The Qui Tam Team Blog Join In the Fight Against Fraud

Health Care Bill Passed; Whistleblowers Needed!

This post was written by Josh

Now that Congress has finally passed the health care bill, there will be an even greater need for whistleblowers to identify  fraud in the health care industry, particularly in relation to Medicare and Medicaid. The health care bill gives little "gifts" to insurance companies and hospitals, including insurance giant Kaiser Permanante and doctor-owned facilities in about a dozen states including Ohio, Pennsylvania, and Tennessee.

In terms of Medicaid, the health care bill is notable in that it expands coverage to include 133% of the poverty level ($29,327 for a family of four) and will require states to expand Medicaid to include childless adults starting in 2014. As for Medicare, drug companies have been thrown a serious bone. Seniors covered under Medicare Advantage will receive a 50% discount on name brand drugs in 2011, whereas presently they must pay thousands in out of pocket costs once they hit the "doughnut hole"-- the coverage gap in prescription drug benefits. The doughnut hole led to many seniors going off their prescription medications or splitting pills to cut costs, which in turn affected drug makers' bottom lines.

In general, the brand-name drug industry was a winner as a result of the health care bill. The pharmaceutical industry will keep its $80 billion a year agreement to provide savings and rebates. Fees charged to drug makers will be offset by the fact that drug makers stand to enjoy more customers, as more patients will be insured and receiving prescription drugs (as many as 32 million Americans will now have some type of insurance). The bill maintains the 50% discount for Medicare recipients, and the government will pay for another 25% discount. The bill also gives biological drug makers a 12 year period of exclusivity before the information necessary to create generic versions is made available to others. Critics argue that this provision will keep life-saving therapies out of reach of many patients. Biologics are drugs that are grown inside living cells using gene splicing techniques, and biotech companies guard their production secrets very closely. Companies like Genentech have scored big hits with certain cancer drugs, but these drugs remain very expensive.

Hospitals have also been given some gifts in the health care bill. For example, hospitals in Tennessee were given a combined $100 million in Medicaid "Disproportionate Share Hospital" payments for 2012 and 2013.  Officials insist that the payments were not a "special deal" in order to get Tennessee Democrats to vote for the bill (one Tennessee Congressman, Democrat Bart Gordon, did announce that he would change his November vote and support the health care bill).

Reading between the lines in all of this, it seems that there will be many new opportunities for fraud. With millions of new patients now having access to prescription drugs and receiving treatment at hospitals flush with Medicaid payments, the potential for fraud is greatly expanded. All you health care whistleblowers out there, keep your eyes open.