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of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto
Volume 54, No. 12 December 1998
On November 3, 1998, U.S. District Judge Harry Leinenweber
granted the AAPS motion to intervene in the case of Sunbeam
Products, Inc., v. American Medical Association (97 C 6313)
and rescinded the protective order on materials produced in
discovery. AAPS had argued that the AMA owes a fiduciary duty to
all physicians because of its self representations as their
single unified voice and because of its government-granted
monopoly over a mandatory billing system (see AAPS News Sept, Oct, Nov, 1998
The Judge stayed the recission for two weeks, during which
time the AMA may move for a new, separate protective order: "This
motion, if the AMA chooses to file it, must identify specific
documents, and clearly define the injury AMA would suffer if
those documents were disclosed. Should AMA submit such a motion,
the court will set a briefing schedule to enable Sunbeam and AAPS
The Judge agreed with the AAPS contention that the AMA has
the burden to show "good cause" for the order. Because the
initial order was based on stipulation by both parties, "the AMA
never showed, and the court never found, good cause."
Concerning the possible destruction of discovery materials,
the Judge held: "The AMA has stated that it is aware of its
general obligation not to destroy evidence, that copies of all
its discovery are in storage, and that it has no plans to destroy
these materials. The court finds these good faith representations
to be sufficient assurance that AMA will not destroy any
documents, and consequently holds that a document preservation
injunction is not necessary."
David Graham, an attorney representing the AMA, told the
Chicago Tribune that the AMA would file for a new
"Like the Clinton Administration, the AMA is going to great
lengths to maintain secrecy and to obstruct inquiries into its
policymaking processes," stated AAPS Executive Director Jane M.
Orient, M.D., "And it raises the same questions: Who knew what
when, and what's the big secret anyway?"
Documents eventually released by the Clinton Health Care
Task Force showed a heavy influence by tax-exempt Foundations as
well as managed-care executives and representatives of profit-
making companies that stand to realize tremendous revenues from
centralizing, collectivizing, and computerizing the "health care
system." Memoranda from the Clinton Justice Department outlined
the strategy for implementing top-down regimentation and
rationing in a way that might withstand constitutional challenge.
A key part of the strategy was delegation of powers to private
actors (see the "Zelman memorandum," AAPS
News, May, 1998).
The AMA is already deeply involved in the implementation of
federal programs, as with the Resource-Based Relative Value
Scale, the scheme of federal price controls that makes the CPT
coding system so critical. Because this scheme, like all price
control regimes that have preceded it during the past forty
centuries, has not contained costs but has resulted in corruption
and market distortions, still more strong medicine is being
prescribed (the AMA/HCFA "E&M Documentation Guidelines"). These
"Guidelines," in turn, feed into the central command-and-control
measures now in the pipeline for all of medicine, in the guise of
"quality assurance," "resource allocation," and "consumer
One obvious question to ask is this: besides the 1983
exclusive contract with HCFA to supply CPT codes (see AAPS News, June 1998), what other
business arrangements does the AMA have with government and
others to supply the needed data, standards, or professional
It is possible that such arrangements might provide the
answers to other vexing questions: Why did the AMA, with the
largest ($17 million) lobbying force on Capitol Hill, do
nothing to oppose the RB-RVS? Why did it not sound the
alarm about criminal penalties in Kassebaum-Kennedy
before a Wall Street Journal op-ed piece by an
AAPS physician caused phones to ring in Chicago? Why is the AMA
doing virtually nothing to promote tax equity and medical savings
accounts, even though official policy favors these measures? Why
did the AMA endorse a law that would have established a new
corporate right to own medical data bases? Why is the AMA not
denouncing the "Medicare Integrity Program"? Why is it not
fighting a national identifier number?
Focusing just on the June, 1998, E&M guidelines: Why do they
contain nothing to protect patient privacy? Why do they
so devalue the skills (and downgrade the payment) of physicians
by saying that it requires medical decision-making of only "low"
complexity to treat patients who need an arterial puncture or an
EEG, and only "medium" complexity to perform endoscopy or cardiac
catheterization? According to the proposed schema, payment is
improved if you choose a more invasive procedure (intra-arterial
angiography vs. MRA), and the most remunerative decision of all
is to deny treatment.
