Trump considers relaxing health-care kickback rules
WASHINGTON — The Trump administration has labored zealously to cut federal regulations, but its latest move has still astonished some experts on health care: It has asked for recommendations to relax rules that prohibit kickbacks and other payments intended to influence care for people on Medicare or Medicaid.
The goal is to open pathways for doctors and hospitals to work together to improve care and save money. The challenge will be to accomplish that without also increasing the risk of fraud.
With its request for advice, the administration has touched off a lobbying frenzy. Health-care providers of all types are urging officials to waive or roll back the requirements of federal fraud and abuse laws so they can join forces and coordinate care, sharing cost reductions and profits in ways that would not otherwise be allowed.
From hundreds of letters sent to the government by health-care executives and lobbyists in the past few weeks, some themes emerge: Federal laws prevent insurers from rewarding Medicare patients who lose weight or take medicines as prescribed. And they create legal risks for any arrangement in which a hospital pays a bonus to doctors for cutting costs or achieving clinical goals.
The rules are aimed at preventing improper influence over choices of doctors, hospitals and prescription drugs for Medicare and Medicaid beneficiaries.
Federal health officials are reviewing the proposals for what they call a “regulatory sprint to coordinated care” even as the Justice Department and other law enforcement agencies crack down on health-care fraud.
“The administration is inviting companies in the health-care industry to write a ‘get out of jail free card’ for themselves, which they can use if they are investigated or prosecuted,” said James Pepper, a lawyer outside Philadelphia who has represented many whistleblowers in the industry.
Federal laws make it a crime to offer “remuneration” in return for the referral of Medicare or Medicaid patients, and they limit doctors’ ability to refer patients to medical businesses in which the doctors have a financial interest.
These laws “impose undue burdens on physicians and serve as obstacles to coordinated care,” said Dr. James Madara, CEO of the American Medical Association.
Hospitals often say they want to reward doctors who meet certain goals for improving the health of patients, reducing the length of hospital stays and preventing readmissions. But the premise of the kickback and selfreferral laws is that health-care providers should make medical decisions based on the needs of patients, not on the financial interests of doctors or other providers.
Health-care providers can be fined if they offer financial incentives to Medicare or Medicaid patients to use their services or products. Drug companies have been found to violate the law when they give kickbacks to pharmacies in return for recommending their drugs to patients.
Doctors, hospitals and drug companies are urging the Trump administration to provide broad legal protection for arrangements that promote coordinated, “valuebased care.”