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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

Volume 47, No. 12 December 1991


``I'm one of the uninsured,'' said Francis Davis, MD, editor of Private Practice magazine, at the 48th annual meeting of AAPS held in Lexington, KY, October 17-19.

``I'd like to have insurance, but I can't get it. I'm more than 65 years old, and there isn't any insurance that I can buy.''

Is there a chance of developing an insurance policy to replace Medicare Part B? In a symposium about this question, economist Aldona Robbins, PhD, said ``No.''

``Medicare is not insurance. It is difficult to substitute something that is insurance for something that isn't.''

The political issue of 1992, however, is the effort to substitute something that isn't insurance-namely, ``national health insurance'' or a ``national health plan''-for the real insurance that individuals and employers are providing.

In response to the problem of the uninsured, the private sector has been offering policies that resemble true insurance rather than an open-ended prepayment scheme. Already, 23 states from New Jersey to Washington have modified state mandates that were driving the cost of insurance up by about 20%. These so- called ``bare-bones'' policies do not cover expensive items like drug and alcohol treatment programs and require higher copayments and deductibles. The cost can be as low as $100 per month for a family or $50 for an individual. Some employers think this is still too much.

In the political arena, most proposals are based on the principle ``from each according to his ability, and to each according to his need.'' (The Communist genealogy is not stated, Communism being dead and discredited.) The various plans differ in details, such as the size of the (always subordinate) part to be played by the private sector. Perhaps the most radical is the Russo bill, H.R. 1300, which is endorsed by Physicians for a National Health Plan and Citizen Action, a group that claims 3 million members nationwide. This plan would cover all services ``deemed appropriate by Health and Human Services,'' without deductibles, copayments, or premiums. Physicians would be on a national fee schedule, and hospitals and nursing homes on a global budget. Insurance companies might be allowed to serve as fiscal intermediaries or to cover services that were not covered by the national plan.

``If Mohammed won't come to the mountain, you blow up the mountain and bring it piece by piece to Mohammed,'' said K.P. Pelleran, spokeswoman for the plan at a forum sponsored by the League of Women Voters at Tucson Medical Center.

In case the federal government does not act quickly enough, some states may implement similar plans on their own. The ``Braddock Bill'' will be reintroduced in the Washington State legislature in January. Some of the provisions of the June, 1991, version are as follows:

  • The Washington Healthcare Service Corporation will exercise complete operational control, including budgeting, benefit design, data collection, negotiation, contracting, and payment.
  • Fee-for-service payments will be based on the principles set forth in the federal resource-based relative value scale.
  • No health care facility or provider will be allowed to charge any additional fees or balance bill for services included in the healthcare plan or alternative plan.
  • The board shall endeavor to ensure that enrollees do not use out-of-state providers as a regular source of services.
  • No insuring entity may independently insure for services provided through the plan. Alternative plans will be approved only if they offer the same services and comply with the same procedures as the state plan, have an average enrollment of 350,000, and pay providers the same amount as the state plan or less.
  • The board will establish an explicit rationing policy that weighs the equity of providing services to some, but not to others, and considers a service's social value to the health of the community when weighted against other priorities.
  • Residents may be excluded from the plan only if their entire congressional district votes to exclude itself.

The Washington State Medical Association has endorsed a plan that strongly resembles the Braddock plan (see AAPS News, Sept 1991).

The means of financing the plan will include ``an assessment on each employer, as defined in RCW 50.04.080, of ..... percent for each employee up to .... percent of that employee's gross wages.'' The legislature cannot fill in the blanks without knowing what the plan will cost. The week before a public hearing, Governor Gardner told a business audience that a Canadian-style health care system for the State of Washington would cost $7,000,000,000, over an unspecified length of time. R.J. Cihak, MD, of Aberdeen, WA, called the Health Care Commission in Olympia to find out the length of time. He was referred to the research director, who told him they didn't give the governor that number. In fact, she added, they did not have any cost estimates of anything.

``The published list of possible services resembled a Sears Roebuck catalog without prices,'' Dr. Cihak said.

