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The Affordable Care Act and Fraud

The federal anti-kickback statute is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of federal health care program business. It is an essential law in combating fraud, waste and abuse of precious federal healthcare dollars.  When a patient visits a doctor, there is a tremendous financial incentive for relationships to be established between various healthcare providers to refer and provide additional healthcare tests and procedures, many of which are often unnecessary.  One of the worst offenders of the spirit of the statute is the widespread use of "pod labs" by dermatologists, urologists and other physician groups.  Pod labs are usually backroom, unaccredited pathology laboratories in which the referring physician has a financial interest.  It is obvious to even the layperson to understand that such arraignments are ripe for abuse.  If the referring physician can make more money depending on how many pathology specimens he or she refers to her own laboratory, the temptation for fraudulent charges becomes immense.   Unfortunately, the average patient has no knowledge of these insidious arraignments nor the fact that their specimens are being analyzed in an unaccredited laboratory, often by a less than stellar pathologist.

One would expect that the Affordable Care Act would constitute a "federal health care program" and therefore would be covered by the anti-kickback statute.  But one would apparently be wrong.  The Pathology Blawg has the story:

[T]he Department of Health and Human Services (HHS) has determined the federal health care exchanges and health insurance subsidies for low income individuals under the Affordable Care Act (ACA) do not constitute a "federal health care program" and therefore the federal Anti-Kickback Statute (AKS) will not apply.

Thus, it seems that fraud prevention is not high on the list of imperatives for the Affordable Care Act.  This is of course strange insofar as healthcare costs are always touted as one of the primary reasons why we need healthcare reform.  Although as Robert Radick mentions in Forbes,"the precise logic behind Secretary Sebelius's decision is not yet clear."

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