As Arnold Relman, M.D., former editor of The New England
Journal of Medicine, stated: "As a result of [the Sunbeam]
settlement, we will never know the truth of what happened. It
does not let the sun shine in."
The Sunbeam agreement may turn out to be the least important
one. But documents now sealed under protective order could let
sunshine into the whole AMA decision-making process, such as that
involving the E&M guidelines.
Whatever public-private arrangements one may approve, the
ones that must be kept secret could pose a grave threat to the
foundations of American medicine and the very existence of a free
Among the more than 250 bidders for contracts in the
Medicare Integrity Program, which will use private auditors to
investigate physicians and other "providers" for fraud and abuse,
are the following: Paladin & Associates of Ballston Lake, NY;
Medicare carriers such as Aetna Life Insurance Co. of Hartford,
CT; PROs such as the Alabama Quality Assurance Foundation of
Birmingham; former IRS agent Ron Semaria of Brooklyn, NY; Mr.
Jose Giron of Comprehensive Health Care Corp., a "minority owned
management services organization"; HOPS International, Miami
Lakes, FL, a "data warehouse for very large data bases"; Lockheed
Martin Mission Systems of Gaithersburg, MD; Lorine Lorino, R.D.,
L.P.N., of Cleveland, TN, "a nutrition consultant, audit and
medical review and debt collection"; and several persons
affiliated with United Healthcare (see
HCFA is seeking authority to add such entrepreneurs to the
list of agents allowed to carry weapons.
Paladin of the Western television series Have Gun, Will
Travel was a different sort of character. But the most
important difference between the Western and the HCFA cowboys is
this: In the Western, there was no doubt about the crime.
Everybody agreed that a crime had been committed, and the whole
town knew what it was. Somebody's brother had been shot, some
cattle had been rustled, a horse had been stolen, and so on. The
only question was who dunit.
HCFA, on the other hand, has the perpetrator in hand. It
just needs to rummage through his records to find a crime.
As HCFA tells beneficiaries in its "Frequently Asked
ov/webfaq3.htm#outlook1), "it has never been more
dangerous to commit Medicare Fraud." It outlines penalties,
including 10 years in prison and administrative sanctions up to a
$10,000 fine per line item on a false claim, and notes that
"those who commit health care fraud can also be tried for Mail
and Wire Fraud."
In the FAQ, HCFA does not reiterate the statement, often
quoted by the AMA, that it has no intention of punishing honest
mistakes. That may be because, as explained by Robert E. Mazer,
Esq., at an October meeting of the National Association of
Healthcare Consultants, "I am not aware of anything the
government calls an honest mistake-unless it is in the
Moreover, Mr. Mazer points out that the doctor's signature
on a claim certifies that everything on the claim is accurate and
that everything was done in compliance with all regulations. In
other words, any violation of any law or regulation is
also a violation of the False Claims Act. And anyone
who "caused a false claim to be filed" can be prosecuted for
aiding and abetting the crime or for conspiracy.
Patient care is a little different from building aircraft
carriers, for which there may be only three claims (one-third
finished, two-thirds finished, and finished). So the maximum
penalties are far higher.
As former prosecutor Charles Murdter noted, there is vastly
increased cooperation among law enforcement agencies in this
area, and both the civil and the criminal arms will be involved
in any health care fraud investigation. If the government can't
meet its burden of proof for sending a doctor to prison, it may
still be able to get a monetary "recovery."
In the past, Mr. Murdter noted, a prosecutor could not get
"the stat," which is crucial for career advancement, unless an
investigation led to an arrest and an indictment. Now, FBI
Director Louis Freeh has carved out an exception for health care
fraud. A prosecutor can get "the stat" if there is a monetary
recovery. And the whistleblower can pocket a share of the
dollars. Of the Columbia/HCA settlement for $1 billion, the
whistleblower received $150 to $200 million.
