More Aggressive Review of Hospital Mergers Needed, Says FTC Commissioner

https://www.healthleadersmedia.com/strategy/more-aggressive-review-hospital-mergers-needed-says-ftc-commissioner?spMailingID=15662786&spUserID=MTg2ODM1MDE3NTU1S0&spJobID=1641165714&spReportId=MTY0MTE2NTcxNAS2

The problems include ‘a legal shield’ enjoyed by nonprofit hospitals, and the solutions include more retrospective analysis of close calls, says Rebecca Kelly Slaughter.


KEY TAKEAWAYS

The FTC is prohibited from enforcing antitrust laws against nonprofits, which poses a challenge, Slaughter said.

The commission should conduct another round of retrospective study on closed healthcare mergers, she said.

Commissioners should be ‘as aggressive as possible’ moving forward to preserve healthcare competition, she added.

Federal Trade Commissioner Rebecca Kelly Slaughter told a liberal think tank Tuesday that antitrust regulators should take a more assertive approach to protect competitive forces among healthcare providers.

Slaughter, a Democrat appointed to the FTC by President Trump and confirmed last year, made the remarks in a speech at the Center for American Progress in Washington, D.C., where she took issue with what she described as “a legal shield for anticompetitive conduct” at nonprofit hospitals.

The FTC is allowed to review all hospital mergers, but it cannot enforce antitrust laws against nonprofits, including more than 45% of U.S. hospitals, she said.


“So, for example, if a non-profit hospital merger itself is not anticompetitive, but the newly merged entity engages in anticompetitive practices, the FTC is stuck on the sidelines,” Slaughter said in her prepared remarks.

“In effect, this means that all of the healthcare industry expertise that the FTC has worked for decades to, and continues to, develop cannot be deployed alongside the DOJ and state enforcers to stop anticompetitive practices by roughly half of all hospitals nationwide,” she added. “This is a significant lost opportunity.”

Slaughter called for greater scrutiny of horizontal and vertical mergers alike both in the future and in the past.

“I believe that the FTC should conduct a new round of retrospectives of healthcare provider mergers,” Slaughter said.

Studying the past has led the FTC to some of its biggest improvements in understanding market forces, as was the case with former Chairman Timothy J. Muris’ retrospective analysis of hospital mergers in the early 2000s, Slaughter said.

Moving forward, Slaughter said, the FTC should take another look at recently cleared “close-call hospital mergers” and those that were shielded from antitrust scrutiny by state laws despite posing significant concerns. This is consistent, she said, with a statement the FTC issued last fall when it decided not to challenge a proposed affiliation involving CareGroup Inc., Lahey Health System Inc., Seacoast Regional Health System, and others.

The FTC should also consider taking another look at vertical integration among healthcare providers, such as transactions involving hospitals and physician groups, she said.

“[W]e should be as aggressive as possible in challenging the mergers we encounter today, especially where the proposed consolidation involves new structural arrangements rather than traditional horizontal concerns,” Slaughter added. “It is important for parties considering mergers to know we will not shy away from challenging, for example, anticompetitive vertical organizations.”

“I am sensitive to the concern that we might lose litigation,” she added, “but our obligation is to identify the right outcome and fight for it.”

 

 

 

Dems tee up new document fight with DOJ over Obamacare

https://www.politico.com/story/2019/05/14/democrats-doj-obamacare-1318932

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House Democrats are mounting yet another confrontation with the Justice Department that could lead to subpoenas, but this time it’s not about special counsel Robert Mueller’s report — it’s about health care.

Five committee chairman foreshadowed a possible subpoena as soon as May 24 if Attorney General William Barr declines to provide documents related to his decision to stop defending the constitutionality of the Affordable Care Act — the health care law signed by President Barack Obama in 2010.

