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Post-PATH

In 1998, largely as a result of the PATH audit, the American Hospital Association (AHA) sent a letter of desperation and surrender to the Secretary of HHS and the OIG, in which, noting that almost 5000 hospitals were already under siege by federal law enforcement and investigative personnel, they pled for a temporary cease-fire on FCA-based whistleblower actions. The climate of accusation and allegation, the AHA said, was out of control. They prayed for a six-month moratorium on further actions under the FCA, and offered to use the time to initiate a joint effort with the government to institute voluntary compliance programs, and to establish clear criteria for distinguishing simple errors from genuine fraud.  They, in effect, were asking for relief from entrapment, and wanted to have the new rules clearly explained to them so they could avoid taking any actions that the feds could construe as fraud.

Now, when federal investigators had gone after the defense industry in the 1980s, largely using the same FCA powers, they first conducted a sufficient number of prosecutions to get the industry's attention, then squired the industry through the development of an adequate compliance program, then finally moved on to something else (many of these investigators moved on to healthcare, as a matter of fact).  In 1998, the feds had now reached that same point with the healthcare industry. They had rapidly gotten the attention of the alleged perpetrators of fraud, and these malefactors were now begging for the same variety of relief the defense industry had been given.

If the real motivation of the Wonkonians was to reduce fraud in healthcare, and not to establish a system where they could find as much fraud as they wanted to, they would have again declared victory at this juncture and "helped" the providers learn to become better citizens. In 1998, however, the response of the feds was a flat "no." In fact, the OIG responded by vociferously attacking the AHA's request, indignantly claiming that to accede to their wishes would cripple the government's anti-fraud initiatives.   

The AHA didn't give up.  They next lobbied Congress for relief, and found sympathetic members of the House of Representatives willing to sponsor a bill that would prevent HHS from abusing the provisions of the FCA. As a result, later that year the OIG suddenly reversed field and issued a set of "best practice guidelines" on implementation of FCA actions.

These guidelines do not have the force of law; they are just guidelines that HHS may or may not choose to follow.  But the guidelines achieved their purpose, which was to induce the House to drop their proposed bill that would have limited the power of HHS. Since that time, arguably, large-scale federal initiatives as egregiously abusive as the PATH audit have not occurred. The Wonkonians began laying low, however, too late to keep objective observers like you and me from seeing their real intentions. The underlying infrastructure and the regulations that permitted the PATH audit remain entirely intact, and can be picked up again when the time is right.

Criminalizing healthcare - the downside

Nobody can argue that it isn't important to reduce fraud in the healthcare system; and an argument can certainly be made that in order to fight that fraud effectively, the kind of power the government has gathered to itself is reasonable and necessary. Furthermore, there can be little doubt that the Wonkonians' anti-fraud initiative has successfully reduced the amount of actual fraud in healthcare.  But unfortunately, it also appears evident that when all that federal power is applied within an environment of covert rationing, the ostensible primary objective - fighting fraud - sometimes is relegated to a secondary status.  At least occasionally, the patterns of behavior displayed by the Wonkonians more nearly fit a goal of intimidating and controlling those who work in the healthcare system - and even of hastening the looming bankruptcy of that system.

Many who work in the healthcare industry - like those who worked in the defense industry in the 1980s - have been stunned by what the feds consider as constituting fraud, and by the lengths to which they are willing to go in prosecuting that fraud.  In an effort to avoid committing inadvertent fraud, the healthcare industry is now spending billions of dollars on compliance efforts, efforts vastly complicated by regulations that are exquisitely opaque, constantly changing, and retrospectively applied.  Virtually all of the money being spent on reducing this compliance risk ultimately comes from health insurance premiums, which means that a good bit of this money is being siphoned away from the care of patients. Whether at the end of the day the anti-fraud initiative is adding to or removing dollars from actual healthcare is at best arguable.

That their anti-fraud efforts may be inducing the waste of even more healthcare dollars ultimately plays right into the hands of the Wonkonians. Forcing doctors, hospitals, Gekkonian health plans and the biomedical industry to spend billions on compliance programs (especially since such expenditures may not substantially eliminate the risk of being hit with a fraud accusation), and making it ever more difficult for doctors to remain participants in Medicare (thus creating growing numbers of angry Medicare patients), will only hasten the day when the whole system is so bankrupt and broken that government-controlled healthcare seems like the only viable remaining option.

