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Justice Department Nabs Record $3 Billion From Health Care Fraud Settlements

According to Modern Healthcare, the Department of Justice took in $4.9 billion in collections and settlements through the False Claims Act in fiscal year 2012 — an all-time high, largely bolstered by over $3 billion in collections from health care firms.

The False Claims Act encourages whistleblowers to report fraudulent activities undertaken by private actors against the U.S. government. This past fiscal year, the Justice Department received its highest-ever haul from health care firms engaging in Medicare fraud and pharmaceutical companies promoting drugs for off-label use not authorized by the FDA:

Top among the healthcare settlements in 2012 was GSK’s agreement to pay $1.5 billion in civil remedies to resolve charges, without admitting liability, in allegations that it promoted Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label uses, as well as making false statements about the safety of Avandia and paying kickbacks to doctors to prescribe Imitrex, Lotronex, Flovent and Valtrex.

GSK’s civil payments were part of a $3 billion “global” settlement with federal and state governments that also included criminal fines and pleas and an unusual corporate integrity agreement that changed how the company compensates sales staff and executives.

Also in 2012, the Justice Department reported collecting $441 million to resolve allegations that Merck illegally marketed the painkiller Vioxx, which was pulled from the market in 2004. That settlement, which came without an admission of wrong-doing, was part of a $950 million resolution that involved criminal and civil fines and settlements.

Fraud in government health care programs has been a consistent target of the Obama Administration in an effort to protect consumers and lower wasteful health spending. Doctors regularly overbill Medicare through shoddy, fraudulent procedures such as “self-referring” their patients and “upcoding” the complexity of the services they provide patients in order to reap undeserved profits.

But the biggest settlements from the past fiscal year’s False Claims Act collections stem from pharmaceutical companies engaging in unlawful and misleading drug promotions — a practice that was upheld by a federal appellate court on Monday and may soon head to the Supreme Court.

Why You Shouldn’t Believe The Unfounded Concerns Over Falling U.S. Birth Rates

Lamenting America’s declining birth rate has become a regular ritual among America’s conservative commentators, who see the trend as a threat to the long-term economic sustainability of the social safety net as well as the traditional family structure. The most recent round of concern was kicked off by a Pew Research Center report that found births per 1,000 women of childbearing age hit a record low of 63.2 in 2011. That stat was picked up in a New York Times op-ed piece and subsequent blog post by conservative writer Ross Douthat, with additional encouragement from other commentators who joined in.

In fact, lower birth rates actually correlate with a whole host of positive social and economic trends, such as increased female literacy, increased job opportunities for women, overall national wealth, and women gaining greater control over their own reproduction. So decrying dropping birth rates — especially when it’s conservatives doing the mourning — comes awfully close to pining for past decades when women were far less equal.

But there’s an even more practical issue with this latest round of worries over the “birth dearth” — it’s focusing on the wrong statistic. Douthat’s number comes from the general fertility rate, which calculates annual births per 1,000 women of childbearing age. The Population Reference Bureau explains that the total fertility rate, or “the average number of children women would bear in their lifetimes if the pace of childbearing remained constant for the long term,” is actually a more appropriate measure:

The U.S. population is “older” now than it was in the past—we have more older people than younger people—and that includes a smaller proportion of younger women in the childbearing population than before.

So, when we think about birth rate trends, we should really be using the total fertility rate (TFR). The TFR is “blind”—unaffected by age structure—and in showing the implied number of children women would have at today’s rate, is directly comparable over the years: apples to apples. This may be a tad confusing, but consider this: If the pace of childbearing were the same today as it was in 1976, the U.S. would have had 3.7 million births instead of the 3.9 million it did have.

And 1976, not 2011, is when the total fertility rate hit its lowest point. It’s been on a steady rise since, arguably clearing the “replacement rate” — the level needed to keep the U.S. population from declining — in 2006. It dropped again in response to the recession, but that’s a typical and temporary reaction to hard economic times.

