The Effect of the Affordable Care Act Upon the Federal Anti-Kickback Statute

According to the Department of Health and Human Services, the federal anti-kickback statute serves one purpose: to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions. As we have reported in the past, this law has proven vital in the prosecution of several unscrupulous healthcare facilities, particularly Ohio-based Omnicare, Inc., and often goes hand-in-hand with violations of the federal False Claims Act.

ACA

The ACA, which created the Marketplace, does not implement the protections of the AKS in its provisions, leaving American taxpayers vulnerable to fraud. Image courtesy of www.under30ceo.com.

While the combination of the FCA and anti-kickback statute have proven wildly successful in the fight against healthcare fraud, the impact of the ACA upon the AKS has gone largely unreported, which is alarming considering the, perhaps unintentional, dissociation between the new healthcare law and the proven protector of public healthcare funds.

In a letter between HHS Secretary Kathleen Sebelius and Representative Jim McDermott (D-Wash.), it has been revealed that qualified Marketplace insurance plans are not considered “federal insurance plans” as defined further below and are therefore not within the purview of the AKS and its dedication to eliminating fraudulent misspending of taxpayer dollars.

Highlights of HHS Letter

 There are two background terms with which one must be familiar in order to better understand the impact of this detachment. The first is the notion of a “qualified health plan,” which is a fairly recent term used primarily in conjunction with the ACA. According to the now-accessible healthcare.gov, the term is defined as “an insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. A qualified health plan will have a certification by each Marketplace in which it is sold.”

Second, the term “federal health plan” is one which arose in Section 1128(b) of the Social Security Act as it pertains to healthcare fraud. The term encompasses any federal or state plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government or a state government. This definition applies to those insurance plans that are protected from fraud and present a risk of liability for any healthcare provider found to be engaging in fraudulent kickback schemes.

Sebelius

HHS director Sebelius has come under fire for recent problems with the ACA and its implementation of the Marketplace through healthcare.gov. As such, her letter, which was made public earlier this month, has received little attention. Image courtesy of www.wikipedia.com

Alas, in response to an inquiry by Representative McDermott, HHS responded by stating that it does not consider qualified health plans or any other programs created pursuant to the federally-facilitated Marketplace to be a “federal health plan” for purposes of the AKS. Despite the apparent non-applicability of the AKS, HHS assures Representative McDermott that it is taking “strong measures to protect consumers and ensure robust oversight” of those healthcare plans available on the Marketplace. HHS also insists it has jurisdiction to investigate and audit suspicious programs. In addition, it asserts that the FCA still applies in any Marketplace transaction wherein federal funds are involved.

 What does this mean for whistleblowers?

HHS is clear, the FCA will still apply in any transaction, even if through the Marketplace, that involves federal funding. Therefore, even if the $50,000 per violation protections of the AKS do not apply, you are still encouraged to report suspicious acts or billing practices to a whistleblower attorney as soon as possible. As well, the entire Marketplace concept is so new, the applicability of other intersecting federal and state statutes remains to be interpreted by federal and state courts. For now, remember to immediately report instances of suspected fraudulent activity, and let your whistleblower attorney work out the details of the applicability of federal and state statute.

By | 2018-03-26T10:57:32+00:00 November 28th, 2013|False Claims Act Legal News, Healthcare Fraud|