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of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto
Volume 47, No. 1 January 1991
``DUMPING'' MANDATED BY LAW
Several methods might be used to provide medical care to
patients who are uninsured and otherwise unable to pay:
(1) payment through taxation, whether in public hospitals
or publicly funded programs such as Medicare or Medicaid;
(2) encouraging charitable care, whether through peer group
pressure, religious exhortation, tax credits, or relief from
liability exposure; and
(3) arranging loans for those who are expected to be able
to earn money after their health is restored. (This method,
while favored for ``luxuries'' like a college education, is
seldom considered for medical services).
Taxation has political limits. Although the majority of
Americans say they favor equal access to health care without
regard to ability to pay, only 22% indicated a willingness to pay
more than $200 per year for a universal health plan (N Engl J Med
323:208-212, 1990). There is much less support for increasing
Medicaid expenditures. The public sees Medicaid primarily as a
welfare rather than a health care program, and 41% believe that
the nation is already spending too much on welfare (JAMA
Charity has practical limits. Private, voluntary hospitals,
which provide about 60% of the nation's uncompensated care, have
been forced to operate more like businesses, with increasing
restrictions on their ability to cross-subsidize. Thus, they
have been under increased pressure to transfer patients for
Public hospitals that receive such transfers have complained
of an ``epidemic of dumping.'' In addition to concern about
their negative operating margin (which averaged 5% in 1987),
hospitals cite risks to the health of the transferred patients.
There are numerous anecdotes about appalling mistreatment of the
indigent, but few statistics about actual, avoidable adverse
outcomes. Parkland Memorial Hospital in Dallas undertook a two-
year study of interhospital transfers, finding that 28% of the
transfers were unexpected and 30 patients (1.6% of 1,897) reached
Parkland in an unstable condition, 17 from facilities that had
the equipment and staff to stabilize them. Other studies showed
a much higher percentage of unstable patients-up to 27%. None
defined the term ``unstable'' (J Legal Med 10:433-478, 1989).
In the common law, there are several rationales for holding
hospitals to a duty to treat patients in an emergency-the only
recognized nonstatutory right to medical care. The most stringent
doctrine was established by the Supreme Court of Arizona in the
case of Guerrero v. Copper Queen Hospital. Citing state
regulations requiring all general hospitals to maintain an
emergency room, the court held that public policy dictated that a
hospital (even a private hospital) could not deny emergency care
to anyone without cause.
Many states have passed laws related to patient transfers.
The Texas statute served as a model for the federal ``anti-
dumping'' provision in the 1985 Consolidated Omnibus Budget
Reconciliation Act (COBRA). The Texas law requires stabilization
of patients prior to transfer; acceptance by the receiving
hospital before the patient is sent; patient consent to the
transfer; and the transfer of adequate records along with the
patient. Although a range of sanctions, from misdemeanor to
felony, is prescribed, these penalties have seldom been imposed.
Compliance is perceived to be excellent; Parkland filed only
seven complaints between 1985 and 1989 (ibid.)
The COBRA applies a fourth method of assuring medical care,
when tax revenues are inadequate and charity runs out: the use of
force, as by threatening penalties substantially worse than the
loss expected from treating an uninsured patient (also see p. 3).
COBRA forbids transfer of ``unstabilized'' ``emergency'' patients
(terms undefined), unless the patient requests the transfer or
certain conditions are met, including certification that the
expected medical benefits to the patient outweigh the risk of
To address an underreporting problem, HHS would require the
receiving hospital to report suspected ``dumping'' within 72
hours, under pain of termination of the hospital's Medicare
To address the government's failure to pursue violators,
COBRA has a private attorney general provision, allowing a
private cause of action to both individuals and receiving
hospitals. Congressman Stark has proposed legislation like that
already enacted by California requiring the posting of flyers to
improve beneficiary awareness. California also permits
reasonable attorney's fees to litigants, in order to create an
incentive for attorneys to assist ``dumping'' victims even when
monetary damages are not great (ibid).