Most national health plan proposals are similarly vague about the price tag. The American College of Physicians doesn't know how large an increase in the payroll tax they are advocating. The Russo plan states percentages, and if they sound high, proponents say: ``But at least you'll be getting something for your money.''

What you'll be getting will not be insurance.

Election of Officers

At the 48th annual meeting of AAPS in Lexington, KY, October 17, 1991, the following officers were elected:

President: John H. Boyles, Jr., MD, of Ohio

President-Elect: Nino Camardese, MD, of Ohio

Secretary: Donald Quinlan, MD, of Illinois

Treasurer: R. Lowell Campbell, MD, of Texas

Immediate Past President: Claud A. Boyd, Jr., of Georgia.

Directors: Serving three-year terms will be Gregory E. Polito, MD, of Whittier, CA; Charles McDowell, Jr., of Alpharetta, GA; Joseph Scherzer, MD, of Scottsdale, AZ; and W. Daniel Jordan, MD, of Atlanta, GA. Andrew E. Mance, MD, of Oakland, MD, was elected to a two-year term and Lois J. Copeland, MD, of Hillsdale, NJ to a one-year term.


Data Bank Should Be Abolished!

Resolution introduced by Miguel Faria, Jr., MD:

WHEREAS: the data bank was made into law by an act of Congress through passage of the Health Care Quality Improvement Act of 1986 with little debate and support within the various medical societies; and

WHEREAS: the data bank infringes on the rights of physicians and certain other health care professionals, but not on the rights of any other class of persons (e.g. legal and business professionals or leaders of government); and

WHEREAS: the data bank is also inequitable because some physicians will have a higher number of claims filed against them not necessarily because of incompetence but because of the higher-risk nature of their specialties; and

WHEREAS: the provisions of the data bank can not guarantee confidentiality and the erroneous release or misuse of information could result in the irretrievable loss of a physician's reputation and professional livelihood; and

WHEREAS: the enactment of the data bank is already contributing to the worsening of the climate in which medicine is practiced today and thus may be deleterious to the health of our fellow citizens and patients; now therefore be it

RESOLVED: that counsel for AAPS take action through legal avenues to seek the abolition of the Data Bank as an action violating the civil rights of physicians.

The assembly voted to approve the resolution in principle, but to refer implementation to the Board of Directors pending a fiscal note and legal advice as to its feasibility.


From Capitol Hill

Visit Codes Changed. All Medicare carriers will be required to use new evaluation and management codes once the new Relative Value Scale fee schedule is in place January 1, 1992. The coding change may have almost as much impact as the RVS (Medical Economics 11/4/91). The new codes include length-of- visit descriptions, which will help carriers decide by simple calculation whether the physician is ``upcoding'' (say if his day has more than 24 hours in it). HCFA's assumption that physicians will upcode anyway was one reason why the proposed fees were so much lower than expected.

Physicians are admonished to learn the new system and not rely on HCFA's ``cross-walk'' that links the two versions. They are also advised to obtain information about coding from the carrier and then send the carrier (by certified mail) a letter repeating the coding instructions for verification. Then they should be sure that their charts contain documentation for the visit codes as well as the medical treatment, for the benefit of Medicare auditors (Part B News 10/28/91).

In the event that a Medicare audit occurs, physicians are warned not to talk to investigators but to call their lawyer. Also, they should maintain a log of the name, address, and employer of each investigator, along with a summary of each visit and a log of all documents copied and taken from their possession (Ibid.)

Medical Waste Rules Could Cost 40 to 400 Times As Much as Expected. The Environmental Protection Agency's calculation that the Medical Waste Tracking Act (P.L. 100-582) would cost each hospital about $3,800 annually did not take into account the actual volume of waste generated. A study by the Voluntary Hospital Association found that the disposal costs ranged from $80,000 to $700,000 (Health Legislation 10/30/91).

