Transparency in health care pricing doesn’t come easily

by on December 27, 2009 at 12:07 pm in Economics, Medicine | Permalink

The health care reform bill before the U.S. Senate would require hospitals to publicize their standard charges for services, but New Hampshire and Maine have gone much further in trying to make health care costs more transparent to consumers.

New Hampshire and Maine are the only states with Web sites that let consumers compare costs based on insurance claims paid there.

In New Hampshire, the price variation across providers hasn't lessened since the Web site went live in 2007.

The link is here.  You'll find the background data from New Hampshire, and a study, here.  Here are some anecdotal accounts.  Here is a CBO background paper on the topic.  I can think of a few hypotheses:

1. People don't check the website.

2. People can't interpret the information on the website.

3. People still go where their doctors recommend or to facilities they are familiar with.

4. Many local choices, especially in these states (somewhat rural, so-so road connections), don't involve a lot of competition.

5. All of the above.

Other?

Noah Yetter December 27, 2009 at 12:16 pm

It’s #5.

fishbane December 27, 2009 at 12:24 pm

Gah, that was horribly phrased, sorry. Let me try again.

The people who would normally be most price-sensitive due to income constraints, and thus provide price pressure, are the least likely to comparison shop, as they only consume in emergencies.

nick December 27, 2009 at 12:50 pm

My understanding is that prices that insurance paid are mostly useless. One of the main advantages of insurance is that they have negotiated reasonable prices and if you have insurance and the place accepts it then it probably does not matter what it is.

If you do not have insurance, then this information is useless to you because you will be charged a random number at least 10x larger so there is nothing that can help you compare and choose where to go.

And there is a common fraud that seems to be legal where your doctor and your hospital take the insurance but you get a third bill from a provider you never met that was contracted by the hospital like anesthesiologist who charges something ridiculous and does not take insurance (which means he is not subject to reasonable pricing). I bet there are kickbacks from those providers yo the hospital and I bet they are legal too.

Colin December 27, 2009 at 12:56 pm

I think nick and jayson have the most plausible explanations.

farmer December 27, 2009 at 1:06 pm

Vladimir hit the nail on the head. As long as it’s somebody else paying for it, why ought I care to shop around?
as a NH resident, though, I must confess I did not know of it’s existence. (nor did my sister, a NH nurse)

Rahul December 27, 2009 at 1:27 pm

The debate is often confusing because seperate entities are rarely, cleanly identified in these arguments:

(1) Patients
(2) Insurers
(3) Providers (doctors, hospitals etc.)
(4) Regulators

Bill December 27, 2009 at 2:22 pm

As an antitrust lawyer, I have represented hospitals, HMOs and PPOs, and insurance carriers.

Pricing transparency has risks–
1. Easier for hospitals and docs to coordinate. They all wonder what each is charging, and for hospitals, they can monitor admits using state data.

2. This is not transaction pricing–it is list prices–so the coordination effect is achieved for list, but the competition is at discount off of list. Now, if a dominant HMO or carrier adopts a most favored customer clause, it is assured it is getting the lowest price, and all other hospitals are assured that if they get the same deal (and they do ask what is the lowest discount others offer, and they get told if another hospital has a lower discount), they can accept the discount negotiation, because they know they are comparable on price and discount with a rival.

3. Look for uniform increases by percentages the next year. I would bet variability declines but list prices increase.

4. High list prices have perverse effects. Some people pick the high list price supplier (using their insurance) because they assume a higher price means a better product.

5. Carriers like high list prices (and low transaction prices) because a consumer now has a reason to purchase insurance. Nevermind that insurance carriers pay transaction prices, not list prices.

6. What they should publish is transaction prices (delayed by 3 months and aggregated). Then you would see angry consumers asking for transaction prices and not list prices.

farmer December 27, 2009 at 4:20 pm

@NH
no, i think tyler is right! east/west travel north of, say, concord btwn ME and NH is really difficult! E/W travel between northern parts of VT, ME and NH is a perennial discussion for legislators re: infrastructure projects

mrrunangun December 27, 2009 at 9:44 pm

To expand upon Bill’s post above:

