Update on AAPS v. Clinton
On November 9, 1993, US District Judge Royce Lamberth
ordered the White House to comply with the discovery requests of
AAPS in the ongoing case to open the proceedings of the Health
Care Task Force to the public. The Court also ordered the White
House to pay the legal fees incurred in bringing the Motion to
Compel. The Court's Order was one of the most strongly worded
orders issued against the White House since the Watergate
proceedings in the early 1970s.
Within 20 days after the Order was issued, the White House,
through Justice Department lawyers, presented counsel for AAPS
with two large boxes of documents, which include lists of members
of the interdepartmental working groups and its cluster groups,
some payroll and travel records, as well as agendas and minutes
of meetings. These materials have subsequently been made
confidential by an agreed court order.
At the same time, the White House moved for an extension of
time to complete the release of all the documents, complaining
that additional time was necessary due to the extent of the
materials. In the meantime, the White House produced two
additional boxes of documents and records, the latest just before
AAPS attorneys have responded to the Motion for an Extension
of Time by filing a demand to be allowed to go ``on site'' and
inspect all of the documents for themselves. A court order on
the Motion and Response is expected at any time.
In the meantime, AAPS lawyers are examining some 4,000 pages
of material to determine whether the interdepartmental working
groups and cluster groups made recommendations to the President,
and whether they were composed ``wholly of full-time officers and
employees of the federal government.'' In addition, AAPS lawyers
are conducting an independent investigation of the identities of
the individuals involved in the Task Force. Depositions of key
White House officials will probably be taken; Judge Lamberth, in
his November 9 Order, clearly indicated his willingness to
consider agreeing to such unusual discovery.
Also expected is an order on the amount of attorney fees
that the White House will have to pay due to its ``outrageous''
behavior in attempting to block legitimate AAPS discovery.
On completing discovery and examining all records and
documents, AAPS counsel will move the Court to declare that the
interdepartmental working groups and cluster groups are advisory
committees as defined by the Federal Advisory Committee Act, 5
U.S.C. App. 1-14. If the Court agrees (and AAPS counsel
believes that the evidence is overwhelming), all of the records
of the President's Task Force on Health Care Reform will be
opened to the public.
Can Clinton Beat the Political Clock?
``One of the biggest obstacles facing the Clintons in their
drive for a national health system reform plan is the political
calendar....[T]he President and Mrs. Clinton have run into a
number of setbacks, many of which were unforeseen.
``A ruling had to be made whether or not Mrs. Clinton's
voluntary service as head of the task force violated any ethics
standards previously set for relations of White House
personnel....'' (Participation '94, American Medical
Owners of Home Health Agencies Sentenced to 10
Years in Prison and $7 Million in Fines
Sentences of three owners of home health agencies convicted
of Medicare fraud were upheld by the US Court of Appeals for the
Sixth Circuit (U.S. v Henry, CA 6, Nos. 92-6649, 6650,
On appeal, one of the defendants contended that the district
court incorrectly calculated the amount of money stolen from
Medicare funds in determining his offense level at sentencing.
The appeals court ruled that the defendant failed to present any
evidence to establish that the government's calculation was
inaccurate or ``outside the universe of acceptable
computations'' (BNA's Medicare Report Dec. 10,
Mail Fraud Statute Used Against
Billing more than the Medicare-allowed charge may subject
physicians to the civil mail fraud statute. Pennsylvania
dermatologist Joseph Corson ``voluntarily'' agreed to an audit of
his billing practices and reimbursement of all patients
``overbilled'' (allegedly due to retroactive changes in the
rules), under threat of having all his assets frozen up to an
amount suspected of being acquired through fraudulent
means. Dr. Corson also agreed not to take retaliatory action
against patients who cooperated with the government in the case.
The Pennsylvania Department of Justice will make previously
under-enforced junctures against overbilling a priority in the
coming months, according to the Medicare Compliance
Alert, July 19, 1993.
Job Opportunities for Informants
Under the property forfeiture laws of the last 20 years,
informers can benefit from the proceeds of cases they help to
make. Convictions can be based on their uncorroborated
testimony, and the conviction can now lead to a death sentence.
Four persons have so far been sentenced to die for making a drug
deal. The informer might have traded testimony for forgiveness
of his own crime (say murder), and may also have entrapped the
convict into making the deal and using a coveted piece of
property to do it. For example, he might have consulted his
Rolex watch to tell the informant the time (Dannie M. Martin,
New York Times 4/17/93).