The benefits? Aside from sharps, which have caused disease only in occupational settings, there is no evidence that medical waste has caused health problems. Household waste contains on the average 100 times more pathogenic microorganisms than medical waste. (N Engl J Med 325:578-582, 1991).

IOM Recommends Computerized Medical Records. A prepublication copy of an Institute of Medicine report recommends establishing a Patient Record Institute to promulgate national standards for data. Computerized patient records could serve as a cost containment and medical research tool, the report said. Major unresolved problems about cost and confidentiality were acknowledged (BNA's Medicare Report 10/18/91).

PPRC Recommends German-Style All-Payer System. In testimony before the House Ways and Means Commission, the chairmen of the Prospective Payment Assessment Commission and the Physician Payment Review Commission (PPRC) agreed that the US should adopt a system under which all private and public insurance plans pay the same rates for hospital and physician services. Rates would be determined in accordance with overall expenditure targets established by a ``National Expenditure Board,'' a ``quasi-independent body'' whose recommendations would be approved or modified by Congress.

PPRC Chairman Philip Lee said that such an all-payer system could be used to control volume by giving payers the ability to profile medical practices. He thought that was a ``less intrusive review method for identifying unnecessary care'' (BNA's Medicare Report 10/18/91).

CBO Predicts Health Care to Consume 20% of Federal Budget. Congressional Budget Office Director Robert Reischauer warned the House Ways and Means Committee that health care expenditures, now 7.1% of the federal budget, could consume more than 20% by 1996, assuring that the deficit can only increase (BNA's Medicare Report 10/18/91).

HCFA to Publish Proposed Regulations on ``Stark Bill''; AAPS Will Submit Comment to Agency

The ``Stark Bill''-sponsored by Rep. Fortney Stark (D-CA)- generally prohibits physicians from referring Medicare patients to clinical laboratories in which they or their families have a financial interest. The clinical diagnostic laboratory may not ``present or cause to be presented'' a claim under Medicare or any other individual or third-party payor'' for laboratory services furnished pursuant to such a prohibited referral. The effect of the general rule is to prohibit any physician from maintaining an ownership interest in a clinical diagnostic laboratory to which he refers.

The major exceptions to the referral ban under this bill are ``physician's office laboratories'' (POLs) and laboratories in rural areas. The statute allows referrals by a physician to the physician's own employees or the employees of the physician's group practice. Such services must be provided in a building where the referring physician or other member of his group provides physician services unrelated to clinical laboratory service or in a central building set up by a group to perform ancillary services for its members. Such services must be billed by the physician performing or supervising them, by that physician's group, or by an entity that is owned entirely by the physician or group. The ``rural laboratory'' exception essentially exempts laboratories which are not located in ``urban areas'' as defined by the Office of Management and Budget or by the Secretary of Health and Human Services.

According to the Bureau of National Affairs, the language of the proposed regulations closely tracks the language of the bill itself (2 Medicare Report, 549, BNA, 11/1/91). The bill and the proposed regulations define ``financial relationship'' as an ownership, investment interest, or compensation arrangement between the entity and the physician, group practice, or the physician's immediate family member. In the proposed regulations, HCFA seeks to expand this definition to include indirect financial relationships as well, so that physicians who have an ownership interest in an entity which in turn has an ownership interest in a laboratory could not refer to that laboratory (Id.)

The proposed regulations also seek to add more requirements to the POL exception. In order to fall under this exception, referring physicians would be required to devote more than 50% of their time or professional services to the group that owns the laboratory in order to make a referral to the laboratory.

Physicians who bill Medicare for clinical laboratory services in violation of the self-referral prohibition are subject to a civil monetary penalty of up to $15,000 for each violation. Further, physicians who attempt to evade the statute's requirements through ``circumvention schemes'' to avoid detection of prohibited referrals are subject to a civil monetary penalty of up to $100,000 for each such scheme (2 Medicare Report 555 BNA, 11/1/91).

In order to enforce the statute, HCFA has sent questionnaires to clinical laboratories requesting information

on ownership arrangements. Failure to answer such questionnaires in a timely fashion can result in a civil monetary penalty of up to $10,000 for each day of noncompliance.

