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Trump administration eyes overhaul of health care fraud and abuse laws

Megan Henney

The Trump administration unveiled a proposal on Wednesday to overhaul decades-old health care laws once intended to curtail fraud and abuse, which companies now say hinders their ability to provide better care to patients.

The Department of Health and Human Services released a plan to loosen the requirements of rules that prohibit doctors from directing patients toward services or facilities where they have a financial stake and that bans health care companies and providers from offering bribes in exchange for patient referrals.

However, those rules are now viewed as counterintuitive by providers as they try to coordinate care for patients.

“Regulatory reform has been a key piece of President Trump’s agenda not just for faster innovation and economic growth, but also better, higher-value healthcare,” HHS Secretary Alex Azar said in a statement. “Our proposed rules would be an unprecedented opportunity for providers to work together to deliver the kind of high-value, coordinated care that patients deserve.”

Under the proposal, HHS would make changes to the physician self-referral law and the federal anti-kickback statute. Officials said the overhaul of these complex laws would ultimately make the system more efficient, while improving a patient’s overarching treatment -- not make committing fraud easier.

For instance, a hospital could send a patient who has end-stage kidney disease home with technology to monitor their disease, which would then would automatically transmit any developments back to their doctor. Such an arrangement would currently be construed as illegal under current law.

Officials said the proposals will:

  • Allow doctors, hospitals and other providers to create “value-based arrangements” arrangements under new exceptions to the current anti-kickback rules
  • Establish new “value-based” exceptions in order to acknowledge the health care system “pays for value, rather than the volume, of services provided.” 
  • Clarify rules for providers by offering specific state harbors for these arrangements

Still, there are some exceptions to the new rules. Namely, pharmaceutical companies, suppliers of medical equipment and medical device labs would be excluded out of concern they’d abuse the system because they rely so heavily on prescriptions and referrals.

“We are concerned that these entities might create arrangements styled as value-based arrangements that serve to tether clinicians or patients to the use of a particular product (e.g., a drug or implantable device, such as a device with a mechanical or physical effect on the body) when a different product could be more clinically effective for the patient,” the proposal said.

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