Tuesday, November 5, 2013

Administration says that Obamacare is not a federal health care program

The Affordable Care Act is the biggest new health care program in decades, but the Obama administration has ruled that neither the federal insurance exchange nor the federal subsidies paid to insurance companies on behalf of low-income people are “federal health care programs.”

The surprise decision, disclosed last week, exempts subsidized health insurance from a law that bans rebates, kickbacks, bribes and certain other financial arrangements in federal health programs, stripping law enforcement of a powerful tool used to fight fraud in other health care programs, like Medicare.

[Secretary of health and human services Kathleen Sebelius] did not explain the legal rationale for her decision, which followed a spirited debate within the administration. ...

Lawyers and law enforcement officials said Ms. Sebelius’s decision was unexpected because the insurance exchanges and subsidy payments appeared to fit the definition of federal health care programs in the anti-kickback statute. ...

Such programs are defined broadly as “any 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.” ...

Kevin G. McAnaney, a lawyer who specializes in health care fraud and abuse cases, said Ms. Sebelius’s decision would allow drug companies to give coupons to people who buy insurance through the exchanges.

Such coupons subsidize co-payments and reduce out-of-pocket costs for consumers, encouraging them to use certain brand-name prescription drugs when lower-cost alternatives are available, Mr. McAnaney said.

The federal government has forbidden the use of drug coupons in Medicare and other federal health programs, saying they amount to a classic kickback scheme, with drug companies paying consumers to use their products. ...

Coupons may drive down the co-payment for an expensive brand-name drug, but often, the insurer must pay much more than it would for a generic version of the medication.
--Robert Pear, NYT, on twisting the meaning of words