Mr. Murdter is aware of five whistleblower suits filed by
compliance officers. There has even been a successful case in
which the whistleblower committed the fraud himself. Judges now
have the discretion to decrease the size of the award based on
the culpability of the whistleblower.
To expedite investigations, every Medicare claim filed since
1993 now resides on a government data base on a Cray computer at
Los Alamos. The CPT codes are key in manipulating the data to
pinpoint targets for investigation.
HCFA's work plan for 1999 can be downloaded from
Hospitals and doctors are hiring compliance officers in an
effort to reduce the potential damages-even a hospital that could
not afford enough billing clerks to monitor accounts receivable
and thus did not notice that a financially stressed HMO was a few
million dollars in arrears.
How to Earn a "Doctor's Salary"
A special publication from The Free Enterprise Institute and
the Oxford Club, PO Box 978, Frederick, MD 21705, tells you how,
for only $159, you can get in on a "ground-floor opportunity."
The headline reads: "A $10 Billion `Scam' In The Medical Industry
Can Help you Make A Six-Figure `Doctor's Salary' From Your
Home...Fast, Easy and Foolproof." No special background is
required, just two weeks of training. And you'll be an instant
hero to your customers, because you'll only pocket half the money
you save them by finding mistakes in their medical bills. You'll
be able to "enjoy fabulous vacations around the world...Drive the
luxury car of your choice...Buy an eye-catching, custom
home,....Do whatever you want because you'll have all the money
***AAPS Membership Drive***
We need your help in expanding our growing membership
further. Please copy, post, and distribute the enclosed letter.
And take advantage of our special, limited holiday offer: All
fully paid-up members may give three free one-year gift
memberships, in addition to our usual gift membership offer that
you will receive with your first 1999 statement. The enclosed
green applications are good until Dec. 31. Also, please post,
distribute, and ask colleagues active in other medical organiz-
ations to comment on the enclosed resolution:
RESOLVED: That there must not be any further
interference with the practice of private medicine for the
benefit of law-abiding patients. Specifically, it is resolved
that (1) the use of armed auditors by HCFA must cease; (2) the
additional documentation burdens imposed by the new 1998 AMA/HCFA
Evaluation and Management Documentation Guidelines must be
rejected; and (3) Congress must not create a new corporate right
of ownership over databases of medical records.
You are my Sunbeam, my only Sunbeam.
You make me happy when skies are gray.
You'll never know, Docs, how much we love you.
We're so sorry HCFA blew you away.
AAPS to File Amicus Brief in Gailey Appeal
On November 10, Raymond Keith Gailey, convicted on one count
of mail fraud resulting from a contract dispute with a hospital
(see AAPS News Oct, 1998), faces
sentencing in federal court. The prosecutor is demanding prison
In the AAPS amicus brief, Andrew Schlafly argues that the
conviction was based on an erroneous economic analysis of the
contract, and that Dr. Gailey's alleged misstatement was
immaterial. Moreover, the conviction contravenes the due process
protections of the Fifth Amendment.
In reversing a conviction based on facts remarkably similar
to those in the instant case, the First Circuit held that "[a]
breach of contract does not constitute mail fraud" (United
States v. D'Amato 39 F.3d 1249, 1261 n.8 (1st Cir. 1994)).
Numerous organizations including the ACLU and many New York Bar
associations filed briefs for the defendant.
Justice Oliver Wendall Holmes observed that every party to a
contract is legally entitled to interpret and breach it, with
contractual damages being the remedy to the other side. The mail
fraud statute did not criminalize immaterial false
representations pertaining to private agreements.
In United States v. D'Amato, the ACLU argued that
"no [person] shall be held criminally responsible for conduct
which he could not reasonably understand to be proscribed." The
Supreme Court emphasized the importance of this constitutional
limitation in Kolender v. Lawson 461 U.S. 352(1983),
noting that due process requires both actual notice and minimal
guidelines governing law enforcement. Otherwise, the result could
be "a standardless sweep [that] allows policemen, prosecutors,
and juries to pursue their personal predilections."