In letters to Barr and White House Counsel Pat Cipollone, the chairmen say they’ve been asking since April 8 for documents connected to the decision, as well as testimony from four key officials involved in the effort. The request, they said, sought a response by April 22 but that the reply fell short. Now, they’ve giving the Justice Department two more weeks to meet the committees’ demands. They’re also asking the White House to make budget director Russ Vought available for an interview.

“If we do not receive a response by this date, we will have no choice but to consider alternative means of obtaining compliance,” the lawmakers wrote.

The letters are signed by Oversight Chairman Elijah Cummings (D-Md.) , Energy and Commerce Chairman Frank Pallone, Jr. (D-N.J.), Ways and Means Chairman Richard Neal (D-Mass.), Education and Labor Chairman Bobby Scott (D-Va.) and Judiciary Chairman Jerry Nadler (D-N.Y.).

Nadler’s committee has already voted to hold Barr in contempt for refusing to provide an unredacted version of Mueller’s report to Congress as well as Mueller’s underlying evidence. But the full House has yet to consider the committee’s effort. Speaker Nancy Pelosi indicated last week that other committees may want to combine similar contempt proceedings into one overarching floor vote that could come in the next few weeks.

Democrats are also locked in confrontations with the Trump administration over accessing Trump’s tax returns — a request made by Neal’s Ways and Means Committee. The House Intelligence Committee has demanded access to Mueller’s report as well on national security grounds and issued a subpoena for his files last week.

The new effort on health care could become part of the broader strategy, if they continue to accuse the Justice Department of stonewalling by the time the new deadline arrives on May 24. But convincing other lawmakers to wait until June — following a weeklong Memorial Day recess — for a comprehensive contempt vote could be difficult. Rank-and-file Democrats have been clamoring for punitive measures against Barr for weeks for his handling of Mueller’s report.

Unlike the other demands, though, Democratic leaders, though, believe that picking a fight on health care is better politics — and it shows their efforts to confront the Trump administration has policy dimensions, not just Trump-focused investigations.

Democrats have attributed the Trump administration’s efforts to overturn the health care law, known familiarly as Obamacare, to “politically motivated forces” in the White House. The Obama White House took a similar step in 2011 when the Justice Department, at Obama’s urging, stopped defending the Defense of Marriage Act, which barred federal recognition of same-sex marriages — a move social conservatives denounced at the time.

The Department of Justice declined to comment.

 

 

 

Uninsurance of children, parents inched back up in 2017, report finds

https://www.healthcaredive.com/news/uninsurance-of-children-parents-inched-back-up-in-2017-report-finds/554590/

Dive Brief:

  • After improving for several years, insurance gains and participation in Medicaid and the Children’s Health Insurance Program tilted downward in 2017, a new Urban Institute report shows.
  • In the first three years following implementation of the Affordable Care Act, the uninsurance rate dropped from 7% to 4.3% among children and from 17.6% to 11% among parents, or about 40% for both groups. In 2017, however, the children’s uninsurance rate inched back up to 4.6%, or an additional 281,000 uninsured children, and parents’ coverage rate stalled.
  • Uninsurance rates rose both in states with and without the ACA’s Medicaid expansion, but the increase was more pronounced in states without expansion programs.

Dive Insight:

The findings jibe with recent data from the Centers for Disease Control’s National Health Interview Survey, which showed more than 1.1 million Americans lost health coverage in 2018, pushing the total number of uninsured from 29.3 million in 2017 to 30.4 million last year. Among surveyed adults between 18 and 64 years old, 13.3% were uninsured, 19.4% had public health coverage and 68.9% had private coverage.

The trend coincides with Trump administration efforts to weaken the ACA by eliminating several mechanisms meant to stabilize payers participating in ACA exchanges and pushing stripped-down, noncompliant health plans. The result has been rising premiums and a resurgence in the number of uninsured.

Adding to uncertainty about the ACA’s future is the U.S. Department of Justice’s support for a Texas federal district court that ruled the law unconstitutional without its individual mandate penalty, which a Republican-led Congress removed in 2017. A previous Urban Institute report estimated up to 20 million Americans would lose health insurance if the lawsuit prevails — a majority of whom are currently covered through Medicaid expansions and ACA exchanges.