The proposed regulations will be published in the Federal Register in November, followed by a 60-day public comment period. Although the regulations will probably not become final until after January 1, 1992, the statute becomes effective on that date regardless of whether or not the final regulations are published.

AAPS plans to submit an extensive comment to HCFA on the proposed regulations, as previously done with regard to the Clinical Laboratory Improvement Amendments of 1988 and the Resource-Based Relative Value Scale. Due to comments such as these, HCFA has been inundated with information which it must consider before issuing final regulations, resulting in long delays in the implementation of further bureaucratic controls on the practice of private medicine.


Policy Statement of the Medicare Committee of the Atlanta Dermatological Association

The following statement was brought to our attention by Don W. Printz, MD, of Tucker, GA:

WHEREAS the true quality and quantity of health care afforded all Americans depends to a great extent on the individual physician's unencumbered and independent desire and ability to provide appropriate, effective, necessary, and complete treatment of each patient; and

WHEREAS the private practice of medicine in America has traditionally provided the leadership role, research effort, delivery systems, and protection of the patient-doctor relationship that remains vital to the nation's health; and

WHEREAS a diversity of health care delivery systems and patients' abilities to access health care providers and effect some measure of self-determination in their own medical therapy remains essential to freedom of health care; and

WHEREAS the majority of Americans of all ages desire the benefits of advanced technology that has led to diagnosis of disease, relief of suffering, and extension of meaningful life that was previously not possible; and ....

WHEREAS the Medicare Reform Acts as passed by Congress and as interpreted by HCFA effectively prevent physicians from prescribing and performing complete and appropriate care for their patients [and] prevent patients from choosing their manner of treatment...

THEREFORE, we conclude that the current Medicare mandates, which specifically restrict patients' rights to freely enter contracts with physicians for their medical care, are deleterious to the health and financial well-being of the nation's citizens, young and old alike, [and] to the civil liberties of the nation's citizens as guaranteed in the Constitution of the United States...Physicians themselves are being subjected to price and practice controls that in any other business, profession, or segment of the American free enterprise system would incur the scrutiny of the Federal Trade Commission.... We hereby recommend that the American Academy of Dermatology take and support all necessary measures, including legal action, to repeal, change, or otherwise eliminate these current Medicare laws to prevent irreparable harm to patient care, research, and teaching in the field of dermatology and all related fields of medical care.