The Law of the Land
``No State shall make or enforce any law which shall abridge
the privileges or immunities of citizens of the United States;
nor shall any State deprive any person of life, liberty, or
property, without due process of law; nor deny to any person
within its jurisdiction the equal protection of the laws.''(US
Constitution, Amendment XIV).
``The most frightening news brought about the Holocaust and
by what we learned of its perpetrators was not the likelihood
that `this' could be done to us, but the idea that we could
do it'' (Modernity and the Holocaust by Z. Bauman,
AAPS welcomes Drs. Daniel Allan of Las Cruces, NM; Stephen
Anderson of Bellevue, WA; Jan Bacon of Corsicana, TX; John Barnes
of Corsicana, TX; John W. Bass of Phoenix, AZ; Christopher Bell
of Crossville, TN; Joseph S. Bernstein of Brookfield, WI; Major
E. Blair, Jr. of Denton, TX; Deborah Blair of Alexandria, VA;
Alan Burckin of Walnut Creek, CA; Robert A. Callahan of Tampa,
FL; Max Cannon of Great Falls, MT; Ann Cea of Rye Brook, NY;
David A. Cech of Houston, TX; Jeffrey L. Childes of Muncie, IN;
Richard Coughlin of Los Gatos, CA; John C. Doelle of Puyallup,
WA; Laura D. Edwards of Houston, TX; Terry Lynn Edwards of
Southold, NY; Charles Egley of Peoria, IL; Frank Ehrlich of Bryn
Mawr, PA; Ronald M. Fletcher of Edmonds, WA; James A. Fosnaugh of
Lincoln, NE; John C. Gallagher of Green Bay, WI; Leo Galland of
New York, NY; Reuven A. Geller of Phoenix, AZ; Stephen D. Glacy
of Phoenix, AZ; Gideon Hill of Glenside, PA; William W. Horsley
of Scottsdale, AZ; B. Sharon Cole Jensen of Seattle, WA; Reldon
R. Jones of Ceres, CA; Jamie Kapner of Scottsdale, AZ; Vicente
Kaw of Middlesboro, KY; Randall Krakauer of Freehold, NJ; Phil
Labove of Morris Township, NJ; William T. Lampe II of York, PA;
Mark Landt of Medina, OH; William M. Lee of Carefree, AZ; Larry
S. Lefors of Yakima, WA; Diane LoRusso of Rye Brook, NY; Michael
Martindale of Jackson, TN; Greg Maurer of Bellevue, WA; Don G.
McDowell of Alexandria, LA; Blake McKinley of Spokane, WA; Dennis
Mollman of Chesterfield, MO; Debra Monde of Lathrop, CA; Tim
Moore of Plano, TX; Steven Musgrave of Danville, PA; Clifford E.
Myers of Peoria, IL; Paula Nadell of Phoenix, AZ; Mark A. Nelson
of Brookfield, WI; Douglas W. Nicolarsen of Boise, ID; Michael S.
O'Connor of University Heights, OH; Neil J. O'Keefe of Spokane,
WA; Paul E. Olenski of San Diego, CA; Craig A. Olson of Spokane,
WA; T. Otis Paul of San Francisco, CA; Jon Peterson of Houston,
TX; Robert V. Plehn of Taft, CA; Jeffrey Pont of Phoenix, AZ; N.
S. Prakash of Phoenix, AZ; Galen M. Reimer of Fallon, NV; F.
Peter Rescigno of Essex Falls, NJ; Charles L. Ridley III of
Macon, GA; Christopher Roberts of Scottsdale, AZ; Larry C.
Roberts of Amarillo, TX; Marc J. Rosen of Glendale, AZ; Mark
Ruttle of Palos Park, IL; Michael G. Ryan of Bradenton, FL;
Douglas E. Smith of Boise, ID; Sidney L. Stapleton of Decatur,
GA; Robert H. Stine of Peoria, IL; Mark Dillen Stitham of Kailua,
HI; Glen Sublette of Butte, MT; Craig Suiter of Scottsdale, AZ;
Eldon J. Swenson of Fox Point, WI; Deniz Tek of Billings, MT;
Stephen Tucker of Woodlands, TX; Robert R. Urban of Monongahela,
PA; Ivy M. Warsinski of Maryville, TN; Robert M. Wilson of
Lockport, NY; Thomas Wilson of Phoenix, AZ; Brett Alan Wohler of
Alexandria, VA; and Allen Woods of Valdosta, GA.
New student members are Kas Ray Badiozamani and Troy Falck
of Seattle, WA.
Letter to the Editor
Today I sold my soul for a few shekels. I feel like Judas.