While the ACA remains in legal jeopardy, Democrats and presidential candidates are looking at ways to increase the numbers of insured Americans, from shoring up the ACA to implementing some type of single-payer system or “Medicaid for All.”

According to the Urban Institute, participation in Medicaid/CHIP among children increased from 88.7% in 2013 to 93.7% in 2016, and from 67.6% to 79.9% for parents. Those gains reversed in 2017, however, with Medicaid/CHIP participation dropping to 93.1% among children and remaining unchanged for parents.

Among those who did not enroll in Medicaid/CHIP in 2017, 2 million children and 1.7 million parents were eligible for the programs — versus 1.9 million and a steady 1.7 million, respectively, in 2016.

More than half of the uninsured children and parents who were eligible for the Medicaid/CHIP lived in California, Florida, Georgia, Illinois, Indiana, New York, Pennsylvania and Texas, according to combined 2016-2017 data.

Parents were more than twice as likely to be uninsured as children in 2017. For example, children’s uninsurance rate was less than 5% in most states and under 10% in nearly every state, while parents’ uninsurance was less than 5% in just four states and over 10% in close to half the states, the report says.

The decline in improvement was worse among certain subgroups. “In 2017, the uninsurance rate was nearly 6% or higher among adolescents, Hispanic and American Indian/Alaska Native children, citizen children with noncitizen parents, and noncitizen children,” according to the report. “And consistent with prior years, one in six parents or more who were ages 19 5o 24, Hispanic or American Indian/Alaska Native, below 100 percent of FPL [federal poverty level], receiving SNAP [Supplemental Nutrition Assistance Program] benefits, or noncitizen were uninsured in 2017.”

 

 

 

 

 

 

CVS to Judge: Please Don’t Let Those 7 Witnesses Testify

https://www.healthleadersmedia.com/strategy/cvs-judge-please-dont-let-those-7-witnesses-testify

The pharmacy chain asked for a narrow hearing on its DOJ-approved purchase of Aetna, as seven witnesses prepare to testify against it.


KEY TAKEAWAYS

Both CVS and the DOJ argue the hearing should be narrowly tailored, with at least some witnesses excluded.

If allowed to proceed as proposed, the hearing could devolve into “a forum for airing competitors’ grievances,” CVS warned.

CVS Health asked the federal judge overseeing its acquisition of Aetna to prevent seven witnesses who lined up to testify against the megamerger from speaking at a hearing next month.

Although antitrust regulators with the U.S. Department of Justice greenlit the CVS-Aetna deal last fall, U.S. District Judge Richard Leon in Washington, D.C., made clear that his review should not be seen as a rubber stamp. Leon said he wanted to hear from witnesses before deciding whether to sign off on the DOJ-approved deal.

The seven witnesses put forward by three groups of amici curiae include health policy professors and economists from major universities, but CVS argued in a court filing Friday that Leon should decline altogether to hold a hearing with live witnesses. The planned testimony, as outlined in court filings, includes irrelevant arguments that could turn the hearing “into a forum for airing competitors’ grievances about the CVS-Aetna merger and about the healthcare industry more generally,” attorneys for CVS wrote.

The CVS filing argues that the three groups of amici—the AIDS Healthcare Foundation (AHF), the American Medical Association (AMA), and Consumer Action with the U.S. Public Interest Research Group (PIRG)—would be advancing their own competitive interests if the hearing were to proceed.

“Amici’s submissions demonstrate that such a hearing is unnecessary in light of the considerable record already before the Court,” attorneys for CVS wrote, “and Amici’s planned presentations, consisting almost exclusively of unreliable competitor testimony on issues that are not relevant to the Court’s Tunney Act determination, will add little, if anything, of value.”

