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Hi everybody.

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We are getting close to
the end of the course.

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Let's talk about a few bad
practices in healthcare,

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why they're prohibited and
what the result might be.

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First, you are going to see antitrust

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in the materials this week.

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At its most basic,

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antitrust is a method of
protection for consumers.

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Enforcement is mainly to
protect consumers' welfare

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by carefully watching

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and intervening in commercial competition.

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As you might know from other chapters,

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competition is good in
the sense it is meant

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to lower consumer prices,
foster better quality of care.

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However, artificially setting prices

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not only hurts consumers,

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but it also disrupts that
notion of how competition works.

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Healthcare antitrust laws
were designed in the US

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to prevent healthcare monopolies

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or unfair business practices

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that limit competition in the market.

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The goal of antitrust was
to promote fair competition

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among healthcare providers

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and prevent enormous healthcare systems

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that control healthcare in an area

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which would allow them to have
unchallenged higher prices.

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They could reduce quality of care

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and limit access to healthcare services.

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So these antitrust laws
apply to various entities

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within the healthcare industry,

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including hospitals, physician
groups, insurance companies,

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and pharmaceutical manufacturers.

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The goal of these laws is
to promote fair competition,

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ensure that patients have access

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to high quality, affordable
healthcare services.

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At a minimum, it is really the way

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that we prevent one provider of services

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to take over a huge region,

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and, therefore, no one
else can come in the region

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and provide competition.

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And, therefore, that healthcare entity

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basically controls everything.

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We try to eliminate that when we see it.

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Antitrust violations have
significant penalties.

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They're important deterrence.

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These occur when healthcare providers

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or organizations engage in
activities like price fixing,

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market allocation, or tying arrangements.

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Price fixing occurs when
healthcare providers agree

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to set prices at a certain level

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while market allocation occurs

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when healthcare providers agree

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to divide the market

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and not compete with each
other in certain areas.

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Tying arrangements
involve bundling products

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or services together,
such as requiring patients

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to use a specific hospital

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if they want to receive
a particular treatment.

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So you can see how these
various arrangements

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are, in the same way,
preventing competition

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and, therefore, allow
these healthcare entities

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to create their own prices

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without competition from a competitor.

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Another prohibitive
practice is a kickback,

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and you'll see the kickback
term in both your readings

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and in your supplemental readings.

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A kickback in healthcare
is an illegal practice

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where one party offers

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or receives something of value
in exchange for a referral

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or recommendation for
healthcare services or products.

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Kickbacks can take many forms.

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They can be cash payments,
gifts, free services,

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other incentives.

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They might be given by
pharmaceutical companies

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or medical device manufacturers
to physicians, hospitals,

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other healthcare providers
as a way to encourage them

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to prescribe or use their products.

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For example, a drug company

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could offer a physician a cash payment

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for each patient they provide
a certain medication to,

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or a medical device manufacturer

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might offer a hospital free equipment

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in exchange for a commitment to purchase

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a certain amount of their products.

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Kickbacks like these are illegal

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under the federal Anti-Kickback Statute,

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which prohibits healthcare
providers from offering,

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soliciting or receiving
any form of payment

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or other incentives in
exchange for referrals

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or recommendations for
healthcare services or products.

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Violations of the Anti-Kickback Statute

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can result in pretty
hefty criminal charges,

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civil penalties,

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and exclusion from participating

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in federal healthcare programs

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like Medicare and Medicaid.

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And you can imagine how
much of a threat that is

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to giant entities, right,

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who might get a lot of
Medicare and Medicaid dollars.

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So another thing you're
gonna see this week

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is physician self-referral practices

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where physicians refer
patients to entities

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where they have a financial interest

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for certain designated health services.

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This might invoke the Stark Law,

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which seeks to prevent
financial conflicts of interest

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that could influence a physician's
medical decision-making

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and lead to the overutilization
of healthcare services.

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Stark Law includes a range of services

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like clinical laboratory,
physical therapy,

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occupational therapy, radiology.

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If a physician refers a patient

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for one of these designated
health services to any entity

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where they have themselves

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or family members have
a financial interest,

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like a physician-owned
practice or hospital

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where the physician has an ownership stake

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can be considered a
violation of the Stark Law.

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Just like other topics above,

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violations of the Stark Law has
pretty big penalties, fines,

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exclusion from participation

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in healthcare programs
like Medicare and Medicaid,

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and potential civil liability.

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It's important for physicians

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to carefully review their
financial relationships

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and any potential conflicts of interest

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when making referrals for
designated health services.

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Usually, these programs are built in

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with larger facilities through compliance,

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and they check for this.

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So we're gonna talk
about a couple of things:

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antitrust, Self-Referral
Law, and the Stark Law.

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And so these are confusing.

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They can be somewhat overlapping,

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and I look forward to seeing your posts

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in the discussion forum.