Originally published at https://www.datadriveninvestor.com on November 4, 2019.
Bribery and its formalized version; the kickback practice under the current definition is undoubtedly among the most unethical live out ever been committed by humankind. It will probably stay that way for generations to come. Besides, its legality will be the subject of controversies between those who condemn its rationale in one way or another. In the impartial and organized ecosphere, the deed of giving or receiving no matter what of value in exchange for some form of impact or exploit is unreservedly unethical. In the majority of the circumstances, it is also deemed illicit. Yet, criminality is somehow subject to significant variance from one society to another. The bribery, along with its formally conveyed foil- the kickback or warrant has invariably applied to give, offering, or soliciting any service or item in exchange for something prized, such as monetary compensation. Black’s Law Dictionary defines bribery as “The public to influence the actions of an official or another person responsible for a public or legal duty.” Like other defining points in the modern vocabulary, kickback and bribery also carry their peculiar legitimized versions of interpretations.
Despite mixed sentiments of the public opinion, some arrangements are defined as perceptually legal, where others are punishable to the extreme. Some actions may be unarguably legit yet painstakingly unethical enough to be outlined as illegal at the other end of the spectrum. Such intended maleficence fall potentially under an assortment of delineations, including but not limited to Annates, Anti-competitive practices, Baksheesh, Bid rigging, Charbonneau Commission, Conflict of interest, Fraud, Kickbacks, Tangentopoli. Very nearly in every circumstance, the extortionate has, in one way or another, been able to vindicate their actions, with the foremost variance that some have the power to with authorization sway those defining facts; In contrast, others with the lower hands may well miss the mark despite having a benevolent objective.
The processes of Legitimizing the immoral, legalizing the unscrupulous, and illegalizing the right are the ways to delineate veracious from corrupt hypocritically. It’s imperative to realize back in history, not every accomplishment on some financial favoritism to gain lead has been perpetually reflected as an illegal activity and to the same magnitude, and by no means has righteousness been without the unjustified label associated with an act of bribery at all times. For an action to be reflected fraudulent under the front of Subornation, two or more persons (two but third intermediaries or kickback brokers) must partake. As a direct upshot of their action, the recipient of the enticement or the beneficiary must receive something of value sovereign of the overhaul provided. Almost every single industry has its stake of bad apples that entertain some form of fraudulent sweeteners. Similarly, the healthcare industry is not immune to such practices.
The Concept of Anti-kickback and Stark Law
The Federal Anti-Kickback Statute (AKS) is a well-known federal fraud and abuse bill in the United States. It’s Down to the wide-ranging conflict of interest corruption has on business relationships in the patient care, pharmaceutical, and medical device sectors. The AKS is a criminal edict that prohibits contacts envisioned to encourage or reward referrals for items or services reimbursed under federal healthcare programs. The Stark Law (“Stark”) is another comparable legislative action by a federal government that prohibits self-referral of patients by treating physicians those of certain services reimbursable by Medicare or Medicaid. Such amenities are also denoted as designated health services (“DHS”) by entities that the physicians or their immediate family members have a fiscal rapport with. In short, three main concepts of Stark’s ban on physician self-referral include- physician referral, DHS, and financial interest. Theoretically, all three ideas must be implicated for Stark to apply to a given circumstance. Thus, Stark is also known as a strict liability law. It means that the party intending to violate the law is not considered lawfully accountable until the government determines whether a violation has occurred. As a result, understanding whether Stark is drawn in an arrangement involving a physician is essential. Stark law is a technical degree, as it applies differently to diverse fact arrays.