The Wonkonians have amply demonstrated their zeal for using the Regulatory Speed Trap to bring physicians under their sway, and to the extent that the public and Congress continue cheering them on, there is little reason for them to stop.  While they clearly pushed things a bit too far with the PATH audit (to the extent that they briefly awoke the interest of Congress), they seem to have titrated their activities more effectively since then, and it is unlikely they will allow their pursuit of physician fraud to accelerate to orgiastic proportions, at least for the foreseeable future.

They are being more subtle than that. When a shark is preying on a school of mackerel, it does not allow its feeding to become so frenzied as to disperse the school.  It makes quick, terror-inducing strikes, grabs a few fish, then retreats, allowing the mackerel to re-form in a semblance of serene, piscatorial calm.  The shark and the Wonkonians are thinking long-term.  

I believe physicians are resolving themselves to a mackerel-like mentality.  "The shark probably won't get me. But it's always out there, and it's always hungry.  It will continue to strike now and then, viciously and at random. I'll try to stay in the middle of this school, away from the edges, and do nothing to draw attention to myself.  And I'll always be alert for it, always watching, even as I try to fulfill my own mackerel-needs."

I can almost hear a few of you dear readers saying something like, "Nuts to the doctors. Couldn't happen to a nicer bunch."

I'll be the first to admit that doctors have - by their historically exuberant embrasure of a runaway Tooth Fairy healthcare system, and more recently, their wholesale abandonment of the doctor-patient relationship - lost much of their moral authority.  It is partially the ostentatious and avaricious behavior of many doctors, the outright fraudulent behavior of some others, and the inability or unwillingness of the profession to police itself, that has helped to render the feds' fraud argument so persuasive in the first place. So if doctors have to rely on the sympathy of the public to relieve them of the burden of excessive fraud and abuse charges, they'd better pack enough socks, underwear and toothpaste for 5 to 10 years.

The reason the general public should be concerned is not because of what is happening to the poor doctors.  It is because of what is happening to them. For what can more effectively separate the interests of doctors from the interests of their patients than the threat of a career-ending federal conviction, loss of all personal assets, and hard time in a federal prison?  When patients are discussing their chest pain with their doctors, or asking advice about mammograms, avoiding fraud is not what they want the doc to be thinking about. Consider - what is a physician to do when faced with a decision on whether to offer a medical service he believes is needed, but for which he suspects the insurer won't want to pay? In the old days a disagreement with the payer over such a service might result in, at worst, a few unpleasant telephone exchanges and having to return a contested payment. Now it might result in federal charges.  Reasonable discretion, therefore, dictates that the doctor simply withhold that medical service.

The physician's wariness of the feds is not merely an occasional thing, either.  It is rapidly becoming an ever-present and pervasive concern; as important to every healthcare decision as avoiding the scrutiny of the IRS is to every financial decision. The major impact of the E&M regulations, in fact, is to guarantee that the physician will spend time thinking about how to avoid a fraud rap during each and every encounter with a patient.  It's the law.  

Once again we see the futility of trying to avoid the rationing of healthcare by eliminating waste and fraud.  Whether these efforts are made through market forces or through federal regulations, the result is simply to increase (not decrease) rationing. Just as the HMO coerces physicians to withhold services by threatening the loss of income or the loss of jobs, the anti-fraud initiatives coerce physicians to withhold services by threatening crippling fines or jail terms.  Either way, the physician is coerced and intimidated into relegating the needs of the patient to a secondary position, in order to mollify a master who has amply demonstrated both the ability and the willingness to ruin them if they behave otherwise.

What we have to do, we patients and doctors, is to figure out how to rededicate ourselves to our commitment to each other.  Until we do, the wedge wielded by the anti-fraud and abuse crowd will continue driving us apart, leaving each of us to flounder on our own in a healthcare system that has marginalized us, commoditized us, and criminalized us.

Next: Covert rationing and end-of-life healthcare