Topic: Health Care & Welfare

Drugs for the Deceased

Medicare fraud is rampant. The Government Accountability Office (GAO) estimates fraud compromises 8 percent of total expenditures, or $44 billion annually. Outside estimates are as high as $120 billion. A recent report from the Department of Health and Human Services Inspector General highlights just one of the many examples of waste, fraud, and abuse within the system: Medicare paying for drug coverage of deceased beneficiaries.

Medicare Part D provides prescription drug coverage to 39 million seniors costing taxpayers $59 billion annually, net of premiums paid by seniors. In 2013 Medicare paid for 1.2 billion prescriptions.

The Inspector General’s report details the fraud: “In 2012, Medicare paid for 348 HIV [human immunodeficiency virus] drugs for 158 deceased beneficiaries. The total cost for these drugs was $292,381.” The report studied HIV drugs as they are targets for abuse since they are so expensive.

These drug claims were not isolated instances. The IG found “each of the 158 beneficiaries had between 1 and 6 drugs dispensed after the date of death; most beneficiaries had at least 2.” Medicare spent $7,160 for three prescriptions for one patient’s drugs in Florida. They were approved on two separate occasions after his death. Medicare approved three prescriptions for a patient in Michigan costing $5,616.

Approvals occur because of a delay in receiving information about a beneficiaries death. This results in a period where the recipient is dead, but Medicare’s system still consider the patient to be alive.

This is not the first time that the Inspector General has criticized Medicare’s handling of deceased beneficiaries. In 2011 the Inspector General found that Medicare Part C and D paid $21 million for claims by deceased beneficiaries.

The Inspector General acknowledged that the total amount of fraud was miniscule compared to total Medicare spending. HIV drugs represent just one-quarter of one percent of Part D prescriptions. But the approval process is the same for all Part D drugs meaning other drugs are also vulnerable to improper payments for deceased individuals. The report says “A change in CMS’s practice would affect all Part D drugs, not just HIV drugs. Considering the enormous number of Part D drugs, a change in practice could result in significant cost savings for the program and for taxpayers.” An estimate of cost savings is not included, but it would likely be in the millions.

Medicare does plan to fix the system for dead beneficiaries, but with billions  wasted on Medicare every year, stopping the tide of improper payments seems unlikely without major structural reform of the program.

Administration Drastically Lowers the Bar for Second Year of Enrollment

Broken promises and lowered expectations littered the first year of the Affordable Care Act. When the law was being debated, Obama promised the law would cut health care premiums for a typical family by $2,500. Instead, premiums everywhere continued to rise, in some places they skyrocketed. Supporters claimed the law would reduce the deficit, citing a score from the Congressional Budget Office. More recent calculations with a full ten years of implementation show that it will increase budget deficits. The now infamous “if you like your health care plan, you can keep it” pledge, which Politifact dubbed its “lie of the year” turned out to be a fabrication as millions of people received cancellation notices. The administration has tried to shift focus from past promises on cost containment and premium savings to the expansion of insurance coverage. Even in this area, the Affordable Care Act looks like it will fail to meet its goals, and the administration is already scrambling to try to temper expectations.

At an event at the Center for American Progress earlier this week, Health and Human Services Secretary Sylvia Burwell revealed that the administration had drastically lowered their exchange enrollment target. She divulged “[t]he number we’re going to aim for this year is 9.1 million.” This is a far cry from the Congressional Budget Office’s April projection of 13 million. The new goal for next year  is only 70 percent of the initial projection, which showed exchange enrollment jumping 7 million in 2015. The new target only anticipates a net increase of 2 million, a drastic reduction.       

In a related brief, HHS cited a slower than expected shift from employer-sponsored insurance and off-exchange enrollment as the reason for the lower projection. The brief suggests that it will take five years instead of three to ramp up to the eventual enrollment level of 25 million. This could mean that exchange enrollment could not reach its peak until 2019 and will likely fall short of initial expectations for years to come.

Secretary Burwell also sought to tamp down expectations for the website, saying that it “will have things that won’t go right. We will have outages, we will have downtime.” While the website will probably function better than last time, the second round of open enrollment faces many serious obstacles.

