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Association
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Volume 54, No. 4 April 1998
RIGHTS - USE THEM OR LOSE THEM
Government benefits are not supposed to be automatic: one must apply for them. One jumps through hoops to get the benefits. Why should one have to run an obstacle course to escape from a "benefit" (and its attached strings)?
The default option should logically be that a person is not eligible to receive taxpayer largesse, rather than the opposite.
The Kyl-Archer bill (S. 1194, H.R. 2497) itself shows how backward our perceptions have become. It's supposed to have a liberating effect. However, to take advantage of the bill a person would have to enter a written contract, detailing services to be received, and have the services reported to HCFA. Citizens not eligible for Medicare need not have such legalistic formal arrangements in order to receive private medical care. Moreover, the bill does not apply to "emergency" services, unless a contract was signed prior to the emergency. An analogous provision would invalidate agreements made with a lawyer after a person was arrested or sued.
The Kyl-Archer bill was heard before the Senate Finance Committee on Feb. 26 (see enclosed summaries of testimony). In the view of AAPS observers, the witness list was stacked against private contracting, and the focus was directed to inaccuracies in the United Seniors Association lawsuit and direct-mail campaign. One of their key arguments is that under §4507 of the Balanced Budget Act, seniors will not be able to obtain "screening" (as opposed to "diagnostic") tests for prostate cancer, or other desired but "unnecessary" services, because their doctors have not opted out of Medicare.
Not so, asserted HCFA. "If Medicare doesn't cover a service, no private contract is needed." For services that might or might not be covered, Administrator DeParle said physicians should file an "Advance Beneficiary Notice" or ABN.
Physicians may fear to order such tests or to file ABNs because a "pattern" of ordering "unnecessary" services could lead to severe punishment, argued United Seniors representative Kent Masterson Brown. This point seemed to be lost in the Senate hearings, and the outcome in court is not yet known.
Testimony by the various witnesses showed persistent confusion about the legal status of private contracting both before and after the Balanced Budget Act was passed. And Medicare carriers continue to issue statements that are inconsistent with each other or with the plain language of the statute. AAPS has sent certified letters to DeParle concerning the question of whether Medicare HMO patients may freely purchase services outside their HMO. Additionally, we have inquired about carrier instructions for letters to patients, which assert that opted-out physicians are bound by Medicare price controls. These instructions are in direct conflict with §4507. Replies have not yet been received.
HCFA has issued a number of statements to the effect that certain services (routine physicals, cosmetic surgery, etc.) are either "not covered" or that HCFA will not interpret the law so as to apply to them. Contemplated lawsuits, such as a challenge by one of the 1.5 million Americans who choose not to enroll in Medicare Part B, will probably not be brought because of such assurances: a court could determine that a challenge is not ripe or that a plaintiff does not have standing.
Administrative, legislative, and judicial remedies all appear dubious at present. Reliance on the pronouncements of HCFA officials is dangerous as they do not have the force of law. The Kyl-Archer bill is unacceptable as currently written; modifications later in the legislative process could make it still worse. It is unlikely to pass with a veto-proof majority in any form. Litigation is a consideration, but the shifting legislative situation makes it difficult to formulate strategy.
In our assessment, this battle will only be won in the field, by patients and physicians exercising their rights. Until Congress passes a law repealing Sections §1801-1803 of the Social Security Act and stating that Americans, if eligible for Medicare, lose their right to purchase private medical services, there is no clear statutory prohibition against receiving or providing private (non-government funded) medical care. Congress probably will not enact such a clear prohibition, especially now that it has seen the outrage caused by §4507. If it did so, the law would be clearly unconstitutional.
It is the eagerness of physicians and patients to collect "their piece of the pie" (or cake) that makes it so easy for HCFA to win by intimidation. As the late Dr. R.S. Jaggard said, "When you hold out your hand to take the money, that's when they snap the handcuffs on your wrist." It is the doctor's signature on the HCFA 1500 (or worse, the Medicare Participation Agreement) that gives HCFA its power, and by which he arguably waives all his rights. If HCFA starts requiring physicians to apply for the status of Medicare provider and pay a user fee, those who do so will voluntarily place themselves under HCFA's jurisdiction.