In its own filing Monday, the DOJ argued that Leon should limit the testimony to only those items relevant to the scope of Tunney Act review. The DOJ asked the court to strike five of the seven witnesses entirely and limit of the scope of the testimony offered by the other two.

“These limitations will ensure that the hearing remains within the appropriate statutory and constitutional bounds, and will protect the Executive Branch’s constitutionally mandated control over its resource-allocation decisions in the enforcement of antitrust laws,” DOJ attorneys wrote.

 

 

 

Trump Administration Files Formal Request to Strike Down All of Obamacare

The Trump administration formally declared its opposition to the entire Affordable Care Act on Wednesday, arguing in a federal appeals court filing that the signature Obama-era legislation was unconstitutional and should be struck down.

Such a decision could end health insurance for some 21 million Americans and affect many millions more who benefit from the law’s protections for people with pre-existing medical conditions and required coverage for pregnancy, prescription drugs and mental health.

In filing the brief, the administration abandoned an earlier position — that some portions of the law, including the provision allowing states to expand their Medicaid programs, should stand. The switch, which the administration disclosed in late March, has confounded many people in Washington, even within the Republican Party, who came to realize that health insurance and a commitment to protecting the A.C.A. were among the main issues that propelled Democrats to a majority in the House of Representatives last fall.

The filing was made in a case challenging the law brought by Ken Paxton, the attorney general of Texas, and 17 other Republican-led states. In December, a federal judge from the Northern District of Texas, Reed O’Connor, ruled that the law was unconstitutional.

A group of 21 Democratic-led states, headed by California, immediately appealed, and the case is now before the Fifth Circuit Court of Appeals in New Orleans. The House of Representatives has joined the case as well to defend the law.

Democrats wasted no time responding to the filing Wednesday. Xavier Becerra, the attorney general of California, a Democrat, said: “The Trump administration chose to abandon ship in defending our national health care law and the hundreds of millions of Americans who depend on it for their medical care. Our legal coalition will vigorously defend the law and the Americans President Trump has abandoned.”

The government’s brief did not shed light on why it had altered its earlier position, referring only to “further consideration and review of the district court’s opinion.”

Oral arguments in the appeals court are expected in July, with a possible decision by the end of the year, as the 2020 presidential campaign gets going in earnest. Whichever side loses is expected to appeal to the Supreme Court.

The Justice Department’s request to expedite oral arguments, granted last month, suggests that the administration is eager for a final ruling. In its application, it said that “prompt resolution of this case will help reduce uncertainty in the health care sector, and other areas affected by the Affordable Care Act.”

Democrats, seizing on the health law’s popularity and its decisive role in their winning the House last fall, are already using the case as a cudgel against President Trump as his re-election campaign gets started. The law’s guarantee of coverage for people with pre-existing medical conditions, in particular, remains very popular with voters in both parties as well as independents.

But Mr. Trump has appeared undaunted, tweeting in April that “Republicans will always support Pre-Existing Conditions” and that a replacement plan “will be on full display during the Election as a much better & less expensive alternative to Obamacare.”

Instead of providing specifics, though, Mr. Trump, members of his administration and other Republicans have focused on attacking the Medicare for All plans that some Democratic presidential candidates have sponsored or endorsed as a dangerous far-left idea that would, as Mr. Trump tweeted, cause millions of Americans “to lose their beloved private health insurance.”

As the administration and Texas noted in their briefs, Judge O’Connor’s ruling turned on the law’s requirement that most people have health coverage or be subject to a tax penalty.

But in the 2017 tax legislation, Congress reduced that penalty to zero, effectively eliminating it. Judge O’Connor, the plaintiff states, and now the Trump administration reasoned that, like a house of cards, when the tax penalty fell, the so-called individual mandate became unconstitutional and unenforceable. Therefore, the entire law had to fall as well.

Mr. Paxton, the Texas attorney general, whose office also filed a brief on Wednesday, said: “Congress meant for the individual mandate to be the centerpiece of Obamacare. Without the constitutional justification for the centerpiece, the law must go down.”

