Secretary of the
US Department of Health and Human Services Kathleen Sibelius recently announced
that health plans offered through exchanges will not be considered Federal
health plans – and many breathed a huge sigh of relief. Not so easy.
Secretary's announcement means is that plans purchased through exchanges will
not be administratively under the oversight of CMS. This is a significant
burden avoided. But it is creating a false sense of security among plans and
providers who seem to think that this makes compliance an afterthought
In the case of
many, probably most, plans purchased through exchanges, Federal dollars in the
form of premium subsidies are at issue. When Federal dollars are being spent,
the False Claims Act (FCA) applies. This means that although the health plans
offered through exchanges are not Federal health plans, they may have the same
exposure to both governmental and whistle blower FCA actions that anyone who bills
Medicare or Medicaid has. Not only do plans offered through exchanges have this
exposure, anyone who bills these plans also may have FCA exposure.
Think about this
way. A company which manufactures bullets for the US Department of Defense is
not a Federal entity. While DOD may provide oversight, that is a matter of a
contractual relationship. But the bullet maker is certainly a potential target
of an FCA lawsuit if they bilk the government.
I make it a
point to know members of the plaintiff's bar, and, believe me, they are
assuming applicability of the FCA to plans offered through exchanges and to
those who bill them. It will take a while to see how this works out but it
would be foolish to hug the Secretary Sibelius security blanket until this
works itself through the court system. Do we really expect the government to
demure if an exchange health plan defrauds the government?
terms, this means that plans offered through exchanges have every bit as much
reason to have full-blown compliance programs as the hospital down the street. Similarly,
those who bill such plans should uphold the same standards as when they bill