A couple of weeks ago the President and his allies in the press
made much of ObamaCare’s six-month anniversary, using the occasion
to tout a selective list of minor provisions that went into effect
on September 23. We heard a lot about dastardly insurance industry
practices, such as the fiendish refusal to insure people against
maladies they have already contracted, from which we are now
shielded by the Patient Protection and Affordable Care Act (PPACA).
There was no mention, however, of a more important provision that
has also gone into effect. This obscure provision of PPACA, buried
deep in Section 6402, has received little attention from health
policy wonks and even less from the “news” media. Nonetheless, it
has very serious implications for the legal rights of health care
providers, the American justice system and ability of many patients
to access medical care.
A fundamental principle of our justice system holds that a
person cannot be convicted of a felony unless it has been proven
that he acted with “criminal intent.” It must be shown, in other
words, that he intentionally engaged in conduct he
knew to be illegal. This is a venerable legal principle
whose pedigree reaches back to the beginnings of Western
Civilization, and it was an important element of the English common
law upon which the American justice system is based. The
requirement to prove criminal intent has, however, been something
of a nuisance to Beltway bureaucrats seeking to bend private
industry to their will. And it has been particularly inconvenient
for federal prosecutors trying to throw doctors and hospital
executives in jail for violating hopelessly obscure and Byzantine
regulatory statutes. But that pebble has been removed from the
federal shoe by ObamaCare.
Specifically, Section 6402(f)(2) revises existing law so
that the government can ignore the criminal intent principle in
violations of the Anti-Kickback Statute (AKB). AKB prohibits the
payment or receipt of remuneration in exchange for referrals or the
purchase of goods and services paid for by a federal health care
program. It is a criminal statute, the violation of which is
punishable by imprisonment for up to five years. Prior to last
March, the government could not obtain a conviction under AKB
unless it proved that a defendant knew about the law and
intentionally ignored it. The authors of PPACA used the health care
bill to revise the statute such that “a person need not have actual
knowledge of [AKB] or specific intent to commit a violation.” The
“person” who will most likely be prosecuted regardless of “actual
knowledge” or “intent” is, of course, your doctor or someone with
whom he does business.
As ominous as this surreptitious revision is for
physicians and other health care providers, it has even scarier
implications for our justice system in general. PPACA’s reduction
of the prosecutorial burden for AKB is part of a broad legislative
pattern that has been gaining momentum in recent years. Congress
has ignored the principle of criminal intent in an increasing
number of statutes covering a wide variety issues and industries.
As Edwin Meese III and Norman L. Reimer put it in their Foreword to
the recently published Heritage Foundation
report, “Without Intent: How Congress is Eroding the Criminal
Intent Requirement in Federal Law,” this pattern has “dangerously
impaired the justification for criminal punishment that has for
centuries been based on an individual’s intent to commit a wrongful
act. This trend undermines confidence in government and risks
pervasive injustice.”
“OK,” you’re thinking, “The erosion of the criminal intent
principle is troubling. But, as a practical matter, how can a
doctor or some other health care provider violate the statute
without knowing it?” With frightening ease, as it happens. The line
separating legal and illegal business practices under AKB is not
easy to see. A provider’s guilt or innocence in an anti-kickback
prosecution, to paraphrase a former President, depends on what the
meaning of “remuneration” is. And AKB is written in such
impenetrable bureaucratese that a generally accepted legal
definition of that word has been elusive. “Remuneration” means
obvious things like kickbacks and bribes, of course, but it can
also mean “payment in kind” made “directly or indirectly, overtly
or covertly.” Interpreted broadly, such language can cover
virtually every transaction that occurs in the health care
industry.
Predictably, the Beltway bureaucrats have interpreted the
“R” word very
broadly indeed: “[T]he government has invoked the broad
prohibition against ‘remuneration’ to target common business
arrangements, such as product discounts, marketing agreements and
home health-management deals.” The latter example has produced a
number of weird advisories from the Department of Health and Human
Services (HHS), including one in
which a home health agency was told that providing free educational
videos “could potentially generate prohibited remuneration under
the anti-kickback statute.” HHS has also issued warnings to
charitable organizations wishing to assist financially needy
patients with Medicare deductibles, and a particularly perverse HHS
advisory
warned that AKB could be invoked pursuant to a hospital’s
desire to provide “free oral nutritional supplements to
malnourished end-stage renal patients.”
Even a practice as common and necessary as physician
credentialing by hospitals has been associated with “remuneration”
by HHS. A hospital is required by law, industry standards, and its
general health care mission to verify physician credentials and
assure the clinical proficiency of its medical staff. Indeed, HHS
itself admonishes hospitals to monitor quality “by appropriately
overseeing the credentialing … of their medical staffs.” Yet the
very
HHS notice in which this quote appears also warns that, under
certain vaguely-defined circumstances, “medical staff credentialing
practices may implicate the anti-kickback statute.” This would be
amusing and ironic except that, due to PPACA’s evisceration of the
intent requirement, the wrong judgment call could well cause
doctors (i.e. the people receiving the alleged remuneration) and
hospital executives (i.e. the people “paying” it) to go to
jail.
Would a sensible federal prosecutor go after obviously
innocent people? Probably not. But the good sense of government
lawyers is a very thin reed upon which to lean. The application of
federal statutes under the current administration has been so
irrational that the Department of Justice recently
prosecuted a group of physicians for “price-fixing” because
they had
refused to accept a price-fixing scheme. A group of Idaho
orthopedists declined to work for the low payment rates arbitrarily
dictated by the state’s industrial commission
and, in typically Orwellian fashion, the Obama
administration “unambiguously stated that refusal to accept
government price controls is a form of illegal ‘price fixing.’” In
the hands of an administration so hostile to the remaining vestiges
of free market health care and so disconnected from common sense,
the prosecutorial discretion created by PPACA is a very dangerous
weapon.
In addition to undermining the legal rights of health care
providers and eroding a core principle of our justice system,
Section 6402 will also have an adverse effect on the ability of
many patients to access care. The only sure way for a doctor,
hospital, ambulatory surgery center, etc. to avoid being sucked
under by this dangerous legal quicksand is avoid Medicare, Medicaid
and SCHIP patients like the plague. If a doctor simply declines to
treat patients whose care is paid for by the government, he need
not worry about landing in the penitentiary for unintentionally
violating a law about which he knows little or nothing. Because
none of these programs pay enough to cover costs, providers are
already reconsidering the wisdom of treating government-covered
patients. PPACA’s revision to the intent language of the AKB may
provide the impetus for a mass exodus of providers out of all
government health care programs.
The primary victims of such an exodus would, of course, be
the most vulnerable patients — seniors, poor people and children.
Section 6402’s potential impact on these patients, combined with
its corrosive effect on the legal rights of providers and our
justice system in general, makes it one of the most important
provisions of PPACA. And yet it was conspicuously absent from the
list of provisions touted by the White House and the media on
ObamaCare’s six-month anniversary. Nancy Pelosi famously said that
we would have wait until Congress had passed “reform” before we
could see what was actually in the bill. Well, now we have read it.
And it is abundantly clear that she, her congressional accomplices
and the President intentionally engaged in conduct they
knew to be, if not technically unlawful, wrong.