If Congress really wanted to rein in HCFA's abuse of power, the first step would be a simple law that stated "services may be eligible for Medicare coverage only if a claim for reimbursement is filed." Then those who cared about patients not being able to collect their benefits should repeal the requirement that physicians file the claims (patients could do so until 1990). The person filing the claim is the one subject to the rules concerning reimbursement. (For Medicare to set fees is illegal under §1801.) If that is too stingy, the beneficiary's complaint is with HCFA and the taxpayers, not his physician.
Unless a few principled men and women exercise their rights and turn down the loot from legal plunder, the march toward socialism will continue to its inevitable conclusion.
Self-Managed Doctors
California, long the state most heavily infested with managed care, may be coming full circle. With the active support of the California chapter of AAPS, traditional practice associations are springing up around the state, modeled on the Independent Doctors Traditional Practice Association of the South Bay (INDOC), founded by Thomas LaGrelius, M.D., a family physician in Torrance, CA. Dr. LaGrelius reports:For years, physicians have left traditional private practice and joined HMOs and PPOs because they were unable to compete with the networks of physicians and hospitals vigorously marketed by managed-care plans. Independent doctors and patients seeking non- managed care had great difficulty finding each other.
Californians are fed up with managed care. The perceived quality of care in hospitals involved in managed care has been falling. Additionally, many HMO patients now have "point of service" options and are seeking affordable alternatives to the care foisted on them by their employers. They too do not know where to go. INDOC was created to fill this need.
INDOC is a nonprofit, mutual benefit corporation. Still growing, the organization has about 80 members representing most medical fields. All efforts and funds are directed to promoting the private, unmanaged practices of our members. The public media has received us favorably, and the local cable TV outlets broadcast interview segments for us without charge. Member lists and biographical information are available at our web site (www.indoc.com). Funding sources include pharmaceutical companies (such as Glaxo and Astra-Merck) and Medical Savings Insurance (telephone 888-MY-OWN-MD).
Four classes of membership are available, representing greater or lesser levels of involvement with managed care. Those few members who belong to an HMO are committed to exiting entirely from this arrangement by January 1, 2000. All members must be board certified, have a good malpractice history, and provide direct patient care. They must have a private, independent practice.
An exciting development is the impact that this small organization is having on our local 1000-physician community. We are on our way to gaining control of a small but excellent hospital which will have very limited or no HMO involvement. Doctors are avoiding HMOs or resigning from them in order to join INDOC. The incentives are shifting in favor of private medicine. If the idea spreads, the red tide of managed care, once considered unstoppable, could be rolled back.
To start such an organization, you need one or two doctors who know the local community and can identify excellent private physicians to form the nucleus of the group. These doctors will have a lot of work to do initially, but their own practices will benefit rapidly due to improved marketing.
For additional information, contact CAAPS at (415)759-7695, or INDOC at (310)214-9921.
Arizona and Others Reject AMAP
On March 3, AMA officials William Jessee, M.D., and Randolph Smoak, M.D., met with representatives of the state and county medical societies in Arizona to "discuss implementation of the American Medical Accreditation Program (AMAP) in Arizona." The message conveyed forcefully by James Angiulo, M.D., Past President of the Pima County Medical Society, was that Arizona was not interested in implementing AMAP. He felt that resolutions introduced by the Arizona Medical Association were abundantly clear:"Resolved: that the AMA Board of Trustees strictly limit AMAP to providing only credentialing services and only in those states which specifically request those services;...and that the AMA Board of Trustees not allow AMAP to include involvement in local medical issues including but not limited to environment of medical care, physician office site visits, physician compliance with practice parameters, and evaluation and/or verification of physician competence."
Another resolution stated: "Resolved: that further development, marketing, and implementation of the AMAP program be ceased [sic.] until a report is issued and reviewed by the House of Delegates."
Nationwide FAX alerts may have given physicians the idea that Arizona had changed its position.
Jane Orient, M.D., Vice President of PCMS, asked the rhetorical question of how the American Bar Association would expect to be received in a room full of lawyers if it suggested that lawyers had to periodically open their files to reviewers, who would pass judgment on such issues as whether they settled or appealed too many cases.