Hospitals each contract with hundreds of insurance plans. The contracts are generally on terms such as, “50% of billed charges or 110% of medicare, whichever is less.” Thus in order not to leave money on the table, the list price has to be at least 220% of medicare. The hospital’s list price is constructed so as to leave no money on the table with its worst significant contract. No one pays the list price except the uninsured individual who does not attempt to obtain the discount ordinarily allowed. The discount is usually the medicare price, as to charge anyone less than the medicare price is, by law, technically medicare fraud. Publishing a table of list prices would not give transparency to anything because the list prices are a fiction resulting from the insurance system.

mulp December 28, 2009 at 1:59 am

Living in NH and paying personally $9400 a year for an individual $5000 deductible policy (with additional payments once the deductible has kicked in), I am aware of the website with cost data, but those prices don’t reflect the policies of my insurer. My insurer will apply only the fee they have negotiated with their network of providers to my deductible, and the providers in the network have agreed to charge me only the fee they negotiated with my insurer.

So, if I can find a provider that charges only $1000 for a procedure out of network with the best in-network price for that procedure being $1100, if I’m going to hit $5000, then I’m better of paying $1100 because it will cause my insurance to kick in faster.

On the other hand, the high price of tests, even at the insurer negotiated rates, paid out of my pocket with my cash, which thanks to the poor economy since 2001 is not in abundance, means that I judge my doctors recommendations based on money, not medical practice. I am rolling the dice that if I need treatment, I will really need expensive treatment that will be paid for by my insurer after I pay about $6000-$10,000 in cash (in addition to the $9400 annually). I figure to go for the $100,000 in health care expenses in a year if I need anything at all.

So, the high deductible does not make me a “better consumer of health care” but instead a gambler, looking for the heads I lose $10,000 a year, tails I win $100,000 minus $20,000.

I can’t figure out why anyone would think anyone would spend their own money on something rather unpleasant based on the possibility of avoiding a vague and uncertain illness years and decades in the future. Why should I spend $1000 every other year to maybe save $5000 over a decade, especially when the $1000 pays for being subjected to an unpleasant experience that will be called “negative” most of the time, and then 10% of the time results in more medical bills and more unpleasantness.

In response to Yancey, I’d say that health care benefits are like getting free bus passes, with the high deductible plans requiring you to pay $1 a trip on only crowded bus, and the typical employer plan giving free rides any time of day. The Ferrari is only when you get run over by one.

Brandon Berg December 28, 2009 at 4:58 am

How did you miss the Hasonian explanation? Going with the low-cost provider signals that you don’t really care about your (or worse, your family’s) health. Or a somewhat less cynical explanation also involving signalling: People assume that price signals quality. Do you really want to entrust your health to the low-cost provider?

I don’t have enough to data to endorse any particular explanation; I’m just putting them on the table.

Wesey December 28, 2009 at 2:46 pm

What about the effects of insurance regulation?

Betty December 28, 2009 at 6:34 pm

Very interesting article and comments. As a health care consumer, I am insulated from the real cost of health care due to my insurance company. If the costs effected my pocketbook directly, I would be reviewing all the data. I’ve been learning how CDHP(consumer driven health plans) can engage, educate and empower consumers to make informed, responsible, and cost-conscious decisions about their lifestyle and health care spending. This is turn helps drive down health care spending. There is an excellent book on CDHP called “Bend the Health Care Trend” by Mark S. Gaunya and Jennifer A. Borislow. I believe this is the future of health care.

ChristineWithRegence December 31, 2009 at 1:59 pm

This fun video makes you wonder why our health care system is set up the way it is:
http://www.whatstherealcost.org/45secondstoshare

HONEST FRAUD August 22, 2010 at 8:33 am

FEDERAL JUDGE SAYS IF THEY DID NOT PROMISE OR SIGN ANYTHING, KICKBACKS ARE OK??? WHICH IS NOT TRUE BY THE WAY.

Turning next to relators’ claims based on alleged violations of the Anti-Kickback Statute, the court concluded relators failed to allege “that United Health certified compliance with the Anti-Kickback Act, nor did they allege that such compliance was relevant to the Government’s funding decisions.† The court then declined to exercise supplemental jurisdiction over relators’ state law claims and refused to grant relators leave to amend.