Mr. Schlafly writes: "Neither Dr. Gailey nor his attorney
could have possibly imagined a mail fraud violation based on his
interpretation of the contract, which authorized him to request
the Hospital loan on a cash basis rather than accrual basis. Such
application of the mail fraud statute, which is wholly
unprecedented, constitutes lack of the requisite actual
notice....This conviction, if sustained, would open a Pandora's
box of improper and even politically-motivated prosecutions."
The American Health Legal Foundation has voted to support
this amicus brief. Other medical associations have expressed an
interest in joining it. AAPS members are encouraged to seek
the support of their local or specialty societies. Full text
is available by FAX on request or can be downloaded from www.aapsonline.org.
End of Fee-for-Service Medicine in Sight?
In a letter to AAPS Director Lawrence Huntoon, M.D., Ph.D.,
Scott Levine, Policy Specialist, HCFA Region II, writes: "[I]t
has been well documented (by the Government Accounting Office
among others) that fee for service billing lends itself to
abusive billing practices, at least by some, and that medical
review activities pay for themselves many times over....In my
opinion, the primary alternative to a well functioning medical
review system is the elimination of fee for service billing and
its replacement with the myriad of capitation arrangements which
has grown to dominate commercial health insurance."
Dr. Huntoon concluded that one purpose of recouping money
already paid to physicians is to bolster the financially doomed
Medicare program, and another is to totally eliminate fee-for-
service medicine and harass physicians into accepting full
capitation under Medicare.
Replying to Mr. Levine, Dr. Huntoon noted that "fee-for-
service medicine is not what leads to abuse.
Participation in the Medicare program is what leads to
abuse. Nonparticipating physicians such as myself, who receive
payment directly from our patients for work done, would have a
very difficult time convincing the patient to pay two or three
times or pay for services not delivered." Dr. Huntoon also noted
that HCFA, despite repeated attacks on his office, has yet to win
a single case against him on medical review. "How cost effective
can [such attacks] be?"
Y2K: Are You Ready to Opt Out?
It is thought highly likely that HCFA will miss the January
1, 2000, deadline on upgrading its computer system (Med
Econ 9/21/98). However, some carriers have demanded that
physicians submitting electronic claims provide four-digit years
within one month. Many will have to buy an entire new computer
system to do so, as new software will not run on their systems.
Before making an investment of many thousands of dollars,
physicians might ask: Is it time to opt out?
E & M Survey Update
The final tabulation of our physician survey on the 1997
AMA/HCFA E&M Documentation Guidelines shows that of 1,396
respondents, 1.22% say the guidelines are "necessary and
appropriate to combat fraud"; 12.6%, "okay in concept but need
revision"; 1.72%, "a useful device to improve quality of care";
0.79%, "a way to learn what works in medical care"; 1.58%, "a
reason to join the AMA"; and 77.8%, "unlawful and unconsti-
tutional." Of AAPS members, 82% thought the guidelines were
unlawful and unconstitutional, compared with 65% of nonmembers.
Full results are posted on our
Should You Help Them?
Physician data is a hot commodity these days, and you may be
receiving a number of survey instruments to help compile this
profitable information. One such survey came from The Advisory
Board Company, which supplies data to hospitals for a membership
fee. A socioeconomic survey came from WESTAT, with a cover letter
from Lynn Jensen, Ph.D., Interim Executive Vice President of the
AMA. One physician's office received three or four telephone
calls regarding this survey, which would require considerable
time and effort to complete. Physicians are not obligated to
supply this information, and can firmly advise WESTAT to stop
calling. A detailed, 6-page Physicians' Credentials Update was
sent by the AMA to help update the AMA Physician Masterfile, "one
of the most widely used, comprehensive physician databases in the
world." Anyone in the world can call up your file at
"Make sure they see accurate information," advises E. Ratcliffe
Anderson, Jr., M.D.
