🔒Government must curb its healthcare involvement

The lead editorial in the Aug. 18th edition of the Wall Street Journal (“The Aetna Mugging”) tells a tale of two foreseeable phenomena: The Affordable Care Act (ACA) is failing to deliver as promised, and insurance companies are going to be in the line of fire as the blame game begins.

In Aetna's case the stage is set like this: The Hartford insurer is withdrawing from ACA exchanges where it has lost $430 million since 2014 — while simultaneously fending off the Justice Department's attempt to block its merger with Humana (intended to increase efficiencies, decrease losses and enable it to stay on more exchanges). While Aetna's business and legal issues are challenging, the politics will be worse, as presaged by Massachusetts Sen. Elizabeth Warren's barbed comment about the hot seat Aetna occupies.

She said: “The health of the American people should not be used as a bargaining chip to force the government to bend to one giant company's will.”

My interpretation of the situation is that we are seeing what happens when traditional and sound business decisions (avoiding losses, merging and defending your turf in court), run into political expectations about how much health care the federal government can deliver or make available to the people — directly (Medicare and Medicaid) or indirectly (pressuring providers and insurance companies).

The traditional business approach is based on the notion that a “doctor's visit” represents a private economic exchange of value between a patient and a provider with insurance absorbing financial risk. On the other hand, the case for government involvement is increasingly based on the notion (advanced by President Obama since 2008) that affordable health care is a civil right that the government (as the creator or guardian of rights) stands ready to enforce — to the extent of vanquishing any “giant company” standing in the way.

The two approaches are like oil and water.

From the traditional perspective, Aetna's $430 million loss is a bad business outcome; from the second it is a redistribution of wealth from Aetna's shareholders to the failing exchanges. As the post-election Congress and new president grapple with this predicament, my observation is that federal involvement in health care over the past 50 years has expanded past a point of diminishing returns; and my suggestion is that we will end up in a better place if we ratchet back both the government's involvement and the political grandstanding about what it can actually deliver.

My suggestion is not based on theoretical principles, or the opinions of healthcare policy experts, but on something more humble to which I can bear personal witness: Government involvement has created an enormous self-perpetuating bubble of legal complexity populated with healthcare lawyers (a relatively new specialty), consultants, lobbyists, experts and administrators (on both the government's and the provider's side of the tables) who spend their working hours duking it out over the meaning of obscure regulatory terms, pondering the clinical necessity of services rendered, making sure each clinician's touch of a patient's body is properly coded, and the like seemingly ad infinitum.

After watching this complexity in motion I am convinced that German philosopher Friedrich Nietzsche was right when he said that the commonest form of stupidity is to forget what we are trying to do in the first place (provide clinical care).

Anyone who thinks I am inflating a bubble of my own should read the May 2016 decision of the U.S. Court of Appeals in Caring Hearts Personal Home Services v. Burwell (the Center for Medicaid and Medicare or CMS). The law allows providers to bill Medicare for “reasonable and necessary” expenses of “homebound” patients. CMS claimed that Caring Hearts overbilled Medicare $800,000 in 2008 because patients were not “homebound” (such as an 85-year-old, 352-pound man with “diabetes, high blood pressure, and a host of other ailments … who by all accounts could not easily walk 20 feet”); or because the services were not “reasonable and necessary” (such as the physical therapy provided to a 71-year-old woman with diabetes, degenerative joint disease, chronic pulmonary disease, and uncontrolled pain in her lower back, hips and right leg.”)

Let me paraphrase what the court said as it threw CMS out the courthouse door: The federal rules had “grown so exuberantly it's hard to keep up,” that “no one seems sure how many more hundreds of thousands (or maybe even millions) of pages of less formal policy manuals, directives and the like might be found floating around,” and that CMS issues “thousands of new or revised guidance documents (not pages) every single year,” of which 37,000 (not a complete inventory) “can be found on the CMS website.” But even worse, CMS got lost in its own forest because it “applied the wrong regulations” to Caring Hearts. The $800,000 assessment was based on rules that were “but figments of the rulemakers' imagination” in 2008 and did not become effective until years later.

At the end of the decision the court noted that “[t]his case has taken us to a strange world where … the agency responsible for promulgating the law … seems unable to keep pace with its own frenetic law making.” I plan to send the court a copy of this op-ed to let it know that this strange new world floats comfortably with the enormous self-perpetuating bubble of legal complexity first mentioned above.

John M. Horak has practiced law at Reid and Riege P.C. in Hartford since 1980. His opinions are his own.