Whether that position will survive judicial scrutiny is another question. Nicholas Bagley, who teaches health law at the University of Michigan Law School, noted that only two lawyers signed the brief. That is highly unusual in a case with such a high profile, he said.

“This is a testament to the outrageousness of the Justice Department position, that no reasonable argument could be made in the statute’s defense,” Mr. Bagley said. “It is a truly indefensible position. This is just partisan hardball.”

Many legal scholars have also said that even before appellate judges wade into the more obscure pools of legal reasoning, they could reach a decision by addressing the question of congressional intent. If Congress had meant the erasure of the tax penalty to wipe out the entire act, such an argument goes, it would have said so.

If the Fifth Circuit overturns the O’Connor decision, there is no guarantee that the Supreme Court would take an appeal. The court has ruled on two earlier A.C.A. challenges, finding in favor of the act, although narrowing it.

Of course, the composition of the Supreme Court has since changed.

 

 

 

Ex-MetroHealth COO sentenced to 15 years for defrauding hospital

https://www.beckershospitalreview.com/legal-regulatory-issues/ex-metrohealth-coo-sentenced-to-15-years-for-defrauding-hospital.html?origin=cfoe&utm_source=cfoe

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The former chief operating officer of Cleveland-based MetroHealth System was sentenced to more than 15 years in prison for his role in a conspiracy to defraud the health system through a series of bribes and kickbacks, according to the Department of Justice.

Five things to know:

1. The sentencing came after former COO Edward Hills, DDS, and three co-defendants — all dentists at MetroHealth — were found guilty of criminal charges in July 2018. The four men were indicted for the crimes in October 2016.

2. According to court documents presented by the Justice Department during the trial, Dr. Hills and two of his co-defendants engaged in a racketeering conspiracy from 2008 through 2016 that involved a series of bribes, witness tampering and other crimes.

3. Federal prosecutors alleged Dr. Hills solicited cash, checks and expensive gifts from the two co-defendants beginning in 2009, and in return took actions on their behalf allowing them to operate their individual private dental clinics during regular business hours while receiving full-time salaries from MetroHealth.

4. Dr. Hills, who also served as interim president and CEO of MetroHealth from December 2012 through July 2013, allowed the co-defendants to hire MetroHealth dental residents to work at their private clinics during regular business hours and did not require them to pay wages or salaries to residents. He allowed the three individuals and others to solicit bribes from prospective dental school residents, which amounted to at least $75,000 between 2008 and 2014.

5. Dr. Hills’ co-defendants are scheduled to be sentenced later this month.

 

 

FEDS INDICT 24 IN MASSIVE $1.2B TELEMARKETING, DME SCHEME

https://www.healthleadersmedia.com/feds-indict-24-massive-12b-telemarketing-dme-scheme

Collectively, the executives, business owners and medical professionals involved in the conspiracy are accused of causing more than $1 billion in losses for Medicare.


KEY TAKEAWAYS

Two dozen people were indicted in the multistate, international telemarketing and DME scheme, which allegedly occurred in 17 federal judicial districts.

The 130 DME companies submitted more than $1.7 billion in claims to Medicare, were paid more than $900 million, and accounted in total for more than $1 billion in losses for the federal government.

The swindled money was allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts and luxury real estate in the United States and abroad,

Federal prosecutors are calling it one of the largest healthcare fraud schemes they’ve ever investigated.

Criminal indictments were made public this week against 24 people, including CEOs, COOs, physicians, and other executives at five telemedicine companies, and the owners of 130 durable medical equipment companies across 17 federal judicial districts for their roles in various schemes to bilk Medicare out of $1.2 billion.

Prosecutors said the DME companies allegedly paid kickbacks and bribes in exchange for the referral of Medicare beneficiaries by physicians in cahoots with fraudulent telemedicine companies for unnecessary back, shoulder, wrist and knee braces.