How Many Guns?
Congressman Bill McCollum of Florida has asked the GAO to
report on the rising number of armed bureaucrats; no one now
knows for sure precisely how many there are. The problem stems
from chronic lack of bureaucratic accountability (Nevada Policy
Research Institute, 9/1/98).
An Endgame. To: Joseph J. Perry, Examiner, State of
New York Insurance Department: I would like to thank you on
behalf of my patients for looking into the outrageous conduct of
New York "Care" Plus Co. One can't help but notice that whatever
name appears in the insurance company's plan is usually the
opposite of what they actually do: i.e. care = no care, plus =
less, choice = no choice, etc.
In this case, the patient who this insurance company claims
"wasn't sick enough to warrant acute care" died. When
Mrs. X died, I continued to fight on behalf of her husband so
that he would not be stuck with the hospital bill. When he died,
the insurance company won its stall-to-the-death game.
There is much talk about "healthcare fraud" these days. In
my view, the biggest fraud is perpetrated by insurers who take
money from their "valued clients," then give them a stonewall job
that would even put Clinton to shame when they get sick. There
surely is a special place reserved for such insurance people, and
I suggest that they take marshmallows and a roasting stick with
them when they die.
Lawrence R. Huntoon, M.D., Ph.D., Jamestown, NY
Last Coverage. The Wall Street Journal brings
us this news about the state with the most advanced medical
socialism: "Assisted-suicide costs should be covered under
Oregon's taxpayer-supported health plan for the poor, a state
medical panel decided. Oregon voters have twice approved ballot
initiatives to let doctors help the terminally ill die. Most
private insurers say they will cover the cost of lethal
injections" (Wall St J 2/27/98, p. 1).
We are all terminally ill when we are conceived, but should
government set the date for our death? To government and some
insurers, it makes good economic sense to pay 50 cents for the
drugs to kill you, if in a weak moment you agree to the
Richard Swint, M.D., Paris, TX
A Step in the Right Direction. You are absolutely
correct in getting doctors out of Medicare. All other
unconstitutional activities should also be eliminated. We shall
never be a free people unless government is controlled as was the
intention of the framers of the Constitution.
David Eisenberg, Tucson, AZ
The Next Step. Thanks for the help in exiting Medicare.
We are now taking the next step and keeping patients, colleagues,
and community leaders informed. On July 1, I wrote to my
patients: "I consider myself fortunate to have become a
physician. Each year brings more rewards to my working hours. The
science and art of medicine is a fascinating challenge. Working
with you and the other people who consult me is fulfilling.
Because of all that, I hope to continue to practice for several
more decades. To do that and maintain my health, I am going to
stop dealing with certain insurance companies. We at this office
want to do what is best for you, not just what your insurance
company guidelines say is permitted. We will no longer be a
preferred or participating provider for any insurance
Douwe Rienstra, M.D., Port Townsend, WA
Defending Patients' Confidentiality. I am reviewing all my
managed care contracts with the intent of renegotiating or
terminating, depending on whether they allow for patients to do
their own billing and on whether my assurance of confidentiality
is respected in the contract. I will not be doing any third-party
billing. My understanding with each patient is that he is
responsible for his own bill and that any information that goes
to his insurance company will flow from this office through
the patient. I had to terminate my contract with Choice
Behavioral Health Partnership because Sections 2.16, 5.1, 5.2,
6.2, 6.4, 8.3, and 8.5 have the potential of requiring me to
violate confidences which my patients have a right to expect me
to keep. Additionally, as I am opting out of the Medicare
program, I will no longer be in compliance with Section 11.3 of
the independent provider agreement. I hope that other physicians
will be inspired to take similar action by knowing colleagues who
are willing to take this stand.