MEDICARE FRAUD, MEDICADE FRAUD, AND KICKBACKS AND BRIBES BUSINESS AS USUAL,INSIDER INFORMATION GIVEN. 9B BS ONE THING BUT WHAT ABOUT YOUR “HANDS OFF POLICY” BY THE DOJ AND CMS AND HHS, AND WHY NO INVESTAGATIONS OR AUDITS TO CONFIRM OR HELP? “SELF DISCLOSURE BY CARRIER ANOTHER JOKE”.

WHAT ABOUT “TAXPAYERS TO PREVENT AND STOP AND PREVENT FRAUD FOR MEDICARE AND MEDICADE” WHAT ABOUT WILLIS AND WILKINS BEING FIRED FOR NOT WANTING TO BREAK THE HEALTH FRAUD LAWS?

NJ CEPA CLAIM NOW ON FILE…..FALSE CLAIM UNDER APPEAL AND FILED….. WHERE WAS ANY HELP FROM THESE DEPARTMENTS?

The U.S. District Court for the District of New Jersey dismissed May 13 a qui tam action alleging violations of the False Claims Act (FCA) by United Health Group and its subsidiaries. According to the court, the complaint failed to state a claim upon which relief could be granted under the FCA. Relator Charles Wilkins began employment with United Health Group and its subsidiary AmeriChoice in October 2007 as a sales representative. Relator Darryl Willis began employment with United Health Group and AmeriChoice in 2007 as the general manager for Medicare/Medicaid marketing and sales.

In their qui tam complaint, relators allege 11 violations of Medicare and Medicaid regulations. The United States declined to intervene in the case and the relators filed an amended complaint that stated one federal count—violation of 31 U.S.C. § 3729(a)(1)-(3)—and nine state law counts. United Health moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing relators failed to plead the elements of a “false certification” claim, they failed to plead any anti-kickback violations, and failed to adequately plead a conspiracy. Relators alleged that because United Health entered into a contract expressly certifying that it agreed with all “terms and conditions of payment,” they made a false claim when they submitted claims despite any one of the 11 purported regulatory violations alleged in the amended complaint. Rejecting relators’ express false certification claim, the court found “[not once in the Amended Complaint have Relators identified even a single claim for payment to the Government.†The court also held relators’ implied false certification claim failed. According to the court, relators argued that because United Health agreed to comply with all CMS regulations when it contracted to become a prescription drug plan sponsor, and because at times it was in violation of some regulations, it therefore committed fraud each time it submitted a claim for payment. The court found such a theory of liability overly broad. “If Relators' theory were correct, the FCA would become a federal tort fountain, flowing claims for every trivial violation of Medicare/Medicaid regulations,† the court said. Relators next argued that under the recently enacted Fraud Enforcement and Recovery Act of 2009 (FERA) a relator need only show whether compliance with regulations would have a tendency to influence the government's payment decision. While that argument is true, the court reasoned, “Relators must still show a claim . . . and [t]hey have not done so.† Turning next to relators’ claims based on alleged violations of the Anti-Kickback Statute, the court concluded relators failed to allege “that United Health certified compliance with the Anti-Kickback Act, nor did they allege that such compliance was relevant to the Government’s funding decisions.† The court then declined to exercise supplemental jurisdiction over relators’ state law claims and refused to grant relators leave to amend.

United States ex rel. Wilkins v. United Health Grp. Inc., No. 08-3425 (D.N.J. May 13, 2010).

FCA claim alleging aggressive marketing tactics by health plan provider dismissed
Publication: Health Law Week
Date: Friday, June 4 2010

The U.S. District Court for the District of New Jersey dismissed a qui tam action brought by two former employees of healthcare plan providers alleging violations of the False Claims Act (FCA) arising from excessively aggressive marketing methods. United Health Group Inc., a provider of access to healthcare services, had as its subsidiaries AmeriChoice and AmeriChoice of New Jersey, which each offered Medicare Advantage plans. Charles Wilkins and Darryl Willis (the relators), who were each employed by United Health Group and AmeriChoice, initiated a qui tam claim against United and its two subsidiaries under the FCA alleging numerous violations of Medicare and Medicaid regulations governing administration of the Medicare Advantage plans. The complaint alleged that the defendants engaged in unauthorized and aggressive sales methods in marketing the plans — including the provision of illegal cash payments to providers to induce them to change beneficiaries to AmeriChoice and the provision of illegal kickbacks to doctors for obtaining the names of patients they could call and approach. The defendants moved to dismiss.

