charged situations they deal with on a daily basis.

Source: Becker's Hospital Review (June 16); NBC Bay Area (June 15).

2nd Amendment thoughts -- The Constitution is not a suicide pact (or is it?)

Some random thoughts on Father's Day about gun violence in the United States.  

According to the authoritative Gun Violence Archive website,  there were 125 shootings on Father's Day (July 18) resulting in 149 victim injuries and 49 victim deaths. Six  shootings involved 4 or more victims being injured or killed (the commonly accepted criterion for a "mass shooting"), including 22 injured and 1 killed in a shooting at a Juneteenth celebration in Willowbrook, Illinois, and 9 injured and 1 killed in St. Louis.  Today.

All gun deaths are horrible, but surely it is worth noting that it seems a disproportionate number of victims appear to be young people, the age of our kids (or, in my case, my grandkids).

As parents, it is our responsibility to try to make the world reasonably safe for our kids. We try to protect them from the consequences of choices and conduct that could kill or maim them. It is admittedly impossible to eliminate all risk from the world, but we do our best to manage that risk. Except when it comes to guns.

I am writing this in HealthLawBlog because gun violence is not only a criminal-law issue but also a public-health issue. As the American Public Health Association (APHA) has written:

Gun violence is a leading cause of premature death in the U.S. Guns kill more than 38,000 people and cause nearly 85,000 injuries each year. As a longtime advocate for violence prevention policies, APHA recognizes a comprehensive public health approach to addressing this growing crisis is necessary.

The biggest obstacle is the number of politicians who are beholden to the gun lobby for secure and well-financed primaries. There are plenty of voters who have been sold an absolutist interpretation of the Second Amendment, and politicians are scared of alienating them, too.

The question posed in the title of this post deserves an answer. 

My SMU Law colleague Eric Ruben argues persuasively that Second Amendment absolutism is based upon a serious -- dare I say fatal? -- misreading of that amendment (click here for links to most of his writings; click here for his latest article, forthcoming in the Yale Law Journal). His work is well worth reading. Suffice it to say that gun-rights absolutists base their position on an ahistorical reading of the Second Amendment, an error that is compounded in the Court's most recent Second Amendment decision by what Ruben and his co-author, Joseph Blocher, in their Yale piece call "originalism-by-analogy," a unique version of originalism, seemingly invented to produce a particularly virulent reading of the Second Amendment.

Justice Robert Jackson wrote in his dissent in Terminiello v. City of Chicago:

There is danger that, if the Court does not temper its doctrinaire logic with a little practical wisdom, it will convert the constitutional Bill of Rights into a suicide pact.

The current Court would do well to heed the wise words of Justice Jackson. 

CMS estimates national health expenditures to increase to 19.6% of GDP in 10 years

From Health Affairs (online, June 14):

New estimates released today from the Office of the Actuary (OACT) at the Centers for Medicare and Medicaid Services (CMS) and published online today in Health Affairs project a rate of national health spending growth of 4.3 percent for 2022, with expenditures projected to have reached $4.4 trillion. Health spending over the course of 2022–31 is expected to grow 5.4 percent per year on average.

This study will also appear in the July 2023 issue of Health Affairs. The link to the full study, once the embargo lifts, will be https://health-policy.healthaffairs.org/keehan/july2023issue/aop.

Economic growth is expected to have outpaced growth in national health spending in 2022, causing ta decrease in the projected health spending share of gross domestic product (GDP) from 18.3 percent in 2021 to 17.4 percent in 2022. However, over the course of the 2022–31 period, nominal GDP is expected to grow 4.6 percent annually—0.8 percentage point lower than average growth in national health expenditures—resulting in health spending accounting for 19.6 percent of GDP by 2031 (emphasis added).

The story of the lethal neurosurgeon's murderous rampage from one North Texas operating room to another to another is still pretty fresh. Reading the superb reporting of Laura Beil and then listening to the excellent podcast raised one large question over and over: How could these hospitals allow "Dr. Death" -- Dr. Christopher Duntsch -- to continue to mutilate and kill patients despite overwhelming evidence that he lacked the skills to perform these operations and allegedly performed surgery while he was impaired? He's serving a life sentence in prison so his doctoring days are over, but the question persists.

Yesterday (June 13), Gov. Greg Abbott signed into law HB 1998 -- closing what has been dubbed the "Dr. Death loophole" -- with an effective date of September 1, 2023. The "loopholes" are gaps in the reporting system known as the DHHS National Practitioner Data Bank, which was designed to encourage reporting by state medical boards and hospitals when adverse actions (e.g., restrictions or revocations of medical license or medical staff privileges, medical malpractice awards) were taken against a physician. As stated in the NPDB Guidebook: 

Congress enacted legislation leading to the creation of the NPDB because it perceived that the increasing occurrence of medical malpractice litigation and the need to improve the quality of medical care had become nationwide problems that warranted greater efforts than could be undertaken by any individual state. Congress also identified the need to restrict the ability of incompetent physicians and dentists to move from state to state without disclosure or discovery of the physician's previous damaging or incompetent performance. Congress felt that the threat of private money damages liability under federal laws, including treble damages liability under federal antitrust law, unreasonably discouraged physicians and dentists from participating in effective professional peer review. Therefore, Congress sought to provide incentives and protection for physicians and dentists engaging in effective professional peer review.