Katharine C. Otto, M.D., Savannah, GA
Mortality Statistics. Not to minimize the importance of
even one death, the 2,000 people executed in about 30 years by
the Spanish Inquisition should be placed in perspective. In the
French Revolution during the period of so-called enlightenment,
more individuals were executed in 20 days than in the Spanish
Inquisition over 20 years. Henry VIII reportedly executed 72,000
Catholics, and his daughter Elizabeth I ("Good Queen Bess")
killed more than did the Spanish and Roman Inquisitions together
in three centuries. Ironically, "Bloody Mary," the Catholic
queen, executed only a fraction of the number killed by "Good
Michael V. Rock, M.D., Mesa, AZ
Armed Bureaucrats. As we contemplate making new laws
with enforceable standards, with goals that are seemingly good,
we need to consider what we are doing to our freedom. Currently,
the U.S. has 60,000 federal bureaucrats who carry guns to enforce
criminal penalties for what one would consider to be fairly minor
Bert Loftman, M.D., Atlanta, GA
Legislative AlertA Monstrous Spending Process
The Omnibus Appropriations Act for FY 1999 (HR 4328) is now
law. It calls for spending a total of $486.7 billion of American
taxpayers' money for federal agencies, departments, and programs
normally covered under eight separate appropriations bills that
were not enacted separately in this past Congressional session.
It also contains another $20.8 billion in what are called
"supplemental appropriations"-roughly translated: More federal
spending as an afterthought.
Altogether, the bill is a mere $20 billion in extra spending
over budget. The bad news is that both conservatives and liberals
voted for this bill. The good news is that both conservatives and
liberals realize that this is not the way to do business, even if
Washington has been doing business this way for far too long. On
criticizing the process by which this bill, as so many other
bills in the past have come about, the line between liberals and
conservatives is happily blurred; and, in that fact alone, there
is yet hope for genuine reform of this unwieldy budget and
The Washington Post editorial of October 16th is
perhaps the best single piece on the subject: "Most members will
have only the vaguest idea of what the bill contains. Nor will
they have more than a fleeting opportunity to amend the measure.
The future: Are you for it or against it? You have 15 minutes to
decide. That is the kind of vote this will be." Of course, any
examination of our Constitutional tradition, as we will note
momentarily, reminds us that these are not the kinds of votes we
should have in the legislature of a free society.
Reading The Fine Print
So, what have they wrought?
The great Department of HHS got $213. 5 billion, the
largest single chunk of taxpayer change in this big spending
package. Of this, 85% supports Medicare, Medicaid and other
entitlement programs - the so called "mandatory" spending. Odd
phrase in a free government, that. In any case, the total is
$17.8 billion higher than in 1998.
Federally funded health research is being given a big boost.
The National Institutes of Health (NIH) will get a $2 billion
increase in funding, raising its 1999 share to $15.6 billion.
Medicare Home Health care, recently the source of rapidly
rising costs in Medicare part A, got a $1.7 billion increase-a
last minute insertion, largely in response to complaints by
"providers," who claimed that 1997 rates were driving too many of
them out of business.
There are several policy pieces of note. The final
conference report rejected several House-passed provisions,
including parental notification of contraceptives for minors
under Title X family planning programs; a provision that requires
managed care plans to allow women to designate their
gynecologist as their primary care "provider"; and a provision
that would have barred the use of federal funds to reimburse
states for providing Viagra under Medicaid, plus one that would
have stopped HCFA from taking "administrative action" against
states that do not cover Viagra.
The bill blocks federal funding for abortion under the
Federal Employee Health Benefits Program (FEHBP), except if the
life of the mother is in danger or in cases of rape and incest.
Similar restrictions, based on a conservative abortion policy,
have been imposed on the FEHBP in the past. But the new health
care mandates are going further and are becoming more detailed.
In a continuation of new mandates on the FEHBP, Congress and the
Clinton Administration have agreed to mandate that any private
plan that provides prescription drug coverage must also provide
prescription contraceptives. The mandate makes an exception for
plans that are offered by religious organizations and for doctors
who have religious or moral objections to prescribing
contraceptives. Please note: One of the more alarming features
of the Clinton Administration s health policy is its quiet
progress in burdening the FEHBP with new rules and mandates,
rather than promoting it as a market-based system passively
managed by the federal government and governed primarily by
consumer choice and competition. According to the staff of the
House Subcommittee on Civil Service, there have been 27 mandates
imposed on the FEHBP since 1990 by the Office of Personnel
Management (OPM). This is not President Ronald Reagan s FEHBP.