Healthcare vs. other Industries
Bribery in medicine is exponentially critical when paralleled to other industries. Merely because of its covenants with the issues of human life, trust between the patient and the doctor, and the sacred bond solely built to protect the most critical asset of a person called health. Well-being is valuable, and the quality upholding such value is profoundly sustained by the individual values entertained by the two parties. Thus, the Act of subornation is a destructive element of norms and the importance of care. Even so,- does it mean all the rules that directly or indirectly prohibit the business part of medical practice are necessary to stop a few bad apples from giving a wrong label to the whole stock?! To delineate intentional fraudulent extortion from innocent referral to a physician's system with a financial interest in are two different spectacles. Even so, the consequences of the widespread application of Stark’s law are overwhelming; one may disagree with my later assumption based on the presumption that “the parties who intend to violate the law are not considered unlawful while the government defines whether a violation has occurred.” Yet, Despite licit reasoning, such a gray zone in the system would spare the privilege of innocence at limbo. The upshot of the stark law enforcement in the government's eyes, as who should be punished is the prevailing cause of barring referral altogether by physicians.
Stark Law and Value-based Reimbursement
Anti-kickback and the Starks law can be applied conveniently to any fee-for-service reimbursement system. Later holds a fixed value with less variability. In contrast, value-based reimbursement is more composite, as it relies primarily on engaging individual patients unswervingly with their care and incorporates personal and social determinants of health and sickness. Hence, Merit-based compensation within the existing law’s perspective forbids referral to facilities that may have better transparency to the referring physician or self-referral will open new doors for conflict of interest, imposing an added burden on independent physician healthcare professionals.
How does Value Play in Starks's Law?
We all need to concur that value is the measure of the quality of any service conveyed, which in turn is converted into a tangible item or thing to be traded for another thing or service with poles apart proportions. We can also all agree that for an action to be considered kickback or bribery, a person or an entity must be a financier of a valuable item and another recipient of the reimbursement. If something of value is a form of monetary compensation, it would be imperative to differentiate win over typical marketing and recommendation. Most of us agree that what makes marketing and promotion different is the legal statute of physician referral, DHS, and financial interest surrounding the Medicare and Medicaid programs. Meaning that- even if there were no direct 3rd party reward that existed during the referral process, still crime would be considered to have been committed in the eyes of the law. Hence, when we contemplate a valuable reward, such value is merely referred to as the repayment for the services rendered. Having said that, if referral of a patient to a facility that physician has an economic interest in was intended solely for delivering quality care, still by law would be reckoned criminal. That setup and scenarios alike are in apparent conflict with the concept of value-based reimbursement unless that price established is the imitation plagiaristic of some theoretical formulation. The Concept of Quality Measures in Healthcare hosts the good, the bad, and the ugliness that would be handed sorted out through transparency and accountability. It ultimately derives from the unique encounter between a patient and a physician.
Self-Referral and Physician’s Clinical Judgment
Self-referral in the medical field stereotypically defines the referral of a patient to a medical facility by a doctor who has a financial actuation within that establishment. The American medical association (AMA) is one of the organizations that reached out to lawmakers to pass a conflict-of-interest law preventing doctors from profiting from the route of referring patients to such facilities, even if there was no more reward anticipated by anyone other than the actual value of services rendered. At a short glimpse, the intention may seem to be impartial. But, such a broad-based approach has outright destabilized the integrity of those physicians who have nothing but legitimate objectives. Self-referral for the unsubstantiated indication is wrong; nevertheless, there is no arguable reason to hold someone accountable for an unbiased professional-quality service provided by a medical group with a common financial interest. After all, the legitimacy and transparency of the intent matters than the actual action, more so if the patient is aware of what to anticipate.
Designed Health Services and Stark’s Law
Designated Health Services (DHS) including Clinical laboratory services, Physical therapy, occupational therapy, and outpatient speech-language pathology services, Radiology and certain other imaging services, Radiation therapy services, supplies, Durable medical equipment, medical supplies, Parenteral and enteral nutrients, equipment, Prosthetics, orthotics, and prosthetic devices, Home-health services, Outpatient prescription drugs, Inpatient and outpatient hospital services are considered among those covered under the anti-kickback and stark law. The Rationing is to avert “fraud.” The double standard and vagueness of the policy grew into more apparent when we pay attention to those hospitals and managed care systems that are subsidized under Medicare part C and affordable care act provisions, which has the freedom of executing self-referral by allowing physicians under their umbrella to do the same while prohibiting independent physicians under anti-kickback legislation.