Title IV led to the establishment of the NPDB, an information clearinghouse, to collect and release certain information related to the professional competence and conduct of physicians, dentists, and, in some cases, other health care practitioners. The creation of the NPDB represented an important step by the U.S. government to enhance professional review efforts by making available to eligible entities and individuals certain information concerning medical malpractice payments and adverse actions.

HB 1998 contains a few measures designed to prompt actions when the NPDB might not require reporting, including:

equipping the Texas Medical Board with necessary tools to protect patients from dangerous physicians while also maintaining transparency about physician disciplinary records.

Here's what else the new law provides: 

• Lying on medical license applications will be a Class A misdemeanor.
• Physicians who have been convicted of a felony or misdemeanor related to moral turpitude may be denied a license to practice medicine in Texas.
• The Medical Board is required to conduct a criminal background check in connection with license renewals.
•  Monthly monitoring of physicians will be required using the National Practitioner Data Bank.
•  The Texas Medical Board must update physician profiles on its website within 10 days of being notified about any disciplinary action against a physician. 

(Source: Becker's Hospital Review) 

Probably no system is fool-proof, but this new law tightens things up considerably. Even before HB 1998 was passed, though, I wondered if our law ties the hands of the Medical Board too much. For example, Section 155.003(e), Occupations Code provides that "An applicant is not eligible for a license if: (1)  the applicant holds a medical license that is currently restricted for cause, canceled for cause, or suspended for cause or revoked by a state, a province of Canada, or a uniformed service of the United States." But not all revocations, restrictions, and suspensions are created equal. For example, many are related to substance abuse, and Texas physicians who successfully complete a rehab program and stay clean are often allowed to return to practice. It's hard to justify a more draconian result when a Texas physician is disciplined for similar reasons by another state's licensing board.

AHLA's most recent 50-state survey looks great: Health Care Fraud Law: A 50 State Survey. The research required for such a project is back-breaking. 

My first publication for AHLA (actually, it was for NHLA, one of the merger partners that produced the AHLA) was “State Illegal Remuneration and Self-Referral Laws” (1996). Searching out every relevant state statute led to free-standing prohibitions, prohibitions inside professional licensing laws, and -- in one memorable instance -- a prohibition against paying for referrals that was buried in the Massachusetts motor vehicle insurance statute. 

It looks like AHLA rounded up health lawyers from each jurisdiction to research their own state's laws. Smart. Very smart.

Members and non-members alike can order a copy here.

New study endorses harvesting hearts after declaration of cardiopulmonary death

There's an Associated Press article in this morning's Dallas Morning News describing a multicenter study involving the transplantation of hearts taken out of donors who were not brain dead but had been declared dead after irreversible cessation of cardiac and circulatory function (DCD/DCCD).

Certain solid organs have been transplanted after DCD for decades. The protocol for harvesting involves the following steps:

• moving the patient to the operating room (usually from an ICU);
• stopping all life-supporting measures;
• waiting for a fixed period of time for the heart to stop beating (usually 60-90 minutes);
• if the heart stops, waiting another period of time (usually 5 minutes) to see if the heart will autoresuscitate;
• if autoresuscitation doesn't occur, death is declared and organ harvesting (usually kidneys, liver, and pancreas).

The DCD procedure was designed to shorten the warm ischemic time from when cardiopulmonary function ceases and the harvested organ can be restored to function in the recipient's body. Even with that innovation, though, hearts were not considered for transplantation because of their extreme fragility.

As described by the AP, however, the results of a multicenter study over a number of years establishes that the six-month survival rate after DCD (94%) was slightly better that the survival rate for heart transplants after brain death (90%). So what has changed? As reported by the AP:

Now doctors can remove those hearts and put them in a machine [a "heart-in-a-box" device invented by TransMedics, the sponsor of the study] that “reanimates” them, pumping through blood and nutrients as they’re transported –- and demonstrating if they work OK before the planned transplant.