The bill accelerates the tax deductibility of health
insurance for the self employed, providing for 100% deductibility
by 2003, rather than 2007. A wise measure, and a shame it was not
given quality time on the floor of the House and Senate.
In other areas of note, the bill blocks any federal funding
of embryo research, as well as HCFA s regulations governing organ
transplants. HCFA had proposed to change the way that organs are
allocated, moving from a system based on geographical region to a
new system based on "medical need." The bill also blocks HCFA
regulations that would require all hospitals participating in the
Medicare program to notify all local "organ procurement networks"
of all deaths occurring in those hospitals. Finally, of note, is
a provision that requires insurers to cover breast reconstruction
procedures after mastectomies.
Process Over Debate
Besides describing what it is that they did,
let us note how they did what they did. It is pretty
much the same old routine - the one that has resulted in some of
the most problematic and downright silly policy prescriptions
that affect the medical profession today: the Resource Based
Relative Value (RBRVS) for setting Medicare physicians' fees; the
mandatory claims filing provisions; requirements that Medicare
pay hospitals not to train physicians; the overreaching fraud and
abuse provisions punishing "coding errors" with $2000 fines; and,
most recently, the notorious Section 4507 of the Balanced Budget
Act concerning Medicare private contracting and the huge
regulatory regime (833 pages in the Federal Register last count)
that accompanies the complex and cumbersome new thing that
Congress now inappropriately calls "Medicare Choice," in which
"private" plans all have the same government-standardized
benefits and are "private" in name only.
This sort of thing is happening in virtually every major
area of public policy. But in health care policy, Congressional
"liberals" have perfected the process. Take a leftist policy
prescription. Get the HCFA staffers or some carefully selected
policy wonks to testify to its merits. (Washington s health care
policy community is a pretty clubby crowd; lots of alumni from
the Clintons Health Care Task Force are always available to
offer their best advice on how to regulate the system even more
intrusively). The merits may actually be "discussed" in public
with reporters present, i.e. why this or that is clearly a "good"
idea, assuming you have real Congressional hearings on the
subject-not always a good assumption. All the better if one
can present the policy prescription as a "technical" issue that
won t excite too much opposition, but will guarantee either
befuddlement or boredom, and then insert the thing into a year-
end spending bill the size of a telephone book. Last minute
insertions are best. Give wide latitude to HCFA to interpret
the statutory mumbo-jumbo, and, of course, HCFA becomes
invariably creative in interpreting and applying the vague or
confusing law in reams and reams of mind-numbing regulation.
If all goes according to this well-practiced pattern, the
actual policy is either unknown or too impenetrable or confusing
to excite opposition until after it is passed. Or, to be more
precise, after it is discovered. The discovery can
take days or weeks, depending upon the energy of the policy
analysts who make them. The discovery usually is followed by
surprise, and in some cases shock. Questions to the relevant
committee staffers are met with defensive responses-"It s the
best we could do"; or, "The alternative was worse"; or, "You
don t understand"; or, "We had bigger fish to fry, and this was a
small part of the deal"; or, "Look, we ll correct it with a
technical corrections bill, so be patient." The technical
corrections bill isn t; or it doesn t come. But then, one has to
ask oneself, does one really want the Congress to enact a
"technical corrections bill," with the likelihood that it will
become another vehicle for even more bad policy?
Clean Congressional repeals of bad policy usually are not
politically practical-once the bad policy becomes anchored in the
way of doing things, it simply becomes part of the way of doing
things. Bad Karma.
