Politics / Press Releases

AMAC Calls For Repeal of the Medicare Anti-Kickback Safe Harbor Statute

medicare repeal kickbackSeniors pay more for drugs because of this loophole

WASHINGTON, DC – The Association of Mature American Citizens [AMAC] has issued a call for its members and other concerned seniors to press their lawmakers, on both sides of the aisle, to repeal the Medicare Anti-Kickback Safe Harbor Statute.

AMAC president Dan Weber argues that “the law can permit criminal behavior by Group Purchasing Organizations [GPOs] for which seniors pay the consequences.”  And he promises that the association will call on members of Congress to investigate credible charges of abuse and seek repeal in face-to-face meetings.

“There is evidence that the law’s intended purpose has been deliberately distorted.  It was enacted purportedly to lower the costs of health care devices and medicines, particularly those critical to the health of seniors, by outlawing kickbacks.  But instead of lowering costs, there’s sufficient reason to believe the safe harbor statute is being abused.  And, as a result, it has caused the prices of medical services and products to increase by tens of billions, if not hundreds of billions of dollars, over the past three decades,” says Weber.

Andrew Mangione, an AMAC vice president and an authority in the field of healthcare, recently exposed “the dirty little secret” that GPOs have been hiding in an opinion article he wrote for Townhall.  The first hospital GPO was established more than a century ago and provided a valuable service by purchasing supplies in bulk for member institutions.  It saved money for hospitals and their patients.

Things changed drastically in 1987, according to Mangione, “after Congress enacted a Medicare kickback ‘safe harbor,’ which exempted GPOs from criminal prosecution for taking kickbacks from healthcare suppliers.  The safe harbor was implemented in 1991 allowing vendors, not hospitals, to pay GPO administrative expenses.  The GPOs’ mission abruptly changed from reducing medical supply costs for hospitals to essentially becoming an agent of vendors.”

The patient advocacy group Physicians Against Drug Shortages says what happened next is that “GPOs no longer cared about saving hospitals money.  Their goal now was to maximize fee (a.k.a kickback) revenue.  And because GPO fees are based on a percentage of sales volume, the higher the price of hospital supplies, the more fees GPOs collect.  These perverse incentives gave rise to a system in which vendors compete for exclusive GPO contracts based not on who can supply the best product at the best price, but on who can pay the highest fees.  In effect, vendors buy market share from the GPOs for exclusive access to their member hospitals.  The more they pay, the more market share they receive.  As a result, many vendors favored by GPOs enjoy monopoly status.”

Weber says there has been little or no oversight by Congress of the safe harbor law.  “We should all be outraged and call for a serious and thorough investigation and demand accountability.  It’s been nearly 30 years since the law was put into effect and no one in authority has come forward to give it a thumbs-up, perhaps because it deserves a decisive thumbs-down.  It’s about time we learn the details.  Hospital GPOs control more than $300 billion of spending on drugs and medical devices.  At a time when medical costs are causing hardships for too many of our nation’s elderly citizens, is it too much to ask for a responsible audit of how that money is being spent?”


The Association of Mature American Citizens [AMAC] [http://www.amac.us] is a vibrant, vital senior advocacy organization that takes its marching orders from its members.  We act and speak on their behalf, protecting their interests and offering a practical insight on how to best solve the problems they face today.  Live long and make a difference by joining us today at http://amac.us/join-amac.

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2 years ago

Safe harbors? … The only people with “safe harbors” are the Pharmaceutical Companies AND their criminal cohorts, the Doctors who should be reclassified as “legalized drug pushers”. If you were to take the next 30 largest populated countries in the world, the good old US of A USES 80% MORE DRUGS than ALL those 30 countries combined!!! … Oh, and let’s not forget their partners in this crime, OUR ELECTED REPRESENTATIVES who have gotten extremely wealthy at the expense of the populace, especially the seniors. … We’ll NEVER BE ABLE TO DRAIN THE SWAMP as long as our elected representatives… Read more »

Sallie Pershing
2 years ago

Thank God for President Trump! At least we have a person who is doing something. He doesn’t need the job, absolutely doesn’t need the money, and he just doesn’t care about the ‘fake news swamp.’ At least we have a chance of change. He is unconventional and will not go by the rules of the politicians’ good old boy network. We finally have a reason to be optimistic. He did say that he wants to do something about the drug issue. He’s done something about everything else he discussed when running for president.

2 years ago

All you citizens out there, let’s not forget that our government is “OF THE PEOPLE, FOR THE PEOPLE and BY THE PEOPLE” If anything is to be changed let’s not forget election days. Elections are also great for passing of mandates. WE THE PEOPLE CONTROL OUR DESTINY not the elected officials. Remember THEY ARE SUPPOSE TO REPRESENT US NOT THEMSELVES.

2 years ago

AMAC should make it easy for its members to contact their Senators and Congressman in such instances by adding a hyperlink to those representatives..

Floriana Huczek
2 years ago

This is outrageous! No wonder I paid over $3,000 out of pocket for medication aside from the outrageous prices for supplemental insurances. Agree changes need to be made. Greed has no place in the mediCal field especially when so many personS do without and others make great sacrifices to pay for their meds.

R French
2 years ago

Just notice as you’re watching ANY television programming; with each and every commercial break, there is AT LEAST one drug commercial during that break. What a pill-popping nation! One just does not see this on European television. Pharmaceutical companies in the USA are making a killing off us seniors. Governmental control is welcome in some situations. Citizens over 65 will be the majority in this country before to long. Let’s take over the swamp!

2 years ago

Agree with R French, tv commercials are over the top, the pharmaceutical companies are getting away with madness at the expense of our lives. Time to band together and stop this non sense. This includes the Washington crowd.
It is too bad that the swamp is taking so long to drain, but there is so much sludge there is trouble finding the drain and that is both sides of the isle that are making it so.

Disruptive Element
2 years ago

Make a law or a rule and someone will figure a way around it. Terminal jurisprudence.

Jan Young
2 years ago

I am all for repeal of this Medicare Anti-Kickback Safe Harbor Statute. Us older folks are always getting the short end of the stick and congress thinks our money can be used wherever they want to use it!

2 years ago

maybe people should get a life rather than plan their lives around their doctor visits-then costs would come down

Howard Livingston
2 years ago

I opted out of Medicare months ago, And yet they are still taking premiums from my retirement benefits, causing me a financial hardship, They forged my signature, and are fraudulently claiming I have enrolled. My religious freedom is being denied by forcing me to financially participate in a system I never wanted or believe in.

2 years ago

I love your organization! I am a senior on disability & although my Rx ‘s are sometimes (in the past)too expensive for me to afford…I was totally unaware of the reasons why. Thank you for being there for us right wingers!??

Maria Rose
2 years ago

They are even showing this kind of abuse billing on one of the new TV shows ( The Resident) where unnecessary tests are applied to a patient to increase profits regardless of need of patient or choice. ( especially costs not covered by insurance so hospitals can sue patients to cover the costs)

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