Physician Financial Interest
With minor exceptions under the federal jurisdiction, referral of a patient to a facility where the treating physician has a financial interest is unlawful. I find it hard to take on that it’s unethical, forbidden for physicians to refer their patients to such originations they’re fiscally affiliated with, even if the particular referral potentially would ensure the quality of care and optimal service per the value-based reimbursement model. I have no hesitation that under the self-referral, DHS, and financial interest, physician accountability can be seamlessly enforced without prejudgment of off-putting alternatives to deliver a top-notch amenity to the patients.
Ethics and Medical Practice
Kickbacks and rewarded appointments are primarily veiled markups on a product or service. If not disclosed, they have the potential of violating the trust between the referring physician and the patient. Concealed doesn’t always stay unnoticed, and when leaked out, what will patients the impression will be of the physician they previously thought of as working in their best interests at heart will crumble to pieces. So, what is wrong with being transparent?! After all, the aftermath and the quality of care are what amounts to under the value-based care system!
Physician-Owned Hospitals — Centers for Medicare & Medicaid Service
Signed into law by President Obama, Section 6001 of the Affordable Care Act in 2010, amended section 1877 of the Social Security Act aimed to impose additional requirements for physician-owned hospitals to qualify for the whole hospital but with rural provider exceptions. Since then, the law prohibits physician-held hospitals from expanding facility capacity. Even then, the physician-owned hospital that qualifies as an applicable hospital, high Medicaid facility, or under-served services may ask for an exemption to the prohibition from the Secretary. The ‘imperative is to acknowledge the hypocrisy of that law under the concept that self-referral is illegal under the federal statute in one case but legal in another, even if it intended to serve as a humanitarian effort. That means one thing, and one thing at most- independent physician’s sovereignty is vital to the underserved communities, more so to rural healthcare.
Nevertheless, would leave loopholes in the principle is the way to go?! American medical association (AMA) was established to protect the physician’s interest in conjunction with community health and safety. Meanwhile, it was too one of the first agencies in the medical arena that antagonistically lobbied for one of the most degrading policies in the physician’s history, explicitly anti-referral law. For something that could have been addressed through appropriate transparency and accountability provision.
Pharmacy Sales Representatives (PSR) and the Concept of Gifts
It has been postulated many times that the and acceptance of gifts from the company’s PSRs have affected physicians’ prescribing behavior, hence are to contribute to unfounded prescribing of drugs. The attitude led to tightening regulations about these interactions. Even though I'm afraid I disagree that some doctors may be influenced by gifting, free luncheon, or dinner sponsorship by a specific pharmaceutical marketing campaign, the circumstances are still the ones pointing to the outcome, not the actual transparency disclosed intentionality such feat. If, in any way, the broad judgment of sponsorship translates into some form of bribery, then the follow-up query should be to elaborate on the circumstances or procedures on how managed care systems and societies choose to handpick a particular drug in their covered list formularies. I explore further one would be enlightened on how a comparable decision makes the physicians less reliable and credible while giving the contrasting prestige to non-clinical corporations with overwhelming prejudice. Pharmacy representatives sponsoring a drug compete with another brand from a different company with similar clinical indications to treat a medical problem. Physician-pharmaceutical industry; its sales representative’s interactions
If prescribing one brand over another will not cause patient harm, then it would be premature and unfounded to punish physicians for prescribing one brand of medication as a substitute for another one, like efficiency and side effects; Especially. At the same time, pharmaceutical companies are permitted to promote the same brand of medicines to be public by emphasizing them with “ask your doctor if the particular drug is right for you.”
