April 25, 1996

This Action Alert started out to be about Medical Savings Accounts. But then I read the House bill, H.R. 3160, that does have MSAs on pp. 263-289, but the Clinton plan for federalizing and potentially criminalizing all health-related transactions on pp. 142-243. Whether this is in the Senate plan I don't know because as of April 25, after it had already been passed 100 to 0 by the Senate, the text of the bill was not available.

A Presidential veto is the best thing that could happen to this bill! But will he veto language lifted straight from his own Health Security Act, just because of a little tort reform and MSAs?

Some highlights:

• A Health Care Fraud and Abuse Trust Fund to accept gifts (bribes?), criminal fines, civil monetary penalties, and forfeited property. (The more zealous the prosecutor, the more money available for more prosecutions. See pp. 147 ff.)
• Rewards to informants who provide information leading to the collection of at least $100 in penalties (p. 161). Civil immunity to informants (p. 187).
• Civil monetary penalties 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 service" (p. 195).
• "Remuneration" includes "transfers of items of services for free or for other than fair market value" (p. 198). (Is charity care defined as fraud, along with routine waiver of deductibles and copayments?)
• NO PROOF OF SPECIFIC INTENT TO DEFRAUD IS NECESSARY (p. 200).
• "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).
• "Defrauding" any health care benefit program carries a fine and/or imprisonment for 10 years, or LIFE IMPRISONMENT "if the violation results in death" (p. 203 and Clinton Plan 1347).
• A 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).
• "WHOEVER" makes a false statement to a health care plan is liable to a five year prison term (pp. 205-206). (That includes patients.)
• Failure to provide information to a criminal investigator carries a five-year prison term (p. 206) (Delete Amendments 4 and 5 to the U.S. Constitution.)
• "In ANY investigation relating to any act or activity involving a Federal health care offense,...[the Attorney General] may require the production of ANY records that MAY be relevant" (p. 208). The person who supplies patient records in response to such a subpoena "shall not be liable in any court of any State or the United States to any customer or other person for such production or for nondisclosure of that production to the customer" (p. 210).
• Health information so produced cannot be used against the patient "UNLESS the action or investigation arises out of and is directly related to the receipt of health care or payment for health care" (p. 210). (See above on "false statements to a health care plan.")

These provisions mean the end of patient privacy and could empower the federal government to use medical records to prosecute almost anybody.

"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). Errors in coding bring the same penalties as racketeering and drug dealing.

Standards and REQUIREMENTS for electronic data transmission are to be developed, with penalties of $100 for each instance of failure to comply, up to $25,000 per year (p. 233).

The conference committee has not yet been appointed. It will almost certainly include Senators Dole and Roth and Congressmen Archer and Thomas. SENATOR DOLE IS THE KEY TO KEEPING MEDICAL SAVINGS ACCOUNTS IN THE BILL (and since he is running for President, everyone is his constituent). Tort reform also needs to stay in the bill because it is even more likely to cause a presidential veto.

But still more important than MSAs is the deletion of the "fraud and abuse" provisions that empower the federal government to threaten any individual who ever dares to offer (or even solicit) medical help for a fellow human being with possible imprisonment and/or lifelong impoverishment for "failure to comply" with complex, arbitrary regulations. If you think this is an exaggeration, READ THE BILL, then remember that HCFA has defined even CPR as "medically unnecessary" and the Michigan Board of Medicine refuses to answer the question of whether an "office visit" must include a physical examination in each and every instance, whether necessary or not. Also remember the Prime Time Live program on "Bounty Hunters": former Inspector General Richard Kusserow hounded an innocent physician to suicide, then admitted the whole investigation had been an "error."

It also appears that this bill lays the foundation for forcing all medical professionals to submit electronic information on every medical encounter to a central computer, just as is now required in Maryland. This is the tool for enforcing global budgets (rationing) and mandatory uniform practice "guidelines."

AAPS President Don Printz, M.D., suggested that even those who are most zealous about health care fraud might be willing to lower the penalties to be no greater than those imposed for rape or aggravated assault.

The main effect of the rest of the bill is to increase the cost of health insurance. It is the revival of a bill declared "dead" when it was Kennedy- Kassebaum rather than Kassebaum-Kennedy. But that is almost irrelevant in view of the above. A seemingly innocuous bill, a "farewell gift" to a departing "moderate" Republican, has become a "vehicle bill" for revolutionary changes that could never withstand public debate and were defeated in a Democratic Congress!

Call your congressman, your senator, your local talk shows, your newspaper, patient advocacy groups, and any and all medical organizations to which you may belong. Also call Senator Dole. Ask him if the Republican view of the proper role of government includes central planning of medical care, bureaucratic micromanagement under the Orwellian guise of "administrative simplification," and prosecutorial terror against both patients and physicians in the guise of controlling "fraud and abuse." If this bill goes into effect, it could mean the end of the Republican majority in Congress, as the cost of insurance skyrockets and physicians close their doors.

The Capitol Hill switchboard is (202)224-3121.