New Members

AAPS welcomes Drs. Patrick Adams of Rome, GA; Dan G. Addison of Port Angeles, WA; Craig T. Arntz of Renton, WA; Burton Baker of Concord, CA; James R. Baker of Lubbock, TX; Neil Barry of Middlesboro, KY; Laszlo Belenyessy of Los Angeles, CA; Thomas V. Bertuccini of Macon, GA; Paul G. Bizzle of Havre, MT; Larry Boeke of Des Moines, IA; Norman Borge of Ft. Worth, TX; Lex Brown of Wichita Falls, TX; Wayne Chan of San Jose, CA; F. Jeff Charney of Denton, TX; Donald Childs of Forest Park, IL; Milton A. Claassen of Newton, KS; David Compton of Oak Ridge, TN; Gary Conell of North Platte, NE; Carla Cook of Royal Oak, MI; Danny Corbitt of Lewisville, TX; Josephine DeTar of Reno, NV; Robert Drehmel of Woodbury, MN; Richard Robert Forest of Blandford, MA; Ken Gerdes of Denver, CO; William R. Green of Mobile, AL; Lloyd T. Griffith of Mt. Holly, VA; Thomas Griffith of Tacoma, WA; Dan Growney of Atchison, KS; Robert Hall of Anchorage, AK; Frank Hampton of Armuchee, GA; John R. Handy of Augusta, GA; Zvi Herschman of West Hempstead, NY; Elliott Jacobson of Whittier, CA; Louis Keeler of Haddon Heights, NJ; Aaron Kemp of Kent, WA; Ron Lands of Oak Ridge, TN; Alan Lassor of Winotka, IL; Michael Lieppman of Long Beach, CA; James F. Litsey of Owensboro, KY; Felix Loeb of Portland, OR; Leo Lutwak of Huntsville, AL; Malcolm MacIvor of Marysville, OH; Robert Maddox of Monroe, LA; Paul Madonia of Flemington, NJ; Lawrence E. Mann of Paris, TX; F.J. McGouran of Poteau, OK; Tom Mears of Mountain Brook, AL; Albert H. Meinke, III of Lexington, KY; Jerry Miller of Kingspoat, TN; Albert J. Miller of Chicago, IL; William Max Miller of Paulding, OH; Ken Morgan of Thomaston, GA; Leonard Morse of Worcester, MA; Abe Moskow of Barnwell, SC; Gerald B. Myers of Renton, WA; Adel G. Nafrawi of Abilene, TX; Peter Nutley of Phoenix, AZ; W.C. Oakley of Boise, ID; Mark Odland of Edina, MN; Kalpana D. Patel of Buffalo, NY; George Peddie of Houston, TX; Charles S. Peter, Jr. of Houston, TX; John H. Piland of Fort Mill, SC; John H. Piland of Fort Mill, SC; Doris Rapp of Buffalo, NY; Richard Reese of Midland, TX; John Karl Reiman of Columbia, CA; Charles L. Ridley, III of Macon, GA; Howard L Salyer of Nashville, TN; Ignucio Sarmina of Durham, NC; Stephen Pat Sauceman of Signal Mtn., TN; Anna Scherzer of Scottsdale, AZ; Carl C. Schuessler of Macon, GA; James Schwieterman of Maria Steen, OH; Rodney Skoglund of Seattle, WA; Zucel Solc of St. Petersburg, FL; Del Stigler of Denver, CO; Kevin Sullivan of Chicago, IL; Randall K. Tozer of Scottsdale, AZ; Daniel B. Veazey of Hendersonville, NC; Eugene A. Waltke of Omaha, NE; Carl Werner of St. Louis, MO; and Joseph C. Zweng of Los Gatos, CA.

New student members are David Sharp of Dayton, OH and Gonzalo V. Gonzelez-Stawinski of Ponce, PR.


Letter to the Editor

If American medicine is to continue to be the best in the world and free from oppressive bureaucratic tyranny, it must be reprivatized. To accomplish this, more doctors must become actively involved and join the AAPS, state and county medical societies, and yes, the AMA. If we do not work together, we will hang one by one. No organization, especially in medicine, can stand alone in this day of criticism and litigation and expect to remain unscathed. As the president of the Ohio State Medical Association Medical Student Section, I am contemplating the incorporation of AAPS values, (e.g. constitutional values) into the Ohio Medical Student Section. I feel these are very important for the future of medicine and that this action could greatly enhance the desperately needed cooperation, trust, and mutual respect between the two groups.
Richard J. Villarreal


On ``Management''

With apologies to Socrates, ``managed'' has replaced ``examined'' as the buzzword for life in what is now unabashedly called the ``health care industry.'' No longer do doctors have patients, but blocks of consumers are traded at a discount to organized groups of providers by managed care administrators....

The social contract is no longer individualized, and negotiation on what society can afford and what limits it will place on care are ceded to brokers....

[W]ould you believe [that] in America managed care is now the way to go in health care while all other managed economies have been collapsing....

[T]hese care managers are most eager to control that which they do not understand. Management is a utilitarian skill with the lowest common denominator the goal. Excellence is an outlier and innovative leadership is disruptive. Managers have a mantra: ``the bottom line.''
Glenn W. Geelhoed, MD
excerpted from AM News, 4/22-29/91


AAPS Calendar

Jan. 31, 1992. Board of Directors meeting, New Jersey.

Feb. 1, 1992. Regional meeting with medicolegal seminar, New Jersey, site to be announced.

Oct. 15-17, 1992. Annual Meeting, Seattle, WA.