The district court concluded that the complaint failed to identify a single instance in which the defendants submitted a false claim to the government for payment as required to prosecute a qui tam claim as relators under the FCA. Under applicable federal appellate court precedent, the absence of such an allegation was fatal to the relator’s false certification claim. The relators’ theory of liability at base was that because United Health agreed that it would comply with all Centers for Medicare and Medicaid Services regulations, and because it was at times in violation of some regulations, it committed fraud each time it submitted a claim for payment. The district court concluded that this contention confused the conditions of participation in a Medicare or Medicaid program with the conditions of payment, and would open the door to a flood of tort claims of a type not contemplated by the FCA. Moreover, the complaint failed to allege that the violation of any regulation was actually relevant to any funding decision. As a result, the complaint failed to state a claim on which relief could be granted and, accordingly, the defendants’ motion to dismiss was granted.

Source: Health Law Week, 06/04/2010

Copyright © 2010 by Strafford Publications, Inc. http://www.straffordpub.com / All rights reserved. Storage, reproduction or transmission by any means is prohibited except pursuant to a valid license agreement.

HONEST FRAUD August 22, 2010 at 8:36 am

Honest Fraud wrote:
Honest Kickbacks Honest Bribes

Judical decision, It’s true there is email thanking AmeriChoice health for their $25,000 gift and requesting a larger amout for the pending year etc. from Community Health Center located in Bridgeton N.J. etc. It’s true a licensed Health Agent was fired for his refusal to deliver these checks. It’s true this behavior violates all the laws concerning bribes, kickbacks,fraud and Stark laws.

What is Bribery Any Way? a form of corruption,is an act implying money or gift given that alters the behavior of the recipient. It’s also true that the various Government agencies were notified of these frauds as well as a FCA case being filed.

It’s true this taint’s all the business then received from Community health center to AmeriChoice Health Company and then submitted to Mediciad and should be then held accountable and subject to all the violations of the health laws involved.

Are Kickbacks becoming a normal way of doing business ?

It’s true that relators argued that because United Health agreed to comply with all those trivial regulations when it contracted to become a prescription drug plan sponsor,as well as sign a formal contract of compliance.

The court found such a theory of liability overly broad. “If Relators’ theory were correct,the FCA would become a federal tort fountain, flowing claims for every trivial violation of Medicare/Medicaid regulations,†the court said. Relators next argued that under the recently enacted Fraud Enforcement and Recovery Act of 2009 (FERA) a relator need only show whether compliance with regulations would have a tendency to influence the government’s payment decision. While that argument is true, the court reasoned, “Relators must still show a claim . . . and they have not done so.†Turning next to relators’claims based on alleged violations of the Anti-Kickback Statute, the court concluded relators failed to allege “that United Health certified compliance with the Anti-Kickback Act, nor did they allege that such compliance was relevant to the Government’s funding decisions.† The court then declined to exercise supplemental jurisdiction over relators’state law claims and refused to grant relators leave to amend.

It’s true many additional laws were broken and proof furnished but no copy of checks to suppot the bribes only the unapproved forms and email etc.

I think the Federal courts have already decided that not only is Honest Fraud OK but Honest Bribes as well as Honest Kicbacks are OK. It’s amazing a Federal Judge thinks bribes and kickbacks and fraud are to trivial for the court system to waist their time on. What should courts spend their time on and since when do you have to certify compliance for non-violation of any Federal And State Kickback laws??

History Buff August 30, 2010 at 7:37 am

By Wayne Barrett Tuesday, Jul 3 2001

Most of Bill Thompson’s “financial consulting” clients are not revealed on his Board of Ed disclosure forms. The most disturbing one that Thompson did list, however, was Managed Healthcare Systems Inc., where he earned a total of $65,000 in 1997 and 1998, according to his tax returns. A black-owned HMO whose principals worked at the highest levels of the Reagan administration, the company is shrouded in scandal.

Last year, New York Attorney General Eliot Spitzer forced the MHS, which specializes in recruiting Medicaid recipients for its HMO, to repay the state $2 million for Medicaid services that patients never received. Spitzer also put Jean Moise Millien, the director of an MHS clinic, in jail for up to three years after he pled guilty to stealing $275,000 from Medicaid. Spitzer’s press release revealed that MHS knew for years that Millien’s clinic, Stuyvesant Heights Medical Group, was largely run by “unsupervised physician’s assistants and nurse practitioners” and that patients “were consistently complaining that they were having difficulty getting services.”