New amendments to COBRA, which took effect in July, extend
liability for ``dumping'' to on-call physicians, even if they
don't answer their telephone or appear at the hospital (Medical
Economics 11/26/90), and double the fines to $50,000.
Is ``dumping'' a Newspeak term? It is used to apply to
transfers in one direction only: from the private sector to the
public. It is not used when a public facility or HCFA decides
that care is ``unnecessary,'' as when Parkland or DC General
determine that 38% of ``dumped'' patients do not need admission
after all (J Legal Med, op. cit.)
What is the term for an emergency room that is forbidden to
close its doors or to transfer patients, or for a physician
forced to work without compensation? Could it be a synonym for
society's legally mandated dumping ground?
A Deal ``Good for a Limited Time Only''
Physicians have only until the end of 1990 to decide whether
or not to sign a participation agreement with Medicare for 1991.
Aetna, the Medicare carrier for Arizona, has some advice: ``If
undecided, elect to participate.''
To help doctors decide, consultants advise them to ``crunch
the numbers.'' However, there will be no numbers available to
crunch until at least a month after the deadline for making the
decision. Aetna explained, ``sufficient lead time was not
available for us to provide you with 1991 fee screen amounts or
applicable charge limits during this enrollment period.''
Potential advantages for nonparticipating physicians (less
paperwork and the ability to balance bill) are being eliminated
or reduced by law. And participating physicians may actually
receive greater advantages than those legislated by Congress. By
law, participants' claims are processed at least seven days
faster, but the 90- to 120-day accounts receivable invariably
have twice as much outstanding for nonparticipating practices
(Medical Economics 11/26/90).
Even when the fee screens become available, physicians
cannot rely on them. Aetna of Georgia is attempting to recoup $2
million-plus interest-that it overpaid physicians as a result of
failing to enter recently reduced fees into the computer.
(Atlanta physicians have challenged the recoupment effort in
court; a decision is pending.)
Aetna officials said they were not going after patients of
nonparticipating physicians ``because it would be too cumbersome
to track down the small amounts of money paid to the program's
thousands of beneficiaries'' (Atlanta Journal and Constitution
12/4/90). However, physicians should not rely on this statement;
HCFA could try to transfer the cumbersome procedure to
Some Georgia ophthalmologists would like to say ``shove the
whole Medicare program'' (ibid.)-if they had an alternative.
Ophthalmologists currently receive 45% of their gross income from
Medicare. For all physicians, Medicare accounted for an average
of 23% of the gross, up from 17% in 1981 (Medical Economics
Participating physicians will be allowed a short period to
disenroll after the fee screens are released. HCFA ``wanted to
be flexible...for physicians who didn't know how adversely they
would be affected'' by the new fees.
From Capitol Hill
EKG Interpretations of Zero Relative Value. As of
January, 1992, physicians will no longer be able to receive
Medicare payment for interpreting an EKG if the test is
``performed or ordered to be performed...as part of or in
conjunction with the visit or consultation.'' And since the
interpretation will still be considered a ``covered service,''
physicians will not be able to charge patients for it. This
provision, which was slipped into the FY 91 budget
reconciliation, is expected to save Medicare $725 million over
the next five years. Only about 20% of routine EKG readings will
probably qualify for payment. (The definition of ``routine'' is
likely to be a point of contention.) The rationale for the
change is that physicians do not receive extra payment for
interpreting other clinical diagnostic tests.
``Anti-Hassle'' Legislation. The budget law included
the provisions of the ``anti-hassle'' bill authored by Roy
Rowland (D-GA) and Max Baucus (D-MT), including reciprocal
billing arrangements for covering physicians, but not including
the ban on charging for information. Screens used to decide
whether doctors are providing too much care will be released in
six carrier regions, so that HCFA can monitor whether removing
the veil of secrecy triggers overutilization, as HCFA
Administrator Gail Wilensky fears it might.
