December 28, 2019
The Association of American Physicians & Surgeons (“AAPS”) is a non-profit membership organization of physicians and surgeons who are mostly in small, independent practices. Founded in 1943 (and celebrating our 75th year), AAPS defends and promotes the practice of private, ethical medicine. AAPS has members in virtually every specialty and State, and AAPS speaks out frequently about issues concerning patients and medical practice.
Thank you for the opportunity to submit comments on proposed modifications and additions to safe harbors to the anti-kickback statute (AKS) and exceptions to the beneficiary inducements civil monetary penalty (CMP) definition of “remuneration.”
OIG suggests that such modifications or additions might be needed “in order to foster arrangements that would promote care coordination and advance the delivery of value-based care.”
AAPS opposes the proposal for reasons that include the following:
It perpetuates underlying flaws in Medicare instead of working on reversing them
Kickbacks are anathema to healthy markets where consumers actively use their own funds to shop for items supplied by multiple sellers. In such cases kickbacks are naturally eliminated by market forces; no specific law against them (or corresponding safe harbors) is needed. Customers reward sellers offering the best value and shun those whose products cost more for less. Kickbacks drive up cost to consumers without any corresponding value and are thus squeezed out by competition. Unfortunately, Medicare is anything but a vibrant market for medical care.
Contrast a healthy market, like that for groceries or consumer electronics, where an abundance of companies compete for the dollars of shoppers, by offering a vast array of products and prices, with that of Medicare, where government is by and large the buyer of care and largely restricts the ability of physicians and facilities to compete on price and quality.
It is this divorcing of
patients from actively participating as consumers of medical care, along with
the prohibition on meaningful competition by suppliers of care, that are the
root causes of fraud, abuse, and overspending in the Medicare system. Until and unless these root causes are addressed,
fraud, abuse, inefficiency, and waste will
remain fixtures of Medicare, Medicaid, and all third-party dominated payment systems. Further top-down tinkering, including expansion of AKS safe harbors, will not make a meaningful difference and in fact could exacerbate wasteful spending, cost, and harm to beneficiaries.
Safe Harbors Have a History of Abuse
OIG need look no further than the abuse of the current AKS safe harbor at 42 CFR § 1001.952(j) as authorized by 42 U.S.C. § 1320a-7b(b)(3)(C). This safe harbor for Group Purchasing Organizations (GPOs) has unleashed an epidemic of harmful kickbacks in the medical supply chain, which has bled into the pharmaceutical supply chain through similar abuse by Pharmacy Benefits Managers. Physicians Against Drug Shortages estimates that improper kickbacks, facilitated by the GPO/PBM safe harbor to the AKS, increase costs by a shocking $200 billion per year, not to mention related shortages and formulary micromanagement that improperly interfere in patient prescribing decisions.
We appreciate past efforts at HHS and in the administration to end the availability of this safe harbor for PBMs, urge HHS to further investigate how it can also curb abuse by GPOs, and encourage Congress to do likewise. OIG should keep in mind this example of unintended consequences run amok as it moves forward with consideration of new safe harbors.
In fact, HHS and Congress should not stop at simply revoking the GPO/PBM safe harbor to the AKS but also work to address the inherent lack of transparency and dearth of consumer-driven market forces that perpetuate the possibility of continued gaming of the system to the detriment of patients and taxpayers. If patients do not know how much is being paid to whom for what — and are not incentivized to care — then the opportunity for fraud and abuse in the provision of their medical care will persist.
ACOs Lack Transparency and Incentivize Rationing Care
Unfortunately, the current implementations by CMS and other third party payers of “arrangements that would promote care coordination and advance the delivery of value-based care” are moving even further away from transparency, toward opaqueness and removing patients to a greater extent from participating in, or even understanding, how decisions about their own care — and related payments — are made. For instance, Medicare patients are placed in Accountable Care Organizations (ACOs) without being told either that they are a member of the ACO, or that the ACO can be paid more by Medicare for providing less care. There is apparently little to no transparency for these patients regarding how much the ACO is getting paid to care (or not care) for them. A recent related case-in-point: OIG investigations, as reported by The New York Times on October 13, 2018, discovered the harmful results of Medicare Advantage plan incentives to improperly deny services and payment for care. The OIG findings “highlight widespread and persistent MAO [Medicare Advantage Organization] performance problems related to denials of care and payment.” ACOs and other top-down “value-based” payment arrangements under consideration face similar incentives to ration care.
Bribing Patients Is Not Good Public Policy
Creating additional safe harbors that protect activity inherently not in the interest of patients is not good public policy. While we appreciate that OIG has put in place some limitations on cash incentives paid to induce patient participation in CMS-approved “value based” models, we must still object to the potential approval of a safe harbor for certain inducements (including cash in some circumstances) to push patients towards certain programs . Putting aside the fact that such inducements will likely drive patients away from independent physicians into the big-box and mega-system run practices who can afford the massive infrastructure needed to participate in CMS models, paying patients to participate in a scheme that does not put their interests first runs counter to basic medical ethics and shreds the time-tested patient-first principles outlined in the Oath of Hippocrates.
We are thankful for efforts HHS and the Administration are making to empower patients and the medical professionals who care for them, while reining in the power of outsiders to control either. However we fear this proposed rule signals a move further in the wrong direction by creating safe harbors for “coordination” of care, which would allow even more managed-care schemes to control the market and keep patients in network, instead of empowering them to find the best possible care. As OIG and others at HHS move forward, we urge that any new policy align with a key principle voiced by Secretary Azar: “value is best determined by markets and consumers, not arbitrary rules and central planners.”
Jane M. Orient, MD
Association of American Physicians and Surgeons