Observing from different prospective, financial interest is precisely how drug formularies are selected by the insurance companies, making it no less or more crooked than the physician decides on it for their patients.” Gifting physician” is the vulgar way of legitimizing war against the independent physician reign, as a gift is merely irrelevant in the medical profession. The facility is a personal favor and, in the medical world, is recognized as unethical. Yet, by no means, it implies transparent, honest business facets of the medical profession intended to be patient-centered. It is the law or is the right thing to do. That is the question. Wrong is always off beam; if is not following what is morally veracious or worthy for a particular era and place. It coincides with some form of hidden motive. Incorrect is neither always unlawful nor good deeds are recognized as legal at all times. What renders self-referral as illicit or unethical is by the merits of its effort, be it transparent or covert.
Historical fight against kickback
Extortion, bribery, and kickback are considered severe offenses punishable under laws. They’re committed in ranks within any organization, from the government at local to international networks. No one is immune from the negative outcome of its deception. A myriad of distinctive nature and severity between bribery and extortion spectrum still seems to have been defined in a way that would allow sustained analysis. Some of the beliefs are widely held by the general public and academics, but they collapse when applied to particular situations. It gets even more complex when some try to unfairly categorize physician interest in certain business entities within the same spectrum as extortion.
Some of the famous kickbacks
One of the historically known cases of all is the Watergate scandal. The affair began with the arrest of five men for breaking into the Democratic National Committee headquarters at the Watergate complex on Saturday, June 17, 1972. The FBI investigation of Watergate led to the discovery of a connection between cash found on the burglars and a slush fund used by the Committee for the Re-Election of the President (CRP), the official organization of Nixon’s campaign.
Another example; what is now considered illegal, once endorsed film studios to control what audiences saw by renting the exhibition rights to their films in a Department of Justice (DOJ) collected more than $2.5 billion in judgments and settlements related to healthcare fraud false claims in 2018. In another case, Sutter, DOJ, squared off in court about the appropriateness of Medicare Advantage beneficiaries' suitability for violating the False Claims Act for assigning inaccurate risk scores to its Medicare Advantage beneficiary's upcoming Blockbuster block. Meaning- if a theater wanted to show an, they had to pay for less promising “B movies” and short films, too.
On January 31, 2019, the Department of Health and Human Services (HHS) and the HHS Office of Inspector General (OIG) issued a proposed regulation that would have subjected certain pharmaceutical manufacturer rebates paid to pharmacy benefit managers (PBMs) to criminal and civil penalties under the Federal Anti-Kickback Statute (AKS). Something that originality enjoyed the protection under the “ The safe harbor act by definition involves safe harbor” regulations. Although potentially implicate the Federal anti-kickback statute, payment and business practices are not treated as offenses under the said provision. However, in July 2019, The Trump Administration decided against finalizing a proposed regulation.
What if Selective safe harbor did not exist, or how we define right and wrong would be weighed in the most elemental statute of its application without categorizing the action of someone on “just because.”
For instance, holding physicians in contempt for shrewdly unfair, non-transparent, and nondisclosure of information to patients or government will cause harm; thus, avoid criminalizing the promotion and exhibiting what it implies as quality skills saving lives and make people stay healthy.
What if rules were simplified devoid of undue loopholes carrying substantial costs penetrable by the rich and the powerful? -That over regulations is not one-sided and aimed to subject physicians to the risk of falling into the twilight zone of confusion, mistake, and desperation. Passing biased laws bears a resemblance to granting safe harbor to legal counsel to profiteer from the physician’s endeavor to market their practice. This enactment resembles a hidden self-referral agenda.