More Fee Freezes and Reductions. The Omnibus Budget
Reconciliation Act provides that physician fees, other than for
primary care services, will be frozen at current levels through
1991. For primary care services, a 2% increase is allowed.
``Overvalued'' procedures will be subject to deeper cuts.
Additional restrictions are placed on assistant surgeons. The
fee for the assistant cannot exceed 16% of the fee schedule
amount for the global surgical service, and no payment will be
made at all if fewer than 5% of such surgical services, nation-
wide, involve a physician acting as assistant. A ``limitation on
beneficiary liability'' states that the 1991 payment limit for
``evaluation and management services'' provided by nonpar-
ticipating physicians may be up to 140% of the 1991 recognized
payment amount, instead of the proposed 125%. This will reduce
the anticipated drop in primary physicians' payments pending
implementation of the relative value scale.
The cost of running a medical practice leaped 19.8% last
year, the biggest one-year increase in the 1980s, although the
Consumer Price Index climbed only 4.6%. The largest increase was
payroll for nonphysician assistants (up 11.6%) (Medical Economics
Computerized Reviews Initiated by PROs. Seven PROs-in
Alabama, Arizona, Colorado, Connecticut, Iowa, Utah, and
Wisconsin-have been using a new automated system called the
Uniform Clinical Data Set (UCDS) since Nov 1. The computer
algorithms incorporate 1600 data elements against which reviewers
abstract medical records. HCFA intends the new system to be
``budget neutral'' compared with the current $1 billion three-
year PRO expenditures. At present UCDS results in a 48% referral
rate to physician reviewers, higher than the average for manual
review by nurses. Payment denials are running higher than the
average of 2% under manual review.
UCDS will make possible the storage of vast amounts of
information that is currently lost after the review is completed.
This could be useful for developing practice guidelines. And
HCFA Administrator Gail Wilensky notes the importance of ongoing
monitoring for ``aberrant behavior'' (Physicians Financial News
Nuclear Medicine Gets Temporary Reprieve from Clean Air
Bill. A 24-month exemption from adherence to the emission
standards signed into law Nov 15 (PL 101-549) is expected to save
hospital nuclear medicine departments $6 million. During the two
years, the Environmental Protection Agency (EPA) will study
whether nuclear medicine emissions, now regulated by the Nuclear
Regulatory Commission, are within an ``ample margin of safety.''
According to AHA Executive Vice President Paul Rettig, dual
controls on radionuclide emissions would ``dramatically raise
health care costs with no real benefit to either patients or
community'' (Health Legislation 11/21/90). The negative impact
would be greatest for treatments for hyperthyroidism and thyroid
Fifth Circuit to Hear ``Patient Dumping'' Case
The US Court of Appeals for the Fifth Circuit will hear a
Texas physician's appeal of a $20,000 penalty imposed by the
Department of Health and Human Services (HHS) for the alleged
violation of the federal ``patient dumping'' statute, the Bureau
of National Affairs reports in its Medicare Report. Oral
arguments before that court will probably be heard in March,
The federal ``patient dumping'' statute, formally entitled
the Emergency Medical Treatment and Active Labor Act (codified at
Title 42, US Code, Section 1395dd), requires every hospital that
participates in the Medicare program to provide a screening
examination and treatment for emergency medical conditions and
women in labor regardless of the person's ability to pay for such
treatment. It further prohibits the transfer of an indigent
patient until any existing emergency medical condition has been
``stabilized'' or, for a woman in active labor, the baby has been
delivered. The statute also requires hospitals participating in
the Medicare program to keep a list of on-call physicians, who
are required to treat indigent patients at the request of an
emergency room physician if the patients are in active labor or
have an emergency medical condition. Hospitals and physicians
are subject to civil monetary penalties of $50,000 for each
violation of the statute. The statute also creates a private
civil cause of action that allows any ``dumped'' patient to sue
the hospital for damages.