Even using the total fertility rate to calculate birth rates may be low-balling it. The best the TFR can do is anticipate how many children an average woman would have as she passes through all the years of her reproductive life, using the current rates of U.S. births for those various stages. But if more and more women have delayed childbirth over the last few decades, shifting the birth rate’s center of gravity to older women, then actual birth rates will be higher than what the TFR anticipates. In recent years, in fact, that’s exactly what’s been happening:

Olive Garden Suffering From Bad PR After Anti-Obamacare Comments

Darden Restaurants, Inc. — owner of Red Lobster and Olive Garden — is battling back negative press attention in light of its October announcement that the company will use Obamacare as a reason to shift to part-time employees.

On Tuesday, the company released a statement revising down its prediction of profits, which led to a huge drop in stocks. Darden attributed the change to the negative attention around its stance on Obamacare, and promised to deal with the health care reform law “in ways that work for our employees“:

“In light of these upcoming changes, we are being cautious about our sales and earnings forecast for the full year,” [Darden's Chairman and Chief Executive Officer Clarence Otis] continued. “Our outlook for the year also reflects the potential impact, though difficult to measure, of recent negative media coverage that focused on Darden within the full-service segment and how we might accommodate healthcare reform.” [..]

We are also committed to accommodating healthcare reform in ways that work for our employees and guests. Darden is a strong business which continues to generate solid cash flows that will support appropriate reinvestment in our brands, effective debt management and consistent dividend growth.”

Under the Affordable Care Act, any business with 50 more full-time workers is required to offer a health care option to its employees by 2014. If a company chooses not to, and its workers instead seek subsidized care in the public exchanges, the company must pay a penalty.

Darden is one of several companies threatening to fire employees, switch workers to part time, or freeze hiring because of the health care law. One Applebee’s franchise owner, the CEO of Papa John’s Pizza, and a Denny’s franchise CEO have made similar threats.

In addition to potentially earning those companies bad press, their complaints about the health reform law are off-base. In reality, Obamacare will, over time, decrease health care costs. It will also likely lead to more satisfied workers, competitive hiring, and higher rate of employee retention.

Update

AP is reporting that, in an effort to stem the negative attention, Darden will announce Thursday that they will not be moving any workers to a part-time schedule because of Obamacare. The company is, however, keeping the option open of relying more heavily on part-time employees in the future. Ultimately, reports a Darden spokesman, they tested a shift to part-time staff and found a decline in satisfaction all around:

After Darden’s tests were reported in October, the company received a flood of feedback from customers through its website, on Facebook and in restaurants, said Bob McAdam, who heads government affairs and community relations for Darden. Additionally, he said that internal surveys showed both employee and customer satisfaction declined at restaurants where the tests were in place.

“What that taught us is that our restaurants perform better when we have full-time hourly employees involved,” he said… McAdam declined to give specifics on the internal surveys but said the decline was “enough to make a decision.”

POLL: Key Voters Rejected Romney Because Of His Far-Right Stance On Women’s Health Issues

Early exit polling from last month’s presidential election suggested that majorities of voters in key states support legal access to abortion services, and a new poll released today confirms that women’s health issues were a decisive factor in helping voters decide between President Obama and Mitt Romney.

Post-election polling conducted by Hart Research Associates and Lake Research Partners found that the GOP’s positions on women’s health issues — particularly in regards to eliminating funding for Planned Parenthood, banning legal abortion services, and restricting access to affordable birth control — likely cost them the White House. The poll results confirm that more than 60 percent of all voters disagreed with Romney’s position on each of those major reproductive health issues, and women voters had even higher rates of disapproval.

And when voters were asked how much the presidential candidates’ positions on those issues influenced their vote, they confirmed that women’s health issues were likely to be a deciding factor in casting a ballot for Obama. Nearly 50 percent of voters said that they were much more likely to vote for Obama based on his position on abortion access, whereas just 28 percent said that Romney’s position on the subject swayed them in his favor. Independent voters preferred Obama’s abortion stance by 30 points:

Despite the fact that many GOP politicians attempted to brush aside women’s issues to focus on the economy — as if access to reproductive health services is somehow a narrow special interest that doesn’t also have a significant impact on women’s and men’s economic realities — voters were, in fact, swayed by learning more about the candidates’ stances on abortion, birth control, and Planned Parenthood. Poll results show that 64 percent of all voters saw, heard, or read something during the lead-up to the election about Romney’s goal to strip funding from Planned Parenthood, and 55 percent of voters similarly learned about Romney’s desire to overturn Roe v. Wade.