A survey of all state medical societies and about 200 county and specialty societies has yielded few responses to date. So far, four are in favor, five opposed, and four have no opinion. If you would like a copy of the survey to bring to your society, call (800)635-1196; or it may be downloaded from our web site.
A Message from the Grassroot Grannies
To the tobacco factories: Shut your doors! If the government can shut down, so can you. Then everyone will be on your side too. You can't fight bureaucracy, so don't try. Let them come to you, asking for the things you provide: tax money, jobs, and something that a lot of people want.Of course, everybody knows, or should know, that tobacco use may shorten your life. So do many other things; but with them it's a matter of choice. Your product is being used as the pretext to limit our freedom and our private property rights. The only way to stop that is for you to take it away from them. When there's a big hullaballoo, you have the perfect answer for them. And it's not "the devil made me do it." The government says it wants everyone to quit smoking, and "we're only trying to help."
Arizona AAPS Files FOIA Requests on Kid Care
Arizona is rushing to grab its share of federal dollars to add to tobacco tax funds for KidCare at a mere four times the cost of private insurance. The state has been "chosen" to demonstrate the "reinvention" of public health, with the aid of a grants from the Kellogg and the Robert Wood Johnson Foundations. The chapter has filed FOIA requests to research a possible connection."State Freedom of Information Acts are a little-used but very powerful tool," stated AAPS Counsel Andrew Schlafly. For sample letters and general guidance, visit our web site.
AAPS Calendar
May 30. Board of Directors, Hyatt-Regency at DFW AirportOct. 9-11. 55th annual meeting, Raleigh, NC
AAPS Litigation
AAPS v. Clinton. As expected, the defendants have filed a notice of appeal from Judge Lamberth's order to pay AAPS attorney's fees under the Equal Access to Justice Act, as sanctions against misconduct by defendants and their represen- tatives. Interestingly, Ira Magaziner has filed a separate appeal.E&M Documentation Guidelines. The AAPS Board of Directors has decided to file a lawsuit challenging the new Evaluation and Management (E&M) documentation guidelines on both statutory and constitutional grounds. Members will receive a letter concerning this issue; in fact, some will receive more than one copy because there is no way to delete current members from mailing lists obtained elsewhere. If you receive a copy of a recruitment letter from us, please pass it along to a colleague and urge him to join us.
A Memorandum of Law on this subject, prepared by Andrew Schlafly, may be downloaded from our web site.
The American Health Legal Foundation has voted to fund the litigation. Your tax-deductible contributions will be greatly appreciated!
Criminal Fraud Case Dismissed
Criminal charges of mail fraud and CHAMPUS fraud based on alleged miscoding by a busy family physician were recently dismissed, and the case referred to the civil enforcement division. This case was described in the August, 1997, issue of AAPS News. It is quite unusual for a prosecutor to drop a case that had already proceeded this far. The active support of the physicians' local colleagues and the national attention focused on the case probably helped.
Retroactive Fee Determinations Upheld
On Feb. 24, the U.S. Supreme Court upheld the decision of the Eighth Circuit in the case of Regions Hospital v. Shalala (96-1375), ruling that a 1990 reaudit of Graduate Medical Education reimbursements for 1984 did not constitute an impermissible "retroactive rule." This reaudit computed an average per-resident amount of $49,805 in contrast to the original $70,662, and a new total of $4.9 million compared with an original $9.9 million. The new basis was used to compute reimbursements for future years was well as past years within a three-year window.A prescription "is not made retroactive merely because it draws upon antecedent facts for its operation," ruled the court.
The Secretary, after missing a congressional deadline by three years, realized "tardily" that the hospital's reimbursement for 1984 was "inconsistent with reasonableness standards."
In a dissenting opinion joined by Justices O'Connor and Thomas, Justice Scalia wrote that the Secretary's assertion that Congress gave her authority to make a whole new baseline assessment made no sense according to usual guidelines of statutory construction.