My office manager held up the gun used by the Medicare
Bureaucrats and said ``Sign up!'' because:
You will be paid more (bribery),...
You will not have to fuss with Medicaid problems crossovers,
(You don't have to try to determine the patient's
income...[$39,720 is the ``poverty limit'']),
You are already a peon, and you cannot fight city hall
because they will always change the rules in their favor and they
have unlimited enforcement power....
So I sold my soul,...purely and simply on a principle that
created Dachau: ``with no weapon you are obliged to do what the
bureaucrat says-his man has the gun-fight back and you are
Alas, when I look up ``surrender'' in the quotations book,
they mostly refer to God, not Mammon.
Milton said, ``How many Altars have been thrown down, and
how many theologies and heavenly dreams have had their bottoms
knocked out of them while he [Mammon] has sat there...''
(Paradise Lost I 678-680) Where is our federal
government forcing us?....
Robert M. Webster, MD, Fairburn, GA
Feb. 18, Regional meeting, Hyatt Regency, Bellevue, WA.
Speakers include Lois Copeland, MD; Kent Masterson Brown;
Peter Ferrara, Heritage Foundation; Merrill Matthews, NCPA;
Rep. Phil Dyer of Washington State; Drs. Estelle Yamaki and
Neal Shonnard on state physicians' response to Washington
health-care reform; and Madeleine Pelner Cosman, editor of
National Trial Lawyer. Call Tim Schellberg at
(206)459-8622 for information or registration. Cost is $85
before Jan. 31; write check to AAPS--WA chapter, 10318
Wildwood Lane SE, Olympia, WA 98503. For room reservations,
call (800)233-1234 and ask for $89 AAPS conference rate.
Feb. 19, AAPS Board of Directors meeting, Bellevue.
Citizens Against Rationing Health (CARH) event
call Tom Katina (202)546-6555. Feb. 2: Baton Rouge, LA;
Mar 19: Riverside, CA. Dates not yet confirmed for
Milwaukee, Sacramento, Tampa, Lansing, Athens (GA),
Minneapolis, and Fargo.
Oct. 12-15, 51st annual meeting, Atlanta, GA.
Legislative AlertThe 1994 Timetable
Congressional staff never sleep, even during the Christmas
break. While their bosses are out testing the waters back home,
professional staff have been preparing for the political fight of
the century. As for the White House, ``health care'' is its
number one priority for 1994, followed by welfare reform and
``investment in human capital'' (translation: more social
spending.) But the Christmas recess has been rudely interrupted
by a new round of widely publicized allegations of extra-marital
affairs by the President and continuing controversy over the
Clintons' relations with a failed savings and loan in Arkansas.
The President and his shell-shocked White House staff are
struggling to regain control over the domestic policy agenda.
Precious time and energy have been lost.
On February 3, 1994, a big hearing is already scheduled
before House Ways and Means Committee on the topic of employer
mandates. Small business representatives and Clinton Plan fans
will slug it out in broad daylight.
Many medical organizations back a federal mandate on
employers, including the American College of Physicians, the
American Academy of Family Physicians, the American Academy of
Pediatrics, the American College of Obstetricians and
Gynecologists, the American College of Preventive Medicine, the
American Medical Women's Association, the American Society of
Internal Medicine, the American Thoracic Society, the National
Hispanic Medical Association, and the National Medical
Association. President Clinton stated that the presence of these
medical organizations at a December White House briefing
``debunks the idea that this [his plan] is a big government plan
that harms the doctor-patient relationship.''
Even with the AMA backing away from an employer mandate, the
impressive array of medical opposition to their position has
small business groups digging in for the fight of their
professional lives. The National Federation of Independent
Business (NFIB) reports that 84% of respondents in a Gallup
survey of over 1000 small business owners opposed any mandate
making them pay Clinton's proposed 80% of the cost of a standard
benefit package. And 46% said that a federal subsidy would
strengthen their opposition to a federal mandate!
At the House Energy and Commerce Committee, a fast- track
timetable for the Clinton Plan is being discussed: all of the
subcommittee work is to be done by March 31st and full committee
action is to be completed by April 30th. The idea is to get the
Clinton bill to the floor by the August recess, with conference
action either before or shortly after the August recess, thus
fulfilling the Clinton Administration hopes of getting a bill
passed before the 1994 Congressional elections. This would likely
mean a September vote in both the House and Senate, assuming that
things go relatively smoothly for the Clinton team. But don't
depend on it.
The other big committee in the House is Ways and Means.
