April 30, 1996

To: All Senators and Congressmen:
Re: The Kassebaum-Kennedy Bill

According to press reports, the Kassebaum-Kennedy Bill is supposed to be a simple bill to improve insurance portability. The most controversial features are said to be Medical Savings Accounts and tort reform.

In fact, about one third of its 300+ pages concern federal civil and criminal penalties for patients, physicians, and anyone else involved in health care, for a broad range of vaguely defined offenses.

I call your attention to the following, with page references from the House version (H.R. 3160, mostly incorporated into H.R. 3103):

1. A Health Care Fraud and Abuse Trust Fund is created to accept gifts, criminal fines, civil monetary penalties, and forfeited property (the more zealous the prosecutors, the more money they have to fund more prosecutions) -- pp. 147 ff.
2. Civil monetary penalties are increased from $2,000 to $10,000 for each instance of "failure to comply with statutory obligations," e.g. incorrect coding or providing "medically unnecessary services" (p. 195).
3. "Remuneration" is defined as "transfers of items of services for free or for other than fair market value" (the criminalization of charity?) -- see p. 198.
4. NO PROOF OF SPECIFIC INTENT TO DEFRAUD IS NECESSARY FOR CONVICTION (p. 200).
5. "Federal health care offense" is defined to mean a violation that involves "any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual" (p. 202).
6. Any person who "intentionally misapplies" any assets of a health care benefit program "shall be fined under this title or imprisoned not more than ten years, or both; but if the value of such property does not exceed the value of $100 the defendant shall be fined under this title or imprisoned not more than one year, or both" (p. 205).
7. LIFE IMPRISONMENT is prescribed "if the violation results in death" (p. 203 and Clinton Plan Sec. 1347).
8. "WHOEVER" makes a false statement to a health care plan is liable for a five-year prison term (pp. 205-206), and a patient's medical records could be used to convict him (p. 210).
9. "The Court, in imposing sentence on a person convicted of a Federal health care offense, shall order the person to forfeit property, real or personal, that constitutes or is derived, directly or indirectly from gross proceeds traceable to the commission of the offense" (p. 211).
10. Failure to comply with standards and requirements for electronic data transmission is to be penalized by fines of $100 per instance, up to $25,000 per year.

We would like to know if you favor making patients and physicians subject to federal prosecution for alleged infractions of the rules of any health plan, public or private, with penalties that may exceed those imposed by states for rape or aggravated assault? Do you consider physicians who use the wrong insurance code deserving of asset forfeiture punishments designed for racketeers and drug dealers?

Please let us know specifically which of the above provisions you favor or oppose, and whether you consider any of them to be unconstitutional. You may telephone your reply to our (800) number, or write or FAX to the numbers above.

We would also like to know whether you consider it good public policy to pass such radical extensions of federal power, with such far-reaching effects on the ability of Americans to practice medicine or receive medical care, without any public notice or debate whatsoever.

We would appreciate your prompt and specific response, stating your position on each of the ten items listed above. We will tabulate and make your responses known. For your convenience, you could just mark each of the statements "yes" or "no" and FAX back this letter with your name.

Thank you for your consideration.

Sincerely,

Jane M. Orient, M.D.
Executive Director