Yet, said Spitzer, the company “failed to take corrective action or properly oversee its subcontractor.” MHS portrayed itself as “a victim” of the clinic when they settled with Spitzer.

The State Health Department also revoked Millien’s physician’s assistant license in November 2000, finding that he’d run the clinic since 1991—four years before the MHS contract began—without on-site supervision by a licensed M.D. The Department also found that the clinic corporation had been dissolved by state officials for tax delinquency reasons in 1994 and that Millien had a prior criminal record. Spitzer said a doctor from Pennsylvania came to the clinic once a week “to sign charts” for a while, but “eventually stopped coming altogether.”

An MHS affiliate left a similar trail of complaints in Pennsylvania—where it became the subject of Philadelphia Inquirerexposés in 1996 and 1997, before and during Thompson’s employment. According to one study, it was three times as likely to refuse to pay for days of hospital care as the state’s next most stingy HMO. The “focus of six special state and federal audits” and a onetime target of a Pennsylvania grand jury, according to the Inquirer,the company took a reported $119 million in profits and executive bonuses from its Pennsylvania Medicaid work alone in the early ’90s, making it the “most profitable HMO” in the state.

Anthony Welters, the principal owner of AmeriChoice, the Virginia-based parent of MHS, was a top Reagan transportation official, gave $20,000 to Pennsylvania GOP governor Tom Ridge, and has given over $56,000 in recent years to Republican candidates and committees across the country. Clarence Thomas is the godfather of one of his children. Thelma Duggin, another top executive, worked in the Reagan White House and at the Republican National Committee under Lee Atwater, the engineer of the Willie Horton campaign.

Thompson said he’d known Welters and Duggin since 1992, when they started trying to do business in Brooklyn, and that he “bumped into Tony” in 1997 and Welters offered him a consulting job that started that June. Charged with “reaching out and helping them obtain business,” Thompson said he “spoke to community organizations.” Though he says he “never visited an MHS clinic”—including the Stuyvesant Heights one near his home—he insists that MHS is “a good company.” While Thompson’s tax returns indicate that AmeriChoice paid him $35,000 in 1998, his disclosure forms report no income from the company.

Thompson is quick to point out that he wasn’t the only prominent Brooklyn Democrat to wind up on the MHS payroll. Assemblyman Al Vann was hired, as was DeCosta Headley, a Democratic district leader, Ed Miller, a campaign aide of Congressman Ed Towns, and Chris Owens, the son of Congressman Major Owens. “I don’t think Al and Chris are getting involved in anything that’s not 100 percent benefit to the community,” said Thompson, apparently oblivious to the higher standard demanded of a candidate for so powerful a citywide post as comptroller.

APPLY THE LAW September 4, 2010 at 10:15 am

Special Treatment? This company was already found guilty of FCA violations before and now there back for more. Remove them from the Medicare and Medicaid programs now. Why are the Judges not doing the job they were hired for? Forget about the FCA and go after them for the inducement crooks they are.The Health Industry would be better off without this company. Federal Register: December 19, 1994 What Is the Medicare and Medicaid Anti-Kickback Law?

Among its provisions, the anti-kickback statute penalizes anyone who knowingly and willfully solicits, receives, offers or pays remuneration in cash or in kind to induce, or in return for: A. Referring an individual to a person for the furnishing, or arranging for the furnishing, of any item or service payable under the Medicare or Medicaid program; or B. Purchasing, leasing or ordering , or arranging for or recommending purchasing, leasing or ordering, any goods, facility, service or item payable under the Medicare or Medicaid program. Violators are subject to criminal penalties, or exclusion from participation in the Medicare and Medicaid rograms, or both. A violation of the anti-kickback law is a felony offense that carries criminal fines of up to $25,000 per violation, imprisonment for up to five years and exclusion from government health care programs.

The federal anti-kickback statute, 42 U.S.C. § 1320a-7b(b), prohibits individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid or any other federally funded program.