As of today, a hand full of managed care organizations provide all-inclusive medical services, facilities, laboratories, pharmacies, and other services. Among them are the Participants of the affordable care act (like covered California) and Medicare part C plan government-subsidized federally funded program members. What if- under the “ that could have come with no additional cost if ordered during the yearly visit can be skipped to be requested by the referrer. And so, become subjected to be hefty co-pays and deductibles in a plan that the taxpayers have already paid for for a service that a facility performs that referrer has a financial interest. And yes! Such setup is happening out there and tends to follow patterns that don’t order follow-up tests on yearly checkups. Does covered California plan a patient pays no copay or deductible for the initial and following annual physical checkups? — Nevertheless, they must pay co-pay for tests ordered during the follow-up visits and those ordered by the wellness program to which the patient was referred to within the managed care system. Such a referral scheme would incentivize the system not to order specific tests during an annual checkup instead of ordering at the auxiliary visit for extra dough. Such an organization would be breaching the anti-trust law through a clear but fine path of the self-referral arrangement that may appear as innocent collaborative care for some. For example, if ordering a “ lipid panel
Earlier in this piece, I mentioned the significance of quality and value in medical service. I also elaborated on the conflict with the application of the anti-kickback statute. This leads us to my next point- something that caught my attention not long ago. In modern healthcare, a recent blog publication stated that HHS's planning was to unveil a long-awaited proposal to change enforcement of anti-kickback laws. Its focus has predominantly suggested value-based payments and coordinated care should not fall under the Stark law’s purview. According to the Center for Medicare Services (CMS) and HHS’ Office of Inspector General, the kickback protections “unnecessarily limits” the coordinated care, and the necessary changes are compulsory to isolate fraud rather than inhibiting data-sharing among physicians who would, in turn, facilitate “better patient care.” Interestingly enough, retrospectively, this dictum leads us back to my original subject that- unsubstantiated overindulgent regulations would not at all times ensure quality healthcare delivery. Still,
they will add more flame to the already relentless physician burnout and criminalize those physician judgments' innocent intentions. Nevertheless, despite constructive efforts from HHS to reestablish the pathway to the actual value of medical services, still, their determinations would fall short if the agencies fail to appreciate the candid definition of the value in the healthcare arena. In contrast to what is today being defined as “merit-based reimbursement” by essentially factoring in social determinants of a patient population along with taking into account particular profile and Algorithmic determinants that are nothing but the product of technical or science-based logic; the genuine value-based pay necessitates sole individual, the independent mutual encounter between a physician and a patient. The latter to be implemented must factor in apiece patient personal determinant and what is crucial within their social environment.
Consequently, placing pointless limits through one-size-fits-all policies with the ration of averting fraud, any effort made to maximize the quality and value of the care will end up in the botch wastebasket. Hence, the Personalization of services invariably relies on the true definition of quality and value. Government intervention is an utter failure under excess political loopholes and double standards within the system. Like other bipartisan initiatives within sectors, all sharing a common phenomenon being a failure to define and differentiate fraud, favoritism, self-referral, wrongful intention, extortion, and bribery; leaves too large of gray areas wide-open to be exploited by alternate rich and powerful lobbyists.
The highly controlled environment is prone to corruption. The notion of “laws are meant to be broken” is not necessarily spot-on. What makes more sense in today’s politics is: “laws are made by those who know where the loopholes are and for when it is desirable to be penetrated.” I call it the Controlled (organized) kickback scheme. It sure seems the brightest know when to make extortion seem like an act of kindness, as it can be done through planned and executed legal kickback. In the case of that are consolidated and increasingly vertically integrated industries. They have been empowered in the past by the administration to play an essential role as one of the world’s most prominent players in the healthcare industry; pharmaceutical distribution. Even though policymakers are trying to reform the drug rebate system by increasing transparency, it still carries insufficient Pharmacy benefit managers (PBM) weight because such transparency exposes fragments of the entire process. Logically For successful execution, is complete transparency required along the chain of operations accompanied by pinpoint accountability? Anything short would point to the alternative objective of easy admission to big data.
The most important is the Intention.
There appears to be no conflict if the legitimate reason justifies referring a patient to a medical business where a referring doctor has a professional interest. Such transfer is in line with the well-being of the patient. No logical explanation reasons for commissioned pay in exchange for the referral process in the value-based reimbursement model. That is irrelevant because the fiscal directive is not a value-based model. HHS’s refurbishment of Stark law rules to protect coordinated care is the precise gauge of where the agency is coming from; yet, whether enough carries the controversy of its own.