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Lots Hidden in the ACA (Obamacare) Regulation…

From the American Bar Association—another perspective on some aspects of the ACA (Obamacare) of which I was certainly unaware.


The below newsletter was sent to me via a friend – it shocked me.

I get there is need for oversight when Uncle Sam is handing out taxpayer money and when there are many people gaming the system – effectively stealing $$ and care from those who need it….  But…

With the amount of new regulations, changing rules, and  increasing penalties a small-time medical practice has to spend a lot of time and money just to not get in trouble with the government.    These new regulations might be good for the bean-counters but it will be forcing many small practices out of business.

I would criticize this as being anti-job creation, but with an additional $350 million tax dollars being assigned to hire fraud investigators I suppose the administration thinks this is a wash.   Geesh.

Already the legal climate of suing-for-malpractice-as-a-lottery-game causes doctors to think about patients as potential plantiffs –   Now increasing regulations cause doctors to have to think of patients as a regulatory burden and the cause of a potential out-of-nowhere fraud accusation.   What happened to doctors thinking of Patients as PATIENTS?    You know – the folks we took oaths to act in the best interest of ??

I practice medicine with a passion for finding underlying causes.  Unfortunately that style of practice does not fit in the name-the-disease, blame-the-disease, tame-the-disease  (or “script-em & street-em” if one will be a bit more crude) model the government bean-counters use for assessment.   I will not stand for being accused of fraud (and I never have been) when I am simply trying to do the best for my patients. IF you take government money you have to play by government rules. I do not believe any governmental agency can do a better job of caring for my patients than me.   For this reason I opted out of Medicare in 2007 and enjoy a relationship with my Medicare-aged patients that is now …well…  sacred.

Nobody between me and my patient.   Yea, I am a little possessive that way.     I serve them and they pay me.   If you could afford otherwise would you want a government-hired lawyer to defend you?   If you could afford otherwise would you want a government-contracted accountant to oversee your business?        Getting the government out of the middle of paying for healthcare is the only sure-fire way to get the government out of dictating what goes on in the exam room.   Some people don’t care about this – and that is fine – but I do.

Regulations on healthcare have far-reaching and practice-modifying implications for the kind of health care that is and will be available for you and your family.   Some are necessary, all are not bad, but all will change healthcare in several unforeseen ways.


Subject: Supreme Court Case Brief & Summaries: Enforcement Provisions of the Affordable Care Act;

Supreme Court Case Brief & Summaries A Service from the ABA Criminal Justice Section,

“Supreme Court ACA Ruling Leaves Intact Little-Known Enforcement Provisions?

By Dan Small, Holland & Knight

The avalanche of media over the Affordable Care Act (ACA), combined with the sheer volume of the bill, have managed to obscure several extraordinary enforcement provisions which, if on their own, would be earthshaking themselves.

Today’s Supreme Court opinion not only leaves the high profile issues intact, but essentially the whole of the Act’s 974 pages. Lawyers who represent healthcare executives and entities need to focus on what’s in the Act beyond the scope of the national debate. Here are some of the key points.

Lowered Intent Standard: The Act, at pp. 698 and 913, lowered the government’s burden of proof for most healthcare fraud cases. Before, a defendant had to act “knowingly and willfully.” But the Act provides that, “a person need not have actual knowledge of this section or specific intent to commit a violation” of the Anti-Kickback Statute (AKS)( § 6402). This directly overrules decisions in a variety of courts requiring intent for an AKS conviction. For example, the Ninth Circuit, in Hanlester Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995), held that, to convict under the AKS, the government must prove beyond a reasonable doubt that the defendants, “(1) know that [the AKS] prohibits offering or paying remuneration to induce referrals, and (2) engage in prohibited conduct with the specific intent to disobey the law.”

Combine this with the so-called “One Purpose” rule that the OIG has been focused on, based largely on United States v. Greber, 760 F.2d 68 (3d Cir. 1985), and the impact may be significant. In combination, one could argue – for example – that if a healthcare executive approves a normal and legitimate payment to a third party for services rendered, but “one purpose” of that payment may be to encourage the person to use the company’s products, that may be a criminal kickback, even if the executive did not understand or intend that to be a violation. Then put this together with one of the Act’s other provisions, that increases the Sentencing Guidelines by 20-50% for a wide range of healthcare crimes (p. 912, §10606).

Increased Investigations: The HHS Secretary must expand and enhance data matching agreements among Federal agencies, making it easier for Federal agencies to share data and identify suspects. These expanded powers are matched by expanded funding. The Act dedicates $350 million over the next ten years to combat fraud and abuse, including the hiring of additional federal investigators and agents (§ 6402).

Required Compliance Programs: The Act requires all healthcare providers and suppliers to adopt compliance programs as a condition of participation in Medicare and Medicaid, thus strengthening the program requirements for providers, suppliers and contractors (§ 6401 ). The OIG will establish the “Core Elements” of these compliance programs, but it’s a fair bet that they will be based, at least in broad brush, on the Federal Sentencing Guidelines’ “Minimum Requirements”. The time to get moving on this, for those not already engaged in the process, is now.

More Self-Reporting: The physician self-referral statute (or Stark law), prohibits a physician from making referrals for certain health services payable by Medicare, to an entity with which he or she has a financial relationship (ownership, investment, or compensation). Section 6409(a) of the ACA directed HHS to develop and implement the Medicare Self-Referral Disclosure Protocol (SRDP), to facilitate self-reporting where someone believes there is an actual or potential violation. Section 6409(b) allows HHS to reduce the penalty for self-reported violations. Previously, there was no centralized procedure to voluntarily disclose a violation.

Turning Overpayments Into False Claims: Section 1128J(d)(1) of the Act requires anyone who has received a Medicare/Medicaid overpayment to report and return it, and to notify the government of the reason for the overpayment. The Act (1128J(d)(2)) generally requires that an overpayment be reported and returned within 60 days. Any overpayment retained after the deadline is an obligation for purposes of the False Claims Act (1128J(d)(3)). This means that simple errors in a cost report could subject a provider to False Claims Act liability, if the overpayment is not returned to the government in time. CMS also applies the False Claims Act definition of knowledge to overpayments, so that a provider cannot avoid having actual knowledge if they act in reckless disregard or deliberate ignorance of the overpayment.

While the publicity and conversation has swirled around the broader reform provisions of the Act, what remains after the Supreme Court’s decision are still dramatic changes in the healthcare enforcement world.


Dan Small is a litigation partner in Holland & Knight’s Boston and Miami offices, a former federal prosecutor, and the former General Counsel of a national healthcare company. He is a frequent legal speaker and commentator, and the author of several ABA books on litigation, including Preparing Witnesses (3d Edition, 2009). The views expressed herein represent the opinions of the authors and editors, and have not been approved by the House of Delegates or the Board of Governors of the American Bar Association. Accordingly, these views should not be construed as representing the policy of the American Bar Association unless adopted pursuant to its Bylaws.

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