In June, 1990, the Departmental Appeals Board of HHS
affirmed an administrative law judge's finding that the Texas
physician, Dr. Michael L. Burditt, knowingly violated the patient
dumping statute by transferring a woman who had high blood
pressure and was nine months pregnant to another hospital more
than 150 miles away. The Texas Medical Association is supporting
Dr. Burditt in his appeal of the decision.
According to BNA's Medicare Report, Dr. Burditt argues in
his appellate brief that the patient dumping statute violates the
Taking Clause of the Fifth Amendment to the US Constitution,
which prohibits the government from taking private property for a
public purpose without the payment of just compensation. The
brief maintains that the statute forces physicians to provide
services free of charge to remedy the ``public'' problem of
indigent patients. The brief also argues that ``because [the
statute] compounds the taking problem with the imposition of
heavy fines, it appropriates an identifiable segment of
physicians' property without compensation and is therefore
unconstitutional'' (Medicare Report 721, Bureau of National
The brief also notes that while the US Supreme Court has not
directly addressed the issue of whether professional services
constitute ``property'' for the purposes of the Takings Clause of
the Fifth Amendment, it has ruled that professional services
constitute ``property'' for purposes of the Due Process Clause of
the Fifth Amendment.
In addition to the Takings problems that plague the patient
dumping statute, at least one legal commentator has argued that
the statute also has possible constitutional deficiencies under
Article 1, Section 8 of the US Constitution, known as the Taxing
and Spending Power (see McClurg, ``Your Money or Your Life:
Interpreting the Federal Act Against Patient Dumping,'' 24 Wake
Forest L Rev 173 (1989). The Taxing and Spending Clause requires
that conditions attached to a federal program be related to the
federal interest in the particular national program to which the
condition is attached. Under the federal patient dumping
statute, a hospital's ability to receive Medicare funding is
contingent upon its compliance with the statute. The problem
with this contingency is that Medicare recipients are likely to
constitute only a small percentage of ``dumped'' patients. A
minority of persons seeking emergency treatment will be Medicare
patients, and there is little incentive to ``dump'' them because
Medicare pays for at least some medical services. Instead, the
vast majority of ``dumped'' patients will be non-Medicare
patients who simply have no source of payment, government or
other. Thus, the relationship between the condition-comply with
the statute or lose Medicare funding-and the federal purpose of
the expenditure-adequate health care for the elderly and others
eligible under Medicare-is tenuous at best.
The Limited Legal Consultation Service will continue to
follow the developments in the Texas case in the coming months.
Psychiatrist Acquitted of Medicaid Fraud
After only one hour's deliberation, a jury acquitted New
York psychiatrist Eugenin Liteanu, MD, of five felony counts of
Medicaid fraud carrying a maximum prison sentence of four years
The prosecutor alleged that Dr. Liteanu had billed for full
sessions when a number of sessions had lasted for less than 30
minutes. Defense counsel contended that the sessions were
deliberately cut short by a fictitious patient, a wired Medicaid
investigator, and that Dr. Liteanu had followed the standard
professional procedure of billing for the entire scheduled
session. Further, counsel stated that the jury was outraged by
the use of taxpayer's money on a case that involved only about
$90 even if one believed everything the prosecutor said.
Medicaid chief Edward J. Kuriansky stated that Liteanu's
case was similar to 27 others, all of which resulted in
convictions. An expert witness for the defendant, noting that
the prosecution had tried to extract $20,000 from Liteanu before
the trial, speculated that some of these convictions might have
actually been legalized extortion.
Dr. Liteanu said that even his early experience of Nazi and
Soviet rule in Romania did not prepare him for the Medicaid
``In America, I didn't expect this to happen. In my wildest
imagination I couldn't conceive to be entrapped by the Department
of Social Services.''