"We are not governed by legislators' `overriding purposes,' however, but by the laws that Congress enacts. If one of them is improvident or ill conceived, it is not the province of this Court to distort its fair meaning (or to sanction the Executive's distortion) so that a better law will result. The immediate benefit achieved by such a practice in a particular case is far outweighed by the disruption of legal expectations in all cases-disruption of the rule of law-that government by ex post facto legislative psychoanalysis produces."
The Midnight Knock on the Door
"Once they start going to people's houses at night, that's serious," stated attorney Mike Mustokoff of Philadelphia, in an article on how to prepare your employees for an investigators' visit to discuss upcoding (Medicare Compliance Alert 2/23/98).Other compliance notes:
The Inspector General has released guidelines for a "voluntarily developed and implemented" compliance program for hospitals. The guidance imposes a duty on plans to disclose to enforcement authorities, within 60 days, any conduct that it has reason to believe "may violate criminal and/or admini- strative law." There is no de minimus standard. The text of the guidelines and analysis are published in BNA's Health Care Fraud Report 2/25/98.
The AMA has released a compliance plan for physicians' offices. Federal sentencing guidelines give a substantial break to "providers" who have such a plan. However, if you have one and fail to follow it, you could be nailed for that (Medicare Compliance Alert, 12/1/97, (888)287-2223).
What Should Doctors Do?
Physicians should face facts: It is impossible to comply with Medicare regulations. Not even HCFA knows what they are. Bureaucrats can make them up retroactively, without regard to the actual statute. What physicians should concentrate on is doing the right thing. Is it possible to do the right thing while taking the government money? If you think not, here is a Twelve Step program for withdrawal:1. Don't sign any new agreements with HCFA (such as the EDI contract), especially without reading the fine print.
2. If you have signed a participation agreement, withdraw from it at the earliest possible date.
3. If you are not contractually bound to do otherwise, file only unassigned claims. If the carrier sends you money by mistake, send it back and demand to have the error corrected.
4. Educate your patients about the Medicare Cake Walk (probably impossible if you are taking Medicare money).
5. Educate your patients about the specific effects that Medicare has on their ability to obtain the best care. Never, ever cover for HCFA!
6. Calculate the overhead and the unfunded liabilities incurred every time you file a Medicare claim (and the savings and peace of mind from not filing claims).
7. Educate your partners, your family, and colleagues.
8. Specialize in non-covered services. Keep the costs reasonable. (You're under patient-guided price controls.)
9. Wean yourself from dependence on government or third- party money: cut overhead, don't buy that expensive computer system, and pay off your debts.
10. Try new things, like evening or weekend hours.
11. Consult our LLCS if you want advice about officially opting out of Medicare.
12. Ask yourself: "What if I just do it?" Could there possibly be a law that forbids you to refuse government money while continuing to serve those who ask for your help? Could such a law be either constitutional or enforceable?
If a doctor is punished by Medicare, will it because of the money that he didn't take?
Members' Page
Dear Medicare Program Education and Training Unit: I would address this letter to a real live person, but as is typical of bureaucratic unaccountability in the Medicare program, no person bothered to sign the letter written to me.Thank you for reminding me that I am a Non-Participating Physician. I am particularly proud of that status and most certainly intend to continue it. Since you have been so kind as to send an "educational" letter to me, I will reciprocate in kind.
Did you realize that the Medicare program steals from the poor (minimum-wage workers, who may not even be able to pay their own medical bills) and gives to the rich? In any event, there is no provision in the U.S. Constitution that authorizes legalized plunder by the government. Those physicians who participate in Medicare and take these funds are accepting stolen money. Medicare is nothing but a Ponzi scheme. If the government is truly seeking to crack down on health care fraud, might I suggest that you consult a mirror? Medicare is the biggest healthcare fraud in this nation.
I appreciate the sample fee calculation that you supplied. I am well aware of the fact that physicians who choose not to participate in the legal plunder are suffering financial loss. In the example provided, the patient's reimbursement for a nonparticipating physician's services is 51 cents less than the government payment to a participating physician for the same service. I consider 51 cents to be a small price to pay for freedom and integrity. I would not participate even if participating physicians were paid $51,000 more than those who choose not to be enslaved by the government. My freedom and integrity are not for sale at any price.