Virginia Gubernatorial Candidate Called Safe Sex Fair ‘Soft Porn,’ Sought To Censor It

Virginia Attorney General Ken Cuccinelli (R)

Virginia Attorney General Ken Cuccinelli (R)

Virginia Attorney General Ken Cuccinelli II (R), the state Republican Party’s apparent choice for governor in 2013, claims he is “best known for his efforts to preserve liberty and defend the Constitution.” But in 2005, he used his position as a state Senator to try to censor a university sexual education event he felt was “pushing a pro-sex agenda and an anything goes agenda.”

In 2005, a pro-choice student group at George Mason University organized its inaugural “Sextravaganza” event — a campus sexuality and health fair aimed at teaching attendees about practicing safer sex and preventing unplanned pregnancy. For this event, the group organized 15 booths to provide “information on abstinence, condoms and self-help exams, as well as sexual orientation.” An array of views were presented to approximately 500 attendees: a minister from the Campus Catholic Ministry staffed one of the tables promoting abstinence and opposing abortion, while others promoted abortion rights and provided information about safer sex.

Sen. Cuccinelli, however, was outraged that his alma mater — a public state university — would host an event he believed “really just designed to push sex and sexual libertine behavior as far, fast and furiously as possibly.” Among Cuccinelli’s objections to the event:

  • Upset that information about sexuality — other than abstinence only — would be presented to adult college students, he said it was symptomatic of the “moral depravity that has crept across this commonwealth and this country.”
  • Upset that the event was sponsored by the Pro-Choice Patriots, he said, “They’re selling their product. They are selling abortions.
  • Upset that the GMU Pride Alliance presented information on sexual orientation, he said, “You can’t have safe homosexual sex. There is no such thing and yet one of the sponsoring groups is the homosexual group on campus.”
  • Upset about an (ultimately scrapped) plan to raffle off sex toys at the fair, he said the event would “push every form of sexual promiscuity there is out there.”
  • Upset that some of the advertising for the event was paid for out of student activity fees, he said, “”This is a how-to fun fair for sex. This isn’t education. This is pushing sex. It’s encouraging it… It doesn’t swell me with pride to see my alma mater putting on a soft porn show.”
  • Upset that “aphrodisiacs” including Hershey’s Kisses, cucumber slices, strawberry Jello-O, and oyster crackers were given out at the event, Cuccinelli, Black, and three other Republican legislators wrote to the GMU’s president, “We appropriated $33.1 million in FY 2005 to treat STDs and AIDS. We are concerned that the frivolous manner in which human sexuality is being treated here with GMU approval is counter productive to the best interests of Virginia citizens.”
  • Upset that presenters encouraged attendees to properly use condoms to “protect” themselves, he took use with that term, calling itfactually incorrect,” because “condoms do not stop HPV or Herpes.”
  • Upset that attendees were invited to lobby for increased federal funding to fight sexually transmitted diseases, he dismissed the idea that “funding offers any kind of solution to the significant consequences of voluntary behavior.”

Cuccinelli maintained the event would disgrace the school, warning that Virginia government might need to “establish some statewide standards” to prevent this and similar events at other public colleges and universities. But the university’s administration emphatically rejected suggestions from Cuccinelli and then state-Delegate Dick Black (R) that they cancel the event. The chief of staff to the president of GMU called Sextravaganza 2005 “as well an organized and delivered student event as we’ve had on campus,” and it was repeated in future years.