The Need to Return to Constitutional Tradition
This latest Congressional exercise in legislative
gigantism is just the latest graphic demonstration of what is
wrong with modern American government-not just this Congress, but
modern American government in general. It is clear that it is not
a liberal problem or a conservative problem, or a Republican or a
Democratic problem. Both sides affront the integrity of the
legislative process and the spirit of the Constitution itself.
The wild and crazy thing is that we treat a wild and crazy
legislative process as if it were perfectly normal.
American political thought, particularly in its infancy
before and immediately after the Founding of the American
Republic, was supremely sophisticated. The central message of the
Founding Fathers, embodied clearly in The Federalist
Papers, is that the American Republic is to be governed by
the elected representatives of the people through a process of
rational deliberation. Knowing that in a free society, where free
association for common ends is natural, and that "factionalism"
and self interest were a natural byproduct, the Founders
carefully constructed an architecture of fundamental law and
political institutions to channel and control-or at least cool-
political passions by checks and balances and the separation of
That Constitutional vision is today hard to find among the
Congressional Members and staffers who churn out the year-end
telephone books. Remarkably, it is even dismissed as hopelessly
idealistic-an odd sort of charge. The writings and the
explanations of the Founders of the American Republic evince
little, if any, "idealism" about human nature or behavior, but
rather see men and women as creatures, endowed by their Creator
with free will, but flawed in both reason and will. If men were
Angels, James Madison of Virginia, the father of the
Constitution, once remarked, then government would be
unnecessary. But since human beings are not Angels, but imperfect
creatures with urges pressing them downward as well as upward,
laws to protect our liberty are necessary. What is clearly
unnecessary are impenetrable statutes, misconstrued by
bureaucrats who make up their own rules, far too often, as they
go along-unchecked or restrained by either the laws themselves or
the elected representatives who make them.
This spending pattern is now an ingrained feature of the
Washington landscape, so much so that even to question it is
considered somehow-watch the eyes of the cognoscenti roll
upwards-unsophisticated. In a recent public debate with a
spokesman for the huge American Association for Retired Persons
(AARP), this author noted, for example, that the notorious
Section 4507 had become law, passed overwhelmingly with
conservative votes in the House and the Senate, largely because
members of Congress had not even a clue what it was they were
enacting. When it had become clear, they were horrified at the
flood of faxes, the mass of mail, and those terrible telephone
calls from grannies across America. The response of a opponent of
Medicare private contracting was that I, a Washington veteran and
former denizen of the marbled corridors of power, should "know
better": that Congress would not pass any major bill,
particularly those big ones, if they had to follow the fatally
unrealistic prescriptions that I think are quite normal-namely to
read and to understand what it is that they are enacting. What a
weird idea! If people on Capitol Hill take such a wild notion
seriously, then there is the dreadful possibility that our
shelves will be stacked with fewer laws, and our little pals in
the great gray mass in the federal bureaucracy would have less
opportunity to do so much "good" to us-good and hard.
If Members of Congress started to check the Constitutional
basis of what it is that they are doing each time a piece of
legislation is advanced in Committee or set for debate on the
floor of Congress, and if they would refrain from doing things
that they are not Constitutionally empowered to do, Americans
would savor the sweet taste of limited government. That might be
too idealistic for the moment-not "politically viable" as they
say in this town. In the meantime, is it really too much to ask
them to read the bills? Jimmy Stewart, oh please Mr. Smith,
call your office.
More Medicare Trouble
Meanwhile the vaunted "Medicare Choice" program, brought
into being by another legislative monstrosity, the Balanced
Budget Act of 1997, is being aborted by red tape, even before it
gets off the ground, and the existing HMO risk contracts are
crumbling under the combined weight of law and regulation. There
is going to be less patient choice this coming year. Private
managed care plans are leaving the Medicare program: 96 health
maintenance organizations have announced that they are getting
out of Medicare, and 440,000 senior citizens, by January 1st,
will have to poke around among the shrinking alternatives or get
back into the traditional Medicare program. Some choice.
Robert Moffit is a prominent Washington health policy
analyst and Director of Domestic Policy at the Heritage