I am all for increasing the supply of donor hearts, and this is a very interesting development.  I am wondering, however, how to square the transplantation of a viable heart with the cardiopulmonary criterion of death. The statutory standard of "irreversible cessation of all cardiopulmonary function" will  now need to be understood as “irreversible in the donor’s body but not necessarily in the body of the recipient of the heart.” That begs the question, which has applied to DCD from the beginning, why has cardiopulmonary ceased (because we took away the donor’s life support) and why is the cessation irreversible (because we didn’t try to reverse it). Once we actually try to restore cardiac function (“reanimating” the heart in a “heart-in-a-box” device), some hearts are restored and do at least as well in the recipient’s body as a heart from a brain-dead patient. 

Are we comfortable with this slightly altered version of "irreversible cessation"? Should we be? The so-called "dead donor rule" (DDR) forbids killing a patient for organs or removing organs needed to sustain life from a living patient. So far, we have avoided the slippery slope of removing organs from patients who are almost dead or "as good as dead." How certain are we that this new approach to DCD heart transplantation satisfies the DDR? 

Allina Health Suspends Policy to Deny Care to Patients with Unpaid Bills

One week ago (see Becker Health (no paywall), June 1), the N.Y. Times reported that Allina Health's policy was to deny clinic care to patients with unpaid bills. Emergency room visits were not part of the policy, and the unpaid balance had to exceed $4,500. This may be a smart business decision, but -- as the refrain goes throughout the semester in my health law class -- health care is different, and it's not a good look for a major nonprofit health care provider. The policy is apparently quite widespread. A 2022 study found that about 20% of hospitals deny nonemergency care for the same reason (Kaiser Health, Dec. 2022).

Today, the Star Tribune reported that Allina has suspended its policy, presumably in no small part because the Minnesota AG was inviting patients to submit reports of denials to his office as he considers launching an investigation into the policy.

Hellacious Health Care Fraud of the Week (II)

Continuing a feature that I introduced on May 21,  here are four more cases released today by the OIG at HHS. Ordinarily I would pick a favorite based upon the audaciousness of the scheme or the staggering financial implications, but these four are all interesting in their own way:

• Chief Compliance Officer Convicted of $50M Medicare Fraud Scheme (June 8, 2023; U.S. Department of Justice)
• Lavaca Man Sentenced In $134 Million COVID-19 Health Care Fraud And Money Laundering Scheme (June 8, 2023; U.S. Attorney's Office, Western District of Arkansas)
• Battle Creek Couple Sentenced On Fraud Charges (June 6, 2023; U.S. Attorney's Office, Western District of Michigan)
• Stacey Hayes Convicted Of Felony Theft Of Medicaid Funds (June 2, 2023; New Hampshire Attorney General)

More on Consolidation within the Health Care Industry

Fortune's team of Maria Aspan and Erika Fry have focused their analytical lens on the growth of health care firms in their recent article, "Companies like CVS and UnitedHealth are now some of the world’s biggest businesses. Is that healthy for the rest of us?" (May 24, 2023). It's a good read.

Let's start some context. Despite a recent minor dip, health care is the largest single sector that contributes to our Gross Domestic Product, the equal of defense and education (at all levels) combined. 

Although this number -- whether expressed in absolute dollars, as a percentage of GDP, or as expenditures per capita -- is vastly larger than the expenditures of every other developed country in the world. And by almost any measure, the results -- in terms of life span, infant and maternal mortality, etc. --  pale in comparison to the same countries and many developing countries, as well. Much has been written about this conundrum. After all, we are a rich country and if we want to spend a lot of our wealth on health care, well, why not? The counter-argument is multifaceted. Are we as a society making smart decisions about those health care expenditures? Are there better strategies than "throw a ton of money at what ails you and hope that something works"? Are we doing all we reasonably can to root out waste and fraud? As COVID vividly and catastrophically demonstrated, expenditures for health care goods and services are not equitably distributed to racial and ethnic minorities, economically disadvantaged individuals and households, or the under- and uninsured, a group that persists despites the reforms of Obamacare.

This is Aspan and Fry's concern, too. They are looking at the rapid and extensive increase in firm size and the consolidation of disparate providers (hospitals, pharmacies, clinics, physician practices) into behemoths of unimaginable market power see at least a correlative relationship with GDP. Much of the merger activity in the health care sector is fueled by debt and venture capital, all of which demands cash flow to service. In other words, relentless growth in net revenues, year over year and quarter over quarter. Where's the incentive to keep patients healthy and out of hospital beds or to provide the most cost-effective care?

Granted, providers prosper by delivering more goods and services. And insurers prosper by paying for less care. As the authors point out, there is a conflict of interest at a fundamental level of this business model. Meanwhile, it's the wild, west out there, and the big firms seem to be doing just fine, at least for now. Whether that translates into better health outcomes for the rest of us is still very much in doubt.

Merger Chaos at the FTC?

If there's one indisputable legal and business trend in the health care industry over the past 10-20 years, it's the move toward greater consolidation of health care providers. Some observers praise consolidation on efficiency grounds (cutting duplication and waste --> lower costs --> lower prices for patients), while others decry consolidation because it concentrates market power and lessens competition, which leads to higher prices for patients.  