Congressman Dan Rostenkowski (D-IL) is telling his fellow
Committee members that he is not wedded to any kind of rigid
timetable. After the initial negative reactions of witnesses to
the Clinton Plan in the first round of hearings, Rostenkowski,
once burned by the Medicare Catastrophic debacle in 1989,
reiterated his favorite theme: it's not important that Congress
do it fast, but that Congress do it right.
At the same time, Congressional backers of the Clinton Plan
are clearly worried about Rostenkowski's continuing legal
problems related to investigations of the House Post Office. If
these problems continue to distract Rostenkowski (they are
serious enough for him to hire hotshot Washington lawyer Bob
Bennett), or even force him to step down, the next Member in
seniority is Congressman Sam Gibbons (D-FL). Gibbons favors
extension of the Medicare mess to the entire population, like
Stark of California, and can thus be counted in the ``single
payer'' camp. Also, Gibbons lacks Rostenkowski's raw political
muscle, and the White House would be the political loser if
Rostenkowski were to go down for the count.
Even if everything were to go smoothly for the Firm of
Clinton and Clinton in the House of Representatives, the prospect
of turf warfare in the Senate between the Senate Finance
Committee and the Senate Committee on Labor and Human Resources
(i.e., Kennedy v. Moynihan) is real enough, based on strong
institutional and philosophical differences.
In spite of all of Ira Magaziner's talk about trying to
create a ``centrist coalition'' in Congress (talks with Senator
Chafee, etc.), it is increasingly clear that the real base of
support for the Clinton Plan in the House is the Democratic Left.
Of the 102 cosponsors of the Clinton plan in the House, 55 are
also cosponsors of Congressman Jim McDermott's bill creating a
Canadian-style system. This is not surprising, even though
McDermott and Stark may carp at Clinton's Plan in public. In the
final days before its introduction, the White House agreed to a
series of changes in the Clinton bill, insisted upon by Senator
Paul Wellstone of Minnesota, that would make it administratively
easier for individual states to adopt a Canadian-style system.
These adjustments pave the way for a Long March through the
states, resulting in an eventual national triumph of a Canadian-
style health care system.
While Clinton's forces are reaching out the to the
Congressional left, Congressman Jim Cooper (D-TN) is making
overtures to the Congressional right, and considering adding a
Medisave Account provision modelled after Senator Phil Gramm's
proposal to his managed competition bill. Any impending marriage
of a Jackson-Hole-style managed competition proposal with
Medisave would surely alter the political dynamics in the House.
The Numbers Game
The debate on Capitol Hill is being fueled by a steady flow
of numbers from partisan and nonpartisan sources: projections,
actuarial reports, statistical analyses, and econometric studies.
The Commerce Department projects that national health-care
spending will exceed $1 trillion next year (about 15% of the
gross domestic product).
The Administration has finally released a line-by-line
description of its own bill, the Health Security Act (HR 3600)
and S1757), accompanied by its own cost estimates for new federal
health programs. The Administration concedes new federal
administrative costs: $2.1 billion for new health information
systems, $2 billion for a health insurance risk pool for the
uninsured during the transition to the new regional alliance
system; and $1.1 billion for federal oversight of the regional
alliances and the state implementation of the new system.
Families USA, which acts like a wholly owned subsidiary of
the Firm of Clinton and Clinton, released a December report that
says that 53 million Americans will gain by the Clintons'
prescription drug benefit, and the Clinton bill would guarantee
coverage for 54 million Americans by 1998 who would otherwise
lose it or lack it entirely. Echoing Hillary's outbursts, the
number-one villain in the health care system for Families USA is
the insurance industry.
More important is the December report of the respected
Employee Benefit Research Institute (EBRI), which states that the
number of Americans without health insurance increased 2.3
million in the last year, raising the total estimated number of
uninsured at any given time from 37 to 38.9 million. According to
the EBRI's December 1993 report, the major reason is loss of
coverage for workers in small business. While the new figure of
39 million uninsured is likely to be quoted extensively, William
Custer, Director of Research at EBRI, cautions that this number
represents only a ``snapshot'' of the general population, not a
permanent class of uninsured people. Because health insurance in
the United States is largely tied to employment, loss of a job
translates into a loss of health insurance. During the course of
the year, as many as 53 million people could be without insurance
for ``a month or more,'' and ``as few as'' 22 million could be
uninsured for the entire year.
In addition, EBRI reports that over the past three years
there has been a ``gradual decline'' in the number of Americans
getting health insurance coverage through their place of work.