Most of the people most interested in signing up already did last year. Convincing those still uninsured to sign up could be more of a challenge. The first enrollment period had more outreach and coverage, whereas the Obamacare story potential enrollees are most likely to see now is news that the Supreme Court agreed to hear a case that could invalidate the majority of federal subsidies. Automatic renewal for people already enrolled poses another problem. If they do nothing, many people could keep the same plan but have to pay much more due to the way the law calculates subsidies. On top of that, the second open enrollment is only half as long as the first, so people have less time to visit the website and enroll through the exchange.

The first real indicator for how the second round is going will be how the renewal period goes for people who signed up last year. Last year there was a surge in enrollment at the end of the enrollment period. If people run into problems with automatic renewal or have difficulty using the website that could deter new potential enrollees.

The law’s past failures have led to broken promises and missed goals in areas like cost savings, premium reduction and improving the quality of care people receive. One of the only metrics the administration could point to in the past was that exchange enrollment in the first year actually met stated goals despite the website’s terrible launch. Now it seems that the law will fall short in enrollment too.

Open enrollment begins next week, and the recent efforts by the administration to lower expectations so close to the start date do not inspire much confidence.

Why Transparency Is Important

The benefits of transparency are hard to explain. Bit by bit, we’re improving public oversight of government, I’ve been heard to say, implying more libertarian-friendly outcomes—never quite sure that I’m getting my message through.

Now comes a comment on transparency that articulates its importance better than I ever could. It’s Obamacare architect Jonathan Gruber describing how lacking transparency allowed the president’s signature health care regulation to pass.

A gaffe in Washington is when somebody tells the truth. Thanks to this one, more people may understand how non-transparent government undercuts their freedoms. Insisting on government transparency can protect them.

Krugman vs. Krugman on Statutory Interpretation

To follow-up on my colleague Walter Olson’s earlier post on the Paul Krugman piece on King v. Burwell, what struck me was Krugman’s flexible approach to statutory interpretation.

Here he is in today’s piece:

Last week the court shocked many observers by saying that it was willing to hear a case claiming that the wording of one clause in the Affordable Care Act sets drastic limits on subsidies to Americans who buy health insurance. It’s a ridiculous claim; not only is it clear from everything else in the act that there was no intention to set such limits, you can ask the people who drafted the law what they intended, and it wasn’t what the plaintiffs claim. …

 if you look at the specific language authorizing those subsidies, it could be taken — by an incredibly hostile reader — to say that they’re available only to Americans using state-run exchanges, not to those using the federal exchanges.

As I said, everything else in the act makes it clear that this was not the drafters’ intention, and in any case you can ask them directly, and they’ll tell you that this was nothing but sloppy language. …

So, don’t worry so much about the specific language; instead, look at the drafters’ intent and the surrounding context. Got it.

On the other hand, here’s Krugman from January of 2013, writing about the idea of a platinum coin:

Enter the platinum coin. There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.

So in this situation, you should stick to the “letter of the law,” and not worry so much about the drafters’ intent.

Hmm, how to reconcile those two Krugman assertions about the proper approach to statutory interpretation?  That’s a tough one.  Wait, I got it!  We’ll call this the Krugman canon of construction: “Interpret statutes in whatever way makes them consistent with your policy preferences.”

Krugman on King v. Burwell

Even by his standards, Paul Krugman uses remarkably ugly and truculent language in challenging the good faith of those who take a view opposed to his on the case of King v. Burwell, just granted certiorari by the Supreme Court following a split among lower courts. Krugman claims that federal judges who rule against his own position on the case are “corrupt, willing to pervert the law to serve political masters.” Yes, that’s really what he writes – you can read it here.

A round of commentary on legal blogs this morning sheds light on whether Krugman knows what he’s talking about. 

“Once upon a time,” Krugman claims, “this lawsuit would have been literally laughed out of court.” [Citation needed, as one commenter put it] The closest Krugman comes to acknowledging that a plain-language reading of the statute runs against him is in the following:

But if you look at the specific language authorizing those subsidies, it could be taken — by an incredibly hostile reader — to say that they’re available only to Americans using state-run exchanges, not to those using the federal exchanges.