Some of the defendants allegedly controlled an international telemarketing network that lured over hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America, prosecutors said.

The defendants allegedly paid doctors to prescribe DME either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen.

“The breadth of this nationwide conspiracy should be frightening to all who rely on some form of healthcare,” said Don Fort, Chief of Criminal Investigations at the Internal Revenue Service, one of six federal agencies involved in the probe.

“The conspiracy described in this indictment was not perpetrated by one individual.  Rather, it details broad corruption, massive amounts of greed, and systemic flaws in our healthcare system that were exploited by the defendants,” Fort said.

The 130 DME companies submitted more than $1.7 billion in claims to Medicare and were paid more than $900 million, and accounted in total for more than $1 billion in losses for the federal government.

The swindled money was allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts and luxury real estate in the United States and abroad, prosecutors said.

Court documents allege that some of the defendants lured patients for the scheme by using an international call center that advertised to Medicare beneficiaries and “up-sold” the beneficiaries to get them to accept numerous “free or low-cost” DME braces, regardless of medical necessity.

The international call center allegedly paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these Medicare beneficiaries. The telemedicine companies then allegedly paid physicians to write medically unnecessary DME orders. Finally, the international call center sold the DME orders that it obtained from the telemedicine companies to DME companies, which fraudulently billed Medicare.

DEFENDANTS IDENTIFIED

  • In New Jersey, Neal Williamsky 59, of Marlboro, and Nadia Levit, 39, of Englishtown, New Jersey, owners of 25 DME companies, were indicted for their alleged participation in a $150 million scheme.

    Albert Davydov, 26, of Rego Park, New York, was charged for his alleged participation in a $35 million DME scheme.

    Creaghan Harry, 51, of Highland Beach, Florida; Lester Stockett, 51, of Deefield Beach, Florida; and Elliot Loewenstern, 56, of Boca Raton, Florida; the owner, CEO and VP of marketing, respectively, of call centers and telemedicine companies were charged for their alleged participation in a $454 million kickback and money laundering scheme.

    Joseph DeCoroso, MD, 62, of Toms River, New Jersey, was charged in a $13 million conspiracy to commit healthcare fraud and separate charges of healthcare fraud for writing medically unnecessary orders for DME, often without speaking to patients, while working for two telemedicine companies.

  • In Florida, Willie McNeal, 42, of Spring Hill, the owner and CEO of two telemedicine companies, was charged for his alleged participation in a $250 million scheme to swap kickbacks and bribes for DME referrals.
  • In Dallas, Texas, Leah Hagen, 48, and Michael Hagen, 51, of Dalworthington Gardens, owners and operators of two DME companies, were charged for their alleged participation in a $17 million kickback scheme that generated unnecessary DME orders.
  • In El Paso, Texas, Christopher O’Hara, 54, of Kingsbury, the owner of a telemedicine company, was charged in an $40 million scheme to swap kickbacks and bribes for referrals to DME providers.
  • In Philadelphia, Randy Swackhammer, MD, 60, of Goldsboro, North Carolina, was charged for an alleged $5 million conspiracy to commit healthcare fraud. Swackhammer allegedly wrote medically unnecessary orders for DME while working for a telemedicine company, often with only brief conversations with patients.
  • In California, Darin Flashberg, 41, and Najib Jabbour, 47, both of Glendora, and owners of seven DME companies, were charged with alleged participation in a $34 million scheme that paid kickbacks and bribes in exchange for unnecessary DME orders.
  • In South Carolina, Andrew Chmiel, 43, of Mt. Pleasant, owner of over a dozen companies involved in the scheme, was charged in a $200 million scheme to pay kickbacks and bribes in exchange for unnecessary DME orders.

“THE BREADTH OF THIS NATIONWIDE CONSPIRACY SHOULD BE FRIGHTENING TO ALL WHO RELY ON SOME FORM OF HEALTHCARE. ”