I hope you will not consider me impudent when I think that I, after all my years of training, am much better qualified to practice medicine than one of your medically untrained bureaucrats-the ones who dictate medical care in the Medicare program. I have seen many examples of harm done to patients via the clinically imprudent and sometimes nonsensical "policies" dictated by HCFA/Medicare. Not only are Medicare bureaucrats incompetent to practice medicine, it is illegal for them to do so (see §1801 of the Social Security Act). Were I to participate in Medicare, I would be condoning this wanton law-breaking by government bureaucrats.
I would like to remind you of a document called the U.S. Constitution. Despite HCFA's presumptions to the contrary, it also applies to citizens over the age of 65. Americans do not lose their right to provide for their own medical care simply by becoming eligible for the Medicare program. This has to do with a concept called freedom. Freedom is so highly valued in this country that there are those who have actually given their very lives in defense of it. To squander the sacrifice of these brave men and women by surrending our freedom, via participation in this evil program, would be unconscionable.
It is my understanding that pursuant to the U.S.
Constitution any physician may privately contract with any
Citizen for any medical service at a mutually agreed upon price
without filing any document with any bureaucracy. Such services
are not covered by Medicare. In coming to this conclusion, I note
that any law or regulation which conflicts with the U.S.
Constitution is not valid.
Lawrence R. Huntoon, M.D., Ph.D., Jamestown, NY
Are Private Contracts Private? Some of the language in the proposed Kyl-Archer bill (H.R. 1194) was taken directly from the British law governing their socialized system. However, H.R. 1194 contains a provision that could be interpreted as requiring physicians to report to the federal government everything that the bureaucrats want to know about "private" contracts.
Great Britain has had a socialized medical system for almost
50 years. Today, many doctors spend part time in the socialized
system and part time in private practice, without the British
government snooping into private medical records. If that's
socialism, what do the U.S. Congress, President, and Medicare
bureaucrats have in mind?
Robert J. Cihak, M.D., Aberdeen, WA
On Compliance with the Law. When serving as a senior
executive for the National Cancer Institute, a government bureau,
I was given instruction by a government attorney on how to avoid
compliance with the Freedom of Information Act (FOIA). He
explained how to organize files so that people looking for
information from their own files could not get that information
if we knew how to file it differently so that it was not easily
available under FOIA.
Robert K. Oldham, M.D., Franklin, TN
It's Not Insurance. We must stop referring to unfunded "entitlement" programs as "insurance," a deception that has misled the public for decades. As Ed Annis thundered when Medicare was hatched, "they prostitute the name insurance...It is not insurance. It is a government dole!"
I for one am continuing to pay premiums (only about $600 per
annum) to the U.S. Life catastrophic policy formerly with AAPS,
with a substantial deductible ($15K) which could be raised from
securities held. Ever since the insurance industry was told by
LBJ in 1965 to quit competing with Medicare, or be taken to the
woodshed, they have remained intimidated and only recently some
have been emboldened to test the waters.
Thayer Smith, M.D., Downey, CA
[AAPS-sponsored insurance can continue past retirement--Ed.]
Playing Defense in an Era of Balanced-Budget Liberalism
Congress, after counting scheduled recesses and the August break, will have less than 70 legislative days to complete business this year. Members of Congress, anxious about job security, want to get home to campaign for re-election. The projected end of the session is October 9.This does not leave much time for solid legislative deliberations on the tough issues, but it does mean that there is always an opening for truly bad stuff, pet projects, and goofy mandates, jammed willy nilly into the fine and impenetrable print of the big year-end spending bills that nobody either can or cares to read. That s how the medical profession and America s patients got saddled with Section 4507 of the Balanced Budget Act of 1997. It is also how the silly Resource-Based Relative Value Scale (RBRVS) for Medicare physician reimbursement got enacted back in 1989. Stick this stuff in telephone books, wait three or four weeks for it to come to the surface, and then declare that Congressional Intent-an increasingly precious commodity-was whatever is politically expedient at the moment for the folks back home.
