June 12, 1996

We have been receiving conflicting reports about the fate of Kassebaum-Kennedy (H.R. 3103), but it may come to a vote this week in the House and next week in the Senate. The conferees have not officially been appointed as of this writing, but some unknown persons are meeting privately to draft "language."

Key Republicans did hold a press conference to announce a compromise on Medical Savings Accounts, which removes Senator Kennedy's cover. This would knock out a "demonstration project" controlled by Donna Shalala and would allow companies with fewer than 50 workers (rather than more than 50) to set up MSAs.

Nobody in Congress seems to want a public discussion about the exact details of the "anti- fraud" provisions. Congressmen have been taking a lot of heat since the May 30 article in the Wall Street Journal, "Health Bill Would Shackle Doctors-Literally." Many probably voted for the bill without reading it, but at this point they don't want to appear weak on fraud.

We have a modest proposal. Let's be tough on fraud. Let's go after all the perpetrators, not just doctors and patients. No exceptions. No loopholes.

The Kassebaum-Kennedy bill assumes that the victims of fraud are all Health Plans. "Poor Blue Cross/Blue Shield!" "Poor Aetna!" Victims all of misrepresentations, misappropriation of assets, miscoding, claims for "medically unnecessary service," etc.

Well, they are not the only victims. What about the patients? What if a Health Plan fails to disclose important features of the contract? What if the Plan actually violates the contract and denies a claim for a service that is supposed to be covered? What if the Plan pulls a "bait-and- switch" to get patients and doctors to sign on? What if the Plan actually alters a claim or misrepresents the facts of the case so that a claim is wrongfully denied?

One feature of Kassebaum-Kennedy is LIFE IMPRISONMENT for a Federal Health Care Offense "if the violation results in death." Some have asked, "How can filing a false claim with Acme Insurance Company result in death?"

Not easy to see. But wait. What if Kassebaum and Kennedy have it backwards? What if we look at PATIENTS as the victims, and PLANS as the perpetrators, rather than the other way around?

Suppose that WedontCare HMO promises to provide bone marrow transplants to breast cancer victims if their doctor thinks they would benefit. Suppose they refuse coverage, and a patient dies who might have lived. This what happened to Christine deMeurers, as her husband explained when he testified for AAPS at a recent House hearing on managed care.

Kassebaum-Kennedy, as written, does not apply to such situations. But it should. Call your Congressman (and Sen. Lott, Kennedy, Kassebaum, Roth, and Gramm; and Reps. Archer, Hastert, Shays, Armey, and Kasich). Tell them that if they are to make only one change in the fraud-and- abuse section, alter the definitions of Federal Health Care Offense to include actions by Plans (including HMOs and other managed care entities).

There should be $10,000 penalties for each underpayment or wrongful denial. (All reviewers need an UPIN so they can be properly identified and charged.) There should be prison terms for misappropriating funds from patient care into arbitrage. And, of course, any assets derived, directly or indirectly, from premiums fraudulently acquired, are subject to forfeiture. (If the federal prosecutors need funds, they should look to where the money is.)

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