How did Cuccinelli square his efforts to censor the event with his professed desire to “preserve liberty?” He told Bacon’s Rebellion, a Virginia blog, “in the realm of morality, freedom is not the right to do whatever you want (license), it is, in fact, the ability to do as you ought (self control).”

How An Obamacare Provision Has Saved Americans $1.5 Billion On Their Health Benefits

A new report from the Commonwealth Foundation finds that Obamacare’s “medical loss ratio” provision — the so-called “80/20 rule” requiring insurers to spend at least 80 percent of every Americans’ premium costs on patient care, rather than on their own profits or overhead — has resulted in a total of $1.5 billion overhead savings and insurance rebates to Americans since its implementation in 2011.

As a press release from the Commonwealth Fund explains, those rebates mostly went to individual policyholders, who are now paying lower premiums since the requirement has forced insurers to reduce their overhead costs and profit margins:

The authors find that in the individual insurance market, improvements were widespread: 39 states saw administrative costs drop, 37 states saw medical loss ratios improve, and 34 states saw reductions in operating profits. Some states stood out for significant improvements. In New Mexico, Missouri, West Virginia, Texas, and South Carolina, medical loss ratios improved 10 percentage points or more, while administrative costs dropped $99 or more per member in Delaware, Ohio, Louisiana, South Carolina, and New York. [...]

The authors note that while insurers in the individual market have a less stringent medical loss ratio requirement—80 percent, as opposed to 85 percent in the large-group market—their traditionally higher overhead costs and lower medical loss ratios mean they have to work harder to reach the new standard. As a result, these insurers lowered both administrative costs and profit margins, therefore reducing growth in premiums.

While small- and large-group plan holders did not enjoy rebates to the same extent as their individual policy-holding counterparts, these larger plan providers still successfully lowered their overhead costs. And the study only addresses savings stemming from current policyholders over the course of the last year. As Obamacare is fully implemented in 2014 and states set up insurance exchanges where Americans may purchase individual coverage, an increasing number of people will benefit from the savings resulting from the 80/20 rule.

The Commonwealth study’s findings confirm earlier predictions about the cost-saving effect that Obamacare’s medical loss ratio provision would have on American consumers.

Oklahoma Supreme Court Strikes Down Restrictive Abortion Legislation

Oklahoma’s highest court ruled on Tuesday that two of the state’s new abortion restrictions are unconstitutional, ensuring that the anti-choice laws will not take effect.

A lower court in Oklahoma had already issued an injunction against the laws, and this ruling reaffirms that decision. According to Oklahoma’s Supreme Court justices, both pieces of legislation — one that would impose mandatory ultrasounds on women seeking abortions, and one that sought to ban off-label versions of abortion-inducing drugs like RU-486 — are in direct contradiction to women’s constitutional right to legal abortion services under Roe v. Wade:

“Because the United States Supreme Court has previously determined the dispositive issue presented in this manner, this court is not free to impose its own view of the law,” the Oklahoma Supreme Court’s opinions state.

“The Oklahoma Constitution reaffirms the effect of the supremacy clause on Oklahoma law by providing, ‘The state of Oklahoma is an inseparable part of the federal union, and the constitution of the United States is the supreme law of the land.’”

This is not the first time this year that Oklahoma’s Supreme Court has rejected a state-level abortion restriction for standing in sharp opposition to Roe v. Wade. Just over a month ago, the court ruled that proposed “personhood” initiative — part of the far-right effort to endow fetuses with the full rights of U.S. citizenship by redefining personhood at conception, which would serve to outlaw all abortion services and even some forms of contraception — are “clearly unconstitutional,” pointing out that such an initiative would go too far to restrict a woman’s right to choose.

The Center for Reproductive Rights, the women’s health advocacy group that filed the legal challenges to both of the state laws, is celebrating the court’s clear protection of women’s constitutional rights. Michelle Movahed, one of the group’s attorneys, told the Oklahoman that the court’s decision may help Oklahoma lawmakers reconsider their approach to abortion legislation. “I hope that the Oklahoma Legislature does take a lesson and turn to subjects that won’t involve clear violations of the Constitution,” she said.

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