The majority s spirit is troubled. Remarkably, Republican Congressional leaders are still at a political disadvantage in dealing with a scandal-plagued White House on the Big Issues. This is, in itself, an incredible development; and if you made it the subplot of a hot political thriller, a President bogged down by charges of illicit sex and various other machinations, it would be dismissed by the fiction publishers as simply too implausible. But there it is. The implausible is reality.
There is an intellectual and political price for arguing incessantly about the need for a balanced budget without making an even stronger case for smaller government. And conservatives on Capitol Hill are paying that price. For years, Congressional conservatives have been deploring big deficits and higher taxes, arguing that the Country can t afford more liberal programs. Now that the federal budget is supposed to be going into balance, they can t oppose liberal initiatives with the old argument pulled out of an accountant's handbook: we can t afford it. Now, the Congressional Budget Office (CBO) says that the surpluses are coming and could be big. With a deficit of $22 billion for 1997, according to a report in the March 3 National Journal, the federal government is already running about a $9 billion surplus. Using CBO baselines for current law, that could mean a surplus of between $25 and $50 billion in 1998, and as much as $100 billion in 1999. If this scenario holds, it changes the big picture considerably. It means that the United States is heading into the new and uncharted fiscal territory. This has profound consequences for policy.
What to do with the Budget Surplus? The Clinton Administration has outlined its programmatic and spending priorities. Use the funds to buck up the Social Security Trust Funds-"Save Social Security First"-and pump up federal spending on new programs. Therefore, liberals in Congress, working with the Clinton Administration, will be pushing hard the remainder of the year for initiatives on child care, education, and Medicare expansion for early retirees.
A lot of Congressional Republicans would like to channel surpluses into debt reduction or tax cuts or a combination of both. It is reported that Congressman Bill Thomas (R-CA), who chairs the House Ways and Means Health Subcommittee, is examining ways to change the tax treatment of medical insurance. Thomas realizes that much of the debate today is skewed and wrongheaded because the problem is in the genetic structure of a market driven by a perverse tax policy, not in lack of regulations. Thomas, along with Congressman Jim McCrery (R-LA), is looking at tax credit options. The idea is picking up steam among a lot of Members who are uncomfortable with the Patient Access to Responsible Care Act (HR 1415), sponsored by Congressman Charles Norwood (R-GA). The growth of a pool for tax relief for individually purchased insurance, or group insurance outside of the place of work, holds out opportunities for real reform.
Keeping the Cap on Federal Spending
Conservatives in Congress will be fighting to keep in place the "spending caps," so central to the Balanced Budget Agreement they thought they had last year, and will look for ways to cut taxes. The spending-cap issue is crucial. If the cap is broken, the liberals in Congress will be able to break out of the current fiscal strictures and it s back to bellying up to the same old bar for the same old sauce, luring the otherwise sober Republicans over for just one more spending binge.
The menu of conservative tax cut proposals is virtually endless, ranging from killing the Death Tax, otherwise known as the inheritance tax, to ending the so-called "marriage penalty" and initiating some sort of tax credit or increased tax exemption for young children as a way to counter the Administration s new "day care" proposals.
The funds available for tax reduction or spending initiatives could be even richer. There is, of course, the so- called Tobacco Agreement, which could mean more Big Bucks. Liberals in Congress will try to tap into any such money vein as a way to fund social spending initiatives, and conservatives could see it as a way to finance expanded tax relief for private health insurance for non-employer based plans or even a new base of funding for expanded Medical Savings accounts in the Medicare program for the next generation of retirees.
Before Congress manages to spend the hypothetical surplus,
somebody needs to check the accounting. According to the Concord
Coalition, Clinton's proposed "balanced budget" borrows $101
billion from the Social Security Trust Fund in order to produce a
$9.5 billion surplus.
Moreover, instead of simply booking the Treasury's debts in
the trust fund, the government also credits the fund with
interest on those IOUs. Over the next five years, some $325
billion in fictitious interest will be included in federal
revenue projections-roughly half of the $660 billion in budget
surpluses projected for the next five years (Jeff Taylor,
Investor's Business Daily 2/27/98).Are We Sure About That Surplus?