New York City lawyer and legal blogger Scott Greenfield responds

If by “incredibly hostile reader,” Krugman means someone with a basic familiarity with the English language, then he’s right.  That’s what the law says. … There is such a thing as a “scrivener’s error,” that the guy who wrote it down made a mistake, left out a word or put in the wrong punctuation, and that the error was not substantive even though it has a disproportionate impact on meaning.  A typo is such an error.  I know typos. This was not a typo. This was not a word misspelled because the scribe erred.  This was a structural error in the law enacted. Should it be corrected? Of course, but that’s a matter for Congress.

While some ObamaCare proponents may now portray the provision as a mere slip in need of correction, as I noted at Overlawyered in July, “ObamaCare architect Jonathan Gruber had delivered remarks on multiple 2012 occasions suggesting that the lack of subsidies for federally sponsored exchanges served the function (as critics had contended it did) of politically punishing states that refuse to set up exchanges.”

Josh Blackman, meanwhile, points out something incidental yet revealing about Krugman’s column: its homespun introductory anecdote about how his parents discovered that they had been stuck with a mistaken deed to their property, fixed (“of course”) by the town clerk presumably with a few pen strokes and a smile, couldn’t possibly have happened the way Krugman said it did. Property law, much more so than statutory construction, is super-strict about these matters.

If your deed is incorrect, you cannot simply get the “town clerk” to “fix the language”. … Mistakes are enforced by courts. That’s why [everyone] should purchase title insurance. … 

So this is the exact opposite example of what Krugman would want to use to illustrate why King is “frivolous.” If courts applied property doctrine to the construction of statutes, this case would be over in 5 seconds. The government loses. 

To be sure, there may be better arguments with which to defend the Obama administration’s side of the King case. But do not look for them in Paul Krugman’s commentary, which instead seems almost designed to serve the function of pre-gaming a possible defeat in King by casting the federal judiciary itself as “corrupt” and illegitimate.  

 

 

Statement on Supreme Court Granting Cert in King v. Burwell

I applaud the Supreme Court’s decision to grant certiorari in King v. Burwell.

Since January, the Obama administration has been spending billions of unauthorized federal dollars, and subjecting nearly 60 million Americans to unauthorized taxes, all to hide the full cost of the Patient Protection and Affordable Care Act, or ObamaCare. The administration’s actions have not only violated the law and caused massive economic disruption, they have also subverted the democratic process. The plaintiffs in Pruitt v. BurwellHalbig v. Burwell, King v. Burwell, and Indiana v. IRS seek to put an end to those unlawful taxes and spending.

The Supreme Court’s decision is a rebuke to the Obama administration and its defenders, who dismissed as frivolous the plaintiffs’ efforts to defend their right not to be taxed without congressional authorization.

It is essential that these cases receive expedited resolution, if only to eliminate the uncertainty currently facing states, employers, insurers, and taxpayers.

Most important, these cases deserve expedited consideration because only they can bring an end to the greatest domestic-policy scandal of this administration.

Click here for reference materials on these cases, including all court filings and judicial opinions. Click here for news and opinion coverage of these cases.

How to Repeal ObamaCare through the Same Process that Gave Us ObamaCare

From my latest at Darwin’s Fool:

Republicans won an impressive number of victories last night, including a larger and more conservative House majority and enough wins to give the GOP at least a 52-seat majority in the Senate. As Jeffrey Anderson and Robert Laszewski have noted, Republicans made ObamaCare a major issue in the election  (the New York Times’ denials notwithstanding). Senate Republicans will fall several seats short of the 60-vote super-majority needed to overcome a Democratic filibuster of an ObamaCare-repeal bill, though. ObamaCare opponents are therefore debating whether and how Republicans could repeal some or all of the law via the Senate’s “budget reconciliation” process, which allows certain legislation to pass the Senate with only 51 votes. Some opponents have proposed getting around these difficulties by getting rid of the filibuster entirely. I think there’s a more prudent, targeted way Republicans could put ObamaCare repeal on the president’s desk, give Democrats a taste of their own majoritarian medicine, and convince Senate Democrats of the virtues of restoring the filibuster on legislation and judicial nominations.

It goes like this…

Read the whole thing.