Liteanu warned that the tactics used by the Medicaid fraud
units create suspicion and mistrust between patient and
psychotherapist and make psychiatrists more reluctant to treat
The jury decision, Liteanu said, shows ``the triumph of our
democratic system of justice in the United States. If we don't
fight for our democracy, we will lose it.''
excerpted from H Fishman, Psychiatric Times 12/90
The Trouble with Canada
The chapter on Canada's sick health care system, written
principally by William Goodman, MD (author of AAPS pamphlets on
the same subject), has been called one of the best in William
Gairdner's book The Trouble with Canada. As one reviewer states,
``it addresses the largest area of government expenditure and
arguably the largest area of waste and confusion....In Canada,
the state now pays quasi-employees to care for patients....People
with unhealthy lifestyles are being subsidized by those with
The book has been on the Canadian non-fiction best-seller
list for seven months. It can be ordered for $31.95 (US) from
Stoddart Publishing, 34 Lesmill Road, Don Mills, ON M3B 2T6,
Insights from Moscow
Some gems from fall issues of Moscow News:
Not only new thinking but common sense call on us at long
last to shed the absurd practice by which government agencies
make their own laws. This refers to any agency and particularly
to such a special agency as the KGB....
The two million Cubans [in Miami], living under market
conditions, produce a GNP valued at $30 billion....The GNP of
Cuba, with its population of ten million, amounts to a mere $8
The policy of the state is to issue a state order, but not
provide the raw materials. The state should pay us for its
failure to honour its commitments. In actual fact, we are fined
for not fulfilling contracts through someone else's fault....
The state as a partner is omnipotent and irresponsible....
But what is to be done with the ``higher-ups''? The West
cherishes its bureaucracy as an extremely valuable social group
of professionals. But in our case managerial work as a
professional process has fused with the authority granted by the
peremptory state. A manager didn't so much manage as order
The market is a universal human value, the market-free
``economy'' is a private bureaucratic value. ``Unpredictable
consequences'' has become one of the arguments for holding back
the market with state plans. But ``inimicalness to the
unexpected and the unplanned destroys the shoots of the future,''
writes the British sociologist and economist Teodor
Shanin....Under perestroika we have come to realize that the
economy must be autonomous....
One newspaper wrote, ``As long as shortages exist, those who
distribute the few goods will always live well.'' As I see it:
``There will always be goods in short supply, as long as those
who distribute them live well.''
Internists to Lose Under RVS
Internists will lose, rather than gain less, under the RBRVS
because the projected 17 to 37% increase is not real. The
Physician Payment Review Commission is taking care of the final
details at the rooms of the AMA CPT Dept. to convert the dreams
of many internists...into the Harvard nightmare, after all the
millions wasted by Dr. Hsaio.
What physicians bill in Detroit for a 10- to 15- minute
office visit (90060), effective January 1, 1992, will have a new
nomenclature that spells 30 minutes face to face,...[converting]
a 33% increase (from $30 to $40), into a decrease [of more than
50%] because physicians will have to devote three times the
current face-to-face time....
Wanda V‚lez-Ruiz, MD, Detroit, MI
AAPS welcomes Drs. Joanne Ceimo of Paradise Valley, AZ;
Stephen F. Coccaro of Albuquerque, NM; Dennis Cooper of
Scottsdale, AZ; Richard E. Dwight of Huron, OH; Jeffrey A. Easley
of Rockford, OH; George England of Muscle Shoals, AL; Laura
Fisher of Providence, UT; Paul B. Jones of Grand Junction, CO;
Larry H. Lee and Thomas P. Lynch of Oak Ridge, TN; Gary L.
Paddack of Ada, OK; Kerry Pulver of Logan, UT; Allison Purtell of
Mission Viejo, CA; and William G. Savage of Oakland, MD. New
student members are Gina Love-Walker of Fairborn, OH, and Austin
Welsh, Jr. of Dayton, OH.
Jan. 26, 1991. Board of Directors meeting, Embassy Suites
Hotel, Atlanta, GA.
Apr. 26, 1991. Medicolegal seminar, cosponsored by St. Louis
Metropolitan Medical Society, St. Louis, MO.
Apr. 27, 1991. Board of Directors meeting, St. Louis, MO.
Oct. 17-19, 1991. Annual meeting, Griffin Gate Marriott,