Maybe It's Time September 6, 2010 at 10:58 am

If this were any one person they would be in jail now, if the FBI were called in on this matter they would be in jail now, if the IRS were notified they would be in jail now. Since all Ameri-Choice checks come from the United Health’s home office they should be held equally responsible for any bribes, kickbacks, Stark, Fraud and inducements violations that have occured. Federal and State Governments have developed a depended position with this company that laws and rules no longer apply for them in their everyday business. .This role is nothing new for the AmeriChoice and its been going on for years, look at some of the prior news articles that date back for years only now they can afford to hire the best of Law firms and give the most for Political contributations all on the back of the taxpayer.The Laws have become tighter for sure but they can still dance away their problems.

Fraud September 8, 2010 at 12:44 pm

The King of Inducements AmeriChoice Health, also as a former employee of AmeriChoice Health Newark New Jersey, those who were signed up with AmeriChoice Personal Care Plus received as one of their benefits offered and approved by CMS was the “Personal Medical Emergency Response System” Let me explain this benefit, if you fall, or take a heart attack,etc. with the push of a button who can summon help for your situtation.This is a great benefit for those in need as many older citizens are burden with their health issues and concerns. The cost to them is zero, If purchased on their own very expensive.

The problem occurs when writing one up to come on board with AmerIChoice Health a second application is written for this above benefit even though they have not been accepted into the AmeriChoice health plan. It sounds to be a minor issue buts its not, you see this benefit and its application for this benefit are completed at the very same time the application is written for AmeriChoice Health. Now , remember your dealing with older Americans and their mind is on the “Response Emergency System etc. and you have used….. this benefit….. as a formal inducement…and even took an application on it so as to have them change.

This is against all the Inducement rules regulations and laws.This matter was brought to everyone’s attention both inside and outside of AmeriChoice yet, is was as all else ignored. The refusal by the company to conform and not take an application for this benefit till they were approved with AmeriChoice started to set the mood ongoing for many terminations, and yes I was fired. This was only one of dozens of rules laws and or violations that were brought to their attention as well as the federal agency’s outside their Home Office In Newark and ignored.

Here are few things that were told to me, don’t rock the boat, nobody cares, Take you pay check and keep your mouth shut, will have you report early everyday in Newark before you day starts and or you will have report late at night until you understand your position with the company, we will delay or not approve expenses and on and on etc. I was even told by a person who worked at CMS I would be the one in trouble for making these violations a big deal …. The problem was as a licensed agent it violated all the laws rules and regulations that controlled my license and any sales effort including the use of their illegal forms being used. A Federal Judge reviewed these issues as well as others and thought them trivial, I was very sorry to hear this since it cost me as well as others, our jobs.

If the Inducement laws are not going to be enforced why do you need licensed agents to market the products? Thousands of tainted sales being made and yes its true nobody cares.

FIRED September 14, 2010 at 7:57 pm

THE DIFFERENCE in the law of the land AS APPLIED.

The difference in the law as applied to a “person vs a corporation” on one hand the corporation, has a formal contract signed with the government not to break the health laws, rules and regulations, so any violations that occur now become trivial, as well as evidence recovery denied, jury trial denied, and of course any claims submitted to the government really don’t exist. The person a doctor not a corporation, jury trial allowed, evidence gatherning allowed, of course no formal contract signed with the government his mistakes are real. The very same laws ,rules and regualtions in place apply to both but this means that any person is now screwed and must go to jail. There are a lot of lessons to learn from this unfortunately don’t violate the law is not one of them. It’s true that relators argued that because United Health agreed to comply with all those trivial regulations when it contracted to become a prescription drug plan sponsor,as well as sign a formal contract of compliance. The court found such a theory of liability overly broad. “If Relators’ theory were correct,the FCA would become a federal tort fountain, flowing claims for every trivial violation of Medicare/Medicaid regulations,†the court said. Relators next argued that under the recently enacted Fraud Enforcement and Recovery Act of 2009 (FERA) a relator need only show whether compliance with regulations would have a tendency to influence the government’s payment decision. While that argument is true, the court reasoned, “Relators must still show a claim . . . and they have not done so.†Turning next to relators’claims based on alleged violations of the Anti-Kickback Statute, the court concluded relators failed to allege “that United Health certified compliance with the Anti-Kickback Act, nor did they allege that such compliance was relevant to the Government’s funding decisions.† The court then declined to exercise supplemental jurisdiction over relators’state law claims and refused to grant relators leave to amend.