Predictably, White House allies in Congress seized upon the EBRI
findings to highlight the urgency of passing Clinton's health
care reform plan, especially employer mandates. On the other
hand, conservatives on Capitol Hill-Senators Nickles and Hatch-
are highlighting the need to break the 50-year-old tax-based link
between private health insurance and the place of employment.
Dodging Bullets and Doctoring the Spin
Even more important than the EBRI study was the long-awaited
analysis by Lewin-VHI, the econometrics firm that models health
care reform. When Lewin released its findings in early December,
outwardly the Administration was all smiles. Jim Carville,
Clinton's chief political guru, was brought in for Spin Control
on the Lewin numbers. The Basic Message: Clinton's financing
``works.'' The media have generally picked up this favorable
theme, and the Lewin analysis did not sink the Plan, as some
Clinton allies on the Hill feared it might.
Everything is in the deeper details of the report. Lewin
says that if you accept the Administration's
assumptions, including its assumption to hold down health
care spending by the amount ordained in the premium caps, the
math works out-mostly. Mr. Larry Lewin, President of Lewin-VHI,
says that the growth of managed care under the Clinton Plan can
indeed slow the growth in health care spending, but it's not a
``sure thing.'' As for the federal spending caps, they may be
achievable ``on paper,'' Lewin noted, but that will depend on the
``political will'' of the public and the politicians, and that's
``not a sure thing either.'' Recall that Clinton's plan calls for
health care spending increases to match the growth of the CPI by
1999. This is going to be a tough target under anybody's
scenario. What the Lewin study underscores for Members of
Congress is the need to examine closely the underlying
assumptions of the econometric analyses. Look for critics to use
the Lewin data for some tough questioning of Administration
witnesses over the next few months.
Just about everybody on Capitol Hill understands this. So
does the White House. Indeed, one unnamed White House staffer was
quoted by the December 20th Newsweek: ``We dodged a
Some older public-relations problems returned. While 52% of
families would expect to see health care costs fall by $20 or
more each year, 45% would pay more. According to the Lewin
analysis, 30% would pay more for increased coverage, and 15%
would pay more and get less. Recall that HHS Secretary Donna
Shalala caused a stir on Capitol Hill two months ago when she
admitted to Senator Moynihan that 40% of Americans with insurance
would be paying more.
Although the short-term press spin to the Lewin report
turned out OK for the Administration, the 196-page report itself
could prove more than merely troublesome for the Clinton White
House. For example:
The insurance premiums for plans in the regional alliances
are in fact 17% higher than the official estimates. This
means $37 billion in higher federal subsidies to employers
and employees or a real total of $153 rather than $116
billion in subsidies between 1996 and 2000.
The net projected deficit reduction between 1994 and 2000
would be $25 billion instead of $103 billion.
Overall, employers would pay more for health care
under its Plan through the year 2000, not less as originally
stated. Manufacturing, transportation, communications, and
utility companies would see a reduction in their health care
costs, but retail trade and service industries will see
increases in these costs.
Lewin's argument that the Administration has underpriced its
comprehensive benefits package is reflected in other independent
analyses. The estimated family premium for the Clinton package is
projected at $4360 per year by the Administration. While Lewin
puts the cost at $5,101, the Wyatt Company, a benefits consulting
firm, puts it at $5155. On top of that, Wyatt projects even
bigger subsidies to the poor under the Clinton Plan and argues
that the cost of paying for early retirees will wipe out any
chance that the Clinton Plan could avoid deficits.
Ghosts of the Medicare Catastrophic Past?
In 1988, the AARP was the main force lobbying the for the
ill-fated Medicare Catastrophic Coverage Act, repealed in 1989
after explosions of outrage among senior citizens saddled with
paying for the new Medicare benefits. Now, AARP has proudly
sponsored a poll on the Clinton Plan that shows 51% of Americans
favor it, 36% oppose it, and 13% register no opinion. However, of
the 25,000 members of the AARP who cut out a coupon from the AARP
Bulletin asking for their initial reaction to the Clinton Plan,
82% said they were opposed. AARP staff, doubtless
shocked, are saying that the AARP members' response is not really
Warning the GOP
Impact is hard to gauge during the Congressional recess. But
the latest hot-button item on Capitol Hill is a December memo
from William Kristol, Vice President Dan Quayle's former Chief of
Staff, to Republican leaders: Forget negotiations to make a bad
idea better. Tell Americans how much they stand to lose if this
``Great Society-scale upheaval'' should come to pass.
``We don't want to wound the plan,'' Kristol said. ``We
want to kill it.''