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of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto
Volume 47, No. 12 December 1991
CALL IT SOCIALIZED MEDICINE
``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
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
- 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
- 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,
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
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
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
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
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.
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
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
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.