Case1

Fifth Circuit Ruling Affirms that Psychologists are Not immune from Fraud and Abuse Scrutiny September 6, 2010 Posted In: Compliance , Stark and Anti-Kickback By The Health Law Partners on September 6, 2010 9:13 AM | Permalink Dr. Sam Smith Hill, III’s 2008 healthcare fraud conviction was affirmed by the 5th Circuit on August 25, 2010 (US v. Hill, No. 09-40749 (5th Cir. Aug. 25, 2010). Found guilty in five counts of healthcare fraud by a jury, Dr. Hill’s indictment alleged that he fraudulently billed Medicaid from 2001 to 2008. Having founded a children’s behavioral clinic in Corpus Christi, Texas that provides psychological services to underprivileged children, the indictment contended that Dr. Hill billed Medicaid for services performed by his Licensed Psychological Associates (LPAs). The Texas Medicaid guidelines prohibit billing Medicaid for services not rendered by a physician. Dr. Hill asserted that he only billed for the work he performed; however, the 5th Circuit disagreed, citing Dr. Hill’s statements to FBI agents claiming “that he knew he was violating Medicaid billing rules, but that the rules were ‘wrong and immoral.’” The court, thus, found there to be “sufficient evidence from which the jury could conclude that the billing included the LPA time,” affirming the lower court’s conviction. While not given as much attention as other fraud and abuse violations, even mental health professionals must be aware of increased fraud and abuse scrutiny.

For more information, please contact Abby Pendleton, Esq. or Robert S. Iwrey, Esq. at (248) 996-8510, or visit the Fraud and Abuse specialty page, the Compliance specialty page, or the HLP website.

Case2

FCA claim alleging aggressive marketing tactics by health plan provider dismissed
Publication: Health Law Week
Date: Friday, June 4 2010

The U.S. District Court for the District of New Jersey dismissed a qui tam action brought by two former employees of healthcare plan providers alleging violations of the False Claims Act (FCA) arising from excessively aggressive marketing methods. United Health Group Inc., a provider of access to healthcare services, had as its subsidiaries AmeriChoice and AmeriChoice of New Jersey, which each offered Medicare Advantage plans. Charles Wilkins and Darryl Willis (the relators), who were each employed by United Health Group and AmeriChoice, initiated a qui tam claim against United and its two subsidiaries under the FCA alleging numerous violations of Medicare and Medicaid regulations governing administration of the Medicare Advantage plans. The complaint alleged that the defendants engaged in unauthorized and aggressive sales methods in marketing the plans — including the provision of illegal cash payments to providers to induce them to change beneficiaries to AmeriChoice and the provision of illegal kickbacks to doctors for obtaining the names of patients they could call and approach. The defendants moved to dismiss. The district court concluded that the complaint failed to identify a single instance in which the defendants submitted a false claim to the government for payment as required to prosecute a qui tam claim as relators under the FCA. Under applicable federal appellate court precedent, the absence of such an allegation was fatal to the relator’s false certification claim. The relators’ theory of liability at base was that because United Health agreed that it would comply with all Centers for Medicare and Medicaid Services regulations, and because it was at times in violation of some regulations, it committed fraud each time it submitted a claim for payment. The district court concluded that this contention confused the conditions of participation in a Medicare or Medicaid program with the conditions of payment, and would open the door to a flood of tort claims of a type not contemplated by the FCA. Moreover, the complaint failed to allege that the violation of any regulation was actually relevant to any funding decision. As a result, the complaint failed to state a claim on which relief could be granted and, accordingly, the defendants’ motion to dismiss was granted.

Source: Health Law Week, 06/04/2010

Copyright © 2010 by Strafford Publications, Inc. http://www.straffordpub.com / All rights reserved. Storage, reproduction or transmission by any means is prohibited except pursuant to a valid license agreement. ”

SimplyBlue March 4, 2011 at 9:19 am

The FDA tries to its job, but sometimes it can prove to be very difficult to spot such mistakes if they are very rare or simply can’t be detected under normal clinical trials. It’s like asking a person the follows treatment in the California alcohol rehab to tell you if she/he will drink alcohol again after being treated. Some people do that, some don’t. impossible to detect.

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