Striking a balance

As chief counsel to HHS' inspector general, Greg Demske drives the office's enforcement priorities and decisions. He also leads the office's efforts—in talks, advisory opinions and other industry guidance—to explain where the office comes down on an extremely complicated set of laws and regulations intended to scrub fraud and financial conflicts of interest from federal healthcare programs. Modern Healthcare reporter Joe Carlson spoke to Demske after his recent appearance in Chicago at the American Bar Association's conference on physician legal issues. Here is an edited excerpt:

Modern Healthcare: You mentioned the idea that physicians are often not aware of the impact of interactions that they have with industry on their own behavior.

Greg Demske: One of the things we at the Office of the Inspector General are always interested in is the potential for the distortion of medical judgment, when physicians are receiving money from industry, pharmaceutical companies, device manufacturers and others in the healthcare industry. And we have responsibility under the anti-kickback statute to pursue violations of that statute.

The statute really is designed to address several ills including overutilization, steering of patients, lack of competition, but one of the essential things that it tries to get at is the distortion of medical judgment. And there are a lot of payments that could distort medical judgment that don't rise to the level of a criminal or civil or administrative kickback, but may affect a physician's judgment. And there has been a lot of cognitive science and social science over the last 10 to 15 years that shows that physicians, like other human beings, are influenced even by small gifts and amounts of money that they received.

We all have an unconscious desire to reciprocate when we are given things, and the studies show that physicians think that that may affect their peers, but largely don't believe it affects them. And there is a recent study that came out last year that shows that the fact that pharmaceutical companies may be paying a physician reduces the level of trust that patients have in those physicians, and we think that is a serious issue that physicians should consider.

MH: Does that affect your enforcement choices?

Demske: When we are looking at enforcement cases, we are trying to look for the strongest possible cases, and in kickbacks there is a very high burden of proof for the government, so we need to show that there was an intent to steer patients on the part of either party that we are pursuing criminally, civilly or administratively under the statute. There is a lot of conduct that can affect medical judgment that falls short of that criminal behavior, but it still undermines the trust that we have in physicians.

MH: How does the OIG view the issue of how electronic health records can affect, for example, issues of upcoding or use of emergency and management codes?

Demske: First of all, we recognize that electronic health records have opportunities to increase the efficiency of the healthcare system by reducing the paperwork burden on physicians and others in healthcare and providing a better medical record that can be used to improve care. So that's good, and the government is committed to helping the adoption of electronic health records.

At the same time, some of the same attributes of EHRs that allow for efficiency also can allow for gaming the system. Cutting and pasting, using auto-fill templates, things like that that can perpetrate abusive or fraudulent billing in the future. One of the things that we are doing at OIG is taking a look at what those risks are and we are going to be publishing a report on that in the future.

MH: Do you think the laws and the enforcement are evolving quickly enough to account for the challenges that doctors face when they want to collaborate with hospitals and deliver more care that is based on quality, but which requires more cooperation?

Demske: One of the things that we have done with some of the innovations in the Affordable Care Act—for example, accountable care organizations—Congress gave HHS and the secretary the authority to waive certain fraud and abuse laws, like the kickback statute, Stark law and civil money penalties laws. What we tried to do, when we issued that waiver in regulation, is draw the right balance to allow innovation and different payment systems while still trying to protect the integrity of the programs.

We realize there is some risk of abuse when we waive those laws, but we recognize that there has to be room for innovation and we think that's an example where we have given a waiver that gives enough autonomy and ability for the industry to come up with new ways to operate.