The mechanism for resolving these claims in connection with large proposed mergers is the statute known as Hart-Scott-Rodino (H-S-R), along with its numerous FTC, DOJ, and SCOTUS interpretations. But according to Daniel Sokol and Dick Pierce, the times they are a-changin', though where federal policy is headed is anyone's guess. 

In his Jotwell essay (May 25, 2023), Pierce argues that two articles by Sokol "are required reading for anyone who is interested in antitrust law, administrative law, government regulation, or corporate law." That's just about everyone in the legal profession, but I'll throw in health care law for good measure.

The catalyst for change is Lina Khan, the Biden Administration's chair of the FTC. As described by Pierce, 

Khan has made it clear that she disagrees with virtually every characteristic of the [FTC/DOJ merger]  guidelines, including the guidelines’ goals. She rejects the goal of maximizing consumer welfare, which the Justice Department and the FTC have pursued for the last 50 years. Instead, she has emphasized the need to protect competitors from large firms that charge low prices—a goal that the enforcement agencies and the Supreme Court disavowed 50 years ago. Khan cannot further her stated goals by applying the 2010 guidelines.

The Pierce essay is a quick and easy read. The implications of Chair Khan's views on mergers portends an era that will be messy and uncertain. 

Texas Chiropractic Board Requests AG Opinion

This would be a good fact pattern for a 1L Legislation-Regulation final exam. The question posed by the Board in its request is "Whether the Texas Board of Chiropractic Examiners has discretion to suspend or revoke a chiropractor’s license under Texas Occupations Code section 201.5065 if the chiropractor is convicted of certain offenses." The language in this section makes suspension or revocation of a license mandatory upon conviction of certain offenses. Other language sprinkled around the Occupations code provides for discretionary suspension or revocation for other offenses. Apparently the Board wants clarification as to the effect of mandatory authority on these discretionary provisions. Nice little statutory interpretation problem, eh? I think the answer should be clear: the Board has both types of authority absent a clear indication that the legislature intended to negate the discretionary provisions. I'll get back to you when the AG's opinions staff gives us their answer . . . 

Hellacious Health Care Fraud of the Week (I)

As with banks and bank robbers, health care is where the money is. And for some so-called health care providers, the temptation to rob, steal, and cheat is apparently irresistable. Starting today I will highlight some of the more audacious schemes drawn from the week's health fraud indictments, settlements, and verdicts.

We begin this series with the settlement of a civil fraud case in the Southern District of New York. A Bronx nursing home allegedly made cash payments to a hospital supervisor in return for patient referrals. Okay: big yawn. But the second fraud scheme is the frosting with sprinkles on top of the boring cake. The nursing home allegedly switched residents out of the lower-paying Medicare Advantage plan and into the relatively higher-paying Original Medicare plan without the consent of their residents. The parties paid $3.46 million to the United States to settle the claims.

"Preauthorization" and why your insurer is out to get you

I am not saying health insurers are evil. Or that their policies are evil. But their claims-handling practices are very often ill-advised, are calculated to maximize corporate revenues at the expense of the health of their insureds, and too often produce results that are, well, evil.

One of the defining characteristics of "managed care" -- which used to be this funky little thing over in the corner of our system of healthcare finance and delivery and now is everywhere -- is the notion of preauthorization by your insurance company before you can get almost anything: a visit to a specialist, hospitalization, a prescription drug, etc. The craziness that sometimes marks this process is hard to fathom (other than the aforementioned profit motive). Dr. Amy Faith Ho has taken this on over on Twitter and her posts are well worth following.

ChatGPT Summary of Congressional Testimony on “Innovation and Patient Access”

I'm re-posting the latest entry from Jason Shafrin's blog, "Healthcare Economist," for two reasons. 

First, "innovation and access" is and always will be an important health law and policy topic. The testimony on May 10 covered Alzheimer's, cancer, FDA regulatory issues, Big Pharma R&D, and NIH research support. Important stuff.

Second, the blog post consists of summaries of testimony that were generated, in whole or in part, by ChatGPT. 'Nuff said? I could have waded through the testimony and written my own summaries or paid a research assistant to do the same. And I would certainly read the testimony if I were citing it, relying on it, etc. I am guess, though, that these summaries are serviceable enough as background reading (and a way of determining whether the testimony appears interesting enough to invest more of my time reading it).

RBG on the Overturning of Roe v. Wade

This was posted recently by a wonderful German attorney and former Bioethics student of mine, Christine Gärtner. It appears to be part of an interview with Justice Ginsburg, and I am not sure of the source, but it sure looks like her crystal ball was firing on all cylinders. Of course, lots of others were making the same prediction, though she cut to the policy question that, honestly, can have only one answer: