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Association of American Physicians and Surgeons, Inc.
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Volume 50, No. 7 July 1994


Many health-care reform proposals now before the Congress- including the Rowland-Bilirakis ``consensus bill''- would extend broad federal authority to prosecute ``fraud and abuse'' into the private sector. All physicians thus need to examine their practices carefully even if they never accept funds from the Medicare or Medicaid program. Those who do take federal money may need to investigate the ``voluntary compliance program'' for ``health care companies'' under development by the Departments of Justice and of HHS.

This program would enable companies that discover a fraud and abuse problem to ``come in and disclose it and get that concern resolved'' stated D. McCarty Thornton, associate general counsel to the Department of HHS Office of the Inspector General. However, it would not be an amnesty program in which ``if you 'fess up, all is forgiven, and you go scot-free'' (BNA's Health Care Policy Report 4/25/94).

Fraud and abuse includes routine waiver of deductibles and copayments, upcoding, and unbundling of charges.

At an April 14 speech at a conference sponsored by the Healthcare Financial Management Association, Mr. Thornton outlined some fraud-and-abuse provisions of Clinton's Health Security Act, which were included in the reform bill passed by the House Ways and Means Subcommittee on Health. Offenders convicted under the Act would be unable to bill any payer during a mandatory period of exclusion.

``It would put the provider out of business for a while,'' Thornton stated.

A program attendee raised the question of possible ``witch hunts'' because enforcement would be funded from criminal fines, penalties, and forfeitures. Thornton said that ``it would be foolhardy for any agency to bring trumped up cases'' because of the checks and balances in the criminal justice system. In his experience, ``there is no record of any significant misconduct by law enforcement agencies'' in the fight against health-care fraud, and it would be irrational to expect it (BNA's Medicare Report 4/22/94).

As an example of how the enforcement program might work, physicians should consider the case of Edgardo Perez-DeLeon, former office manager for his wife's internal medicine practice, now prisoner #59320 in the Ingham County Jail. Mr. Perez was convicted on about 13 felony counts of Medicaid False Claims and Health Care False Claims Offenses. He had coded some services that did not involve a physical examination as an ``office visit'' of varying levels (e.g. 90060).

In November, 1993, Mr. Perez wrote a letter to Mr. James Groen, Medical Services Administration; Dr. S. Adelson, Blue Cross Blue Shield of Michigan; and Mr. Patrice Helwig, Medicare Policy Dept of BCBS of Michigan. The letter gives a number of specific clinical examples and asks these administrators to write down the code they felt was appropriate. It also states: ``Please indicate whether or not an office visit can be billed without one of the three Evaluation and Management components of history, physical examination, and decision-making and if these components can be disregarded when time consideration goes as the only component into services related to counseling or coordination of care. Please indicate if your guidelines for E&M coding are consistent with CPT/HCPC guidelines and the RBRVS....''

This unanswered letter figured importantly in the Judge's decision to sentence Mr. Perez to one year in jail. While his attorney argued that the letters showed Mr. Perez was trying to conform his conduct to the law, the prosecution asserted that the letters were an attempt to ``more or less cover himself for what he intends to continue to do in the future. In that respect, I think that this shows little potential for reformation. [He was] aware...that there is a hot line number that you call. That's the way if you have real legitimate questions.''

Because of the ``mind set of Mr. Perez,'' who ``still wants to argue some of these same issues that were decided by a jury,'' the prosecutor said, ``I still don't think he has yet gotten the message.'' Additionally, the prosecutor argued that reading about Mr. Perez's jail sentence would be a ``deterrent'' to other ``providers.''

Mr. Perez risked an additional four years in jail by dictating a deterrent letter over the telephone from jail. This letter was typed on a piece of his wife's stationery and addressed to Dr. Jane Orient, Executive Director of AAPS. It was a warning to all physicians, entitled ``CPT AND HCPCS CODES ARE NOT ALIKE.''

``Our concern is [that]...not being aware of differences that you should have known, regardless of your intent, might land you in jail.... While the Medicare program has HCFA's HCPCS codes, all members of the BCBSM National Association late in 1991 adhered to the AMA's copyrighted CPT codes....The HCPCS codes and the CPT codes, although they are numerically and narratively described alike, are not alike with regard to payment requirement....''

Mr. Perez's attorney, in a letter that also threatens to foreclose on property that Mr. Perez has not yet been able to sell to pay his legal fees, writes as follows: ``It is hard to fathom what possessed you to write a letter to Dr. Orient on [your wife's] stationery....The letter itself makes reference to `our' concern. Clearly, your making reference to the word `our' would indicate to any reader that the letter was not just written in your behalf but on behalf of [your wife's] office. This is clearly in violation of your probation.''

According to Robert J. Madden, PhD, MD, an attorney who reviewed this case, it is a ``sad illustration of what happens when a physician practices medicine by the numbers-as all physicians do now in the USA.''

The Doctor as Law-Enforcement Target

The Health Police are already here. Are they visiting your office, looking for health-care fraud and abuse?

If so, they have probably read a few tips in a US Justice Department manual for investigators. They will have been advised to observe the names of support personnel for later investigations or charges and the location of files for later search warrants or subpoenas. Quite possibly, they will not be wearing a uniform:

``One tape-recorded, undercover visit can make an entire case....Closely supervise each undercover visit...to maximize inculpatory conversations...You want to prove a pattern so that you can use RICO forfeiture to financially dismantle the fraud'' (Medicare Compliance Alert, 3/28/94).

Physicians and medical facilities need to protect themselves before they become aware of an investigation. A compliance plan can lessen fines by up to 95 percent. (In the absence of a plan, fines can reach more than $70 million.) According to Federal Sentencing Guidelines, a minimum of seven elements are required. These include: (1) standards and procedures for employees that are capable of reducing the likelihood of wrongdoing; (2) assignment of oversight responsibility to a specific high-level individual; (3) provisions for employee training; (4) a program to monitor and audit employees; (5) a plan for enforcement and discipline; and (6) guidelines for response and prevention.

Not having a plan subjects a hospital, group practice, or clinic directors to a possible shareholder audit. Plans are tax- deductible; criminal fines are not (Medicare Compliance Alert 4/11/94).

Note that federal investigators are not the only threat. Private citizens, including employees, can bring a qui tam action for civil enforcement of the False Claims Act. Every employee is thus a potential Inspector General. In 1991, an average of 10 such cases were brought every month. The potential financial reward is up to 25 percent of what the organization is required to pay the government; one whistle- blowing employee was awarded $16.5 million (ibid.)

Physicians must be very careful of the company they keep. If they hold a position in an enterprise engaged in illegal activities (the clinic involved in U.S. v Sims-Robertson was swapping drugs for blood donations), they are presumed to have agreed to promote the activities, and circumstantial evidence is sufficient to convict them of a RICO offense (Medicare Compliance Alert 2/28/94).

Physicians who discover they are under investigation are advised to fight aggressively before indictment. Once indictments come down, somebody is going to be convicted of something, according to attorney Tom Baker of Atlanta's Kilpatrick and Cody (ibid.)

Physicians are advised not to settle with just one agency but to be sure that everybody is at the table at the same time- the IG's representative, the assistant US attorney, the region HHS representative, the Department of Justice, and the defense team (ibid.)

Note that a ``no contest'' plea is the equivalent of a conviction within the meaning of mandatory exclusion provisions of Medicare and Medicaid, and that the law does not distinguish between misdemeanors and felonies, according to an administrative ruling in the Matter of Patricia McClendon (Docket No. C-93-038, Decision No. CR-264, 5/21/93). The Administrative Law Judge in that case also held that the exclusion law's failure to define what constitutes a crime or misdemeanor does not deprive the accused of due process (Civil Money Penalties Reporter 4/94).


``D'' Is For Drowsing Near Dragons

Proposed new criminal laws, among many other terrifying elements of the Clinton Plan, are explained for the layman in a richly illustrated essay by Madeleine Pelner Cosman, PhD, a law professor who spoke about the Crime of Referral at recent AAPS meetings. ``The ABCs of the Clinton Medical World: an Alliterative Alphabet of Admirable Animals'' was published in the Cardozo Omnibus Journal, April 1994, eliciting cries of dismay from Senate Majority Leader George Mitchell (D-ME).

In a letter to the Dean of the Benjamin N. Cardozo School of Law, Dr. Cosman states:

``I only learned by having met Law Forum editor Mark Treitel in the elevator that there was a complaint to Cardozo for having published [my article] and some meeting with Professor Farrell and others to discuss `errors'....

``If Senator Mitchell or anyone else finds errors, I would greatly appreciate immediate information and specific reference to them. If I have made an error, gladly will I correct it....In fact, I will gladly make a gift of the short version of the Health Security Act as published by Times Books to any lawyer, law student, or Cardozo professor in return for the invaluable consideration of his or her promise to read it.''

A copy of this elegant article-which has a predator on every page-is available from AAPS for a self-addressed 9 x 12 envelope with $0.54 postage.


Do You Owe Them $486,000?

A patient complained to Medicare that she had been billed for a ``prosthesis,'' although she had no artificial limbs or even a dental plate. There was no wrongdoing because in Medicare terminology, a ``prosthesis'' is a sterile surgical tray. However, Medicare audited 60 of the physicians' charts and determined that she had ``unnecessarily'' treated conditions such as psoriasis and acute vesicular tinea pedis. Extrapolating back to the first day she had seen a Medicare patient, they calculated that the doctor owed Medicare $486,000.

The physician who testified on her behalf is now being audited himself (The Schoch Letter, 1/94).


Waiving Your Freedom of Speech

In a letter to Senator Daniel Patrick Moynihan, Lawrence R. Huntoon, MD, of Jamestown, NY, writes:

I am enclosing a response that I just received from Upstate Medicare regarding a ``take it or leave it'' contract the government wants to force me to sign (Electronic Data Interchange or EDI agreement-see p. 4)....They tell me how sorry they are that the agreement is so unreasonable toward physicians and how sorry they are that the agreement would infringe on my First Amendment rights, and how this really ``wasn't their intent''....[They state that] ``this agreement has been imple- mented as directed by the HCFA and verbiage cannot be changed by our office.'' Interpretation: ``we are just a bunch of little Nazis following orders.''

One of the effects of the EDI contract is that I will be forbidden to complain about botched Medicare claims to medical societies and congressmen...

Clinton Case Poised for a Decision

AAPS filed its final memorandum in the case against the Clinton Task Force on Health Care Reform on June 3, 1994. Oral argument will likely be scheduled in mid or late June.

The AAPS Motion for Summary Judgment asks the Court to declare that the Interdepartmental Working Group and its 15 Cluster Groups, 43 Working Groups, and four Subgroups were all advisory committees for purposes of the Federal Advisory Committee Act and the Government in the Sunshine Act. AAPS contends that the records turned over to counsel as a result of a November, 1993, court order show that Working Groups were not composed wholly of full-time officers or employees of the federal government, contradicting sworn testimony by Ira Magaziner in March, 1993.

AAPS moved the Court to enter a rule for contempt against Ira Magaziner. In addition, AAPS has requested reimbursement for all attorneys' fees because AAPS has had to prosecute the action to prove what Mr. Magaziner knew to be the truth 15 months ago but withheld from AAPS and the Court. Further, AAPS is seeking the maximum level of penalties, and the striking of all evidence introduced by the White House, because the third affidavit of Ira Magaziner reveals records and documents that AAPS had requested, but that the White House never ``identified''-much less turned over to counsel-in spite of the November court order.

The White House has responded-almost shamelessly-that Ira Magaziner should not be held in contempt because he did not violate any court order. They seem to believe that he needs a court order to tell the truth! Of course, false swearing has always been deemed an obstruction of justice and a matter handled by the contempt powers of the court. The White House now tries to assert that AAPS sought only to have records ``identified,'' not ``produced.''

Mr. Magaziner has never attempted to introduce any testimony explaining or refuting his false statements of March, 1993. In effect, the White House has conceded the most critical issue-the make-up of the Working groups, which included hundreds of individuals from private special interests, all of which stand in position to gain financially from the Clinton Health Care Reform Plan.


The Role of Private Foundations

Among the private interests heavily represented on the task force were tax-exempt foundations. For further evidence of ``the growing activism of private foundations in promoting reform through grants''-for example the $100 million over the past five years spent by the Robert Wood Johnson Foundation to ``help states plan, develop, and implement health care reform'', see N Engl J Med 330:75-79, 1994.


Is the False Claims Act Constitutional?

In 1991, a Michigan dentist was convicted of three felony counts of violating the Michigan Health Care False Claims Act, which became effective in March, 1985. He had billed Blue Cross/Blue Shield for a total of $176 for amalgams, when in fact the service provided was the application of sealants to the teeth of children (a noncovered service at that time).

The actual coding was done by a dental assistant, who testified that the codes were ``confusing.'' The dentist had signed the claims forms hurriedly, along with a large stack of other claims.

Charles H. Noble of Flat Rock, MI, the dentist's attorney, filed a Brief on Appeal, arguing that the False Claims Act is unconstitutional on grounds that it is impermissibly vague and creates a presumption of guilt.

The brief states that under the Act's broad definitions of the terms ``deceptive,'' ``false,'' and ``knowing,'' a person can be charged with a felony carrying a four-year prison term for a staff member's simple mistake, without any proof of intent whatsoever, MCL 752.1002 (b)(c); MSA 28.547 (102)(b)(c). The Michigan Act creates a rebuttable presumption that a person ``knowingly'' made a claim even if his signature is stamped or typewritten.

Noble cites People v. Howell [396 Mich 16,20 (1976)]:

``a statute may be challenged for vagueness on three grounds: (1) It does not provide fair notice of the conduct proscribed. (2) It confers on the trier of fact unstructured and unlimited discretion to determine whether an offense has been committed. (3) Its coverage is overbroad and impinges on First Amendment freedoms.''

During the trial, the prosecution offered no testimony to show that the defendant knew that the billing was anything other than a mistake. Neither witness ever told him that sealants were being billed as amalgams, nor did they testify that they thought, in 1989, that there was anything wrong with the billing procedure. The witness for Blue Cross and the People acknowledged that there had never been a notice in the monthly bulletin advising dentists that sealants were not covered; in fact, she herself bills Blue Cross for sealants.

If the prosecution no longer bears the burden of proof beyond a reasonable doubt, ``this truly is a new dimension to criminal responsibility,'' concludes Mr. Noble.

``It is very tragic, but I am unaware of any organized effort by any medical or dental association to challenge this law,'' he stated.

Edgardo Perez-DeLeon (see p. 1) also raised the issue of unconstitutional vagueness. Previous litigation has established that ``no one may be required, at the peril of life, liberty, or property, to speculate as to the meaning of penal statutes.'' Mr. Perez stated that the common-sense notion of guilty knowledge was overturned by the False Claims Act. There is no definition of what triggers a duty to know, such as notice in the provider manual. In fact, the absence of a code may impose a presumption that a provider ``should have known'' that a service was not billable, by ``negative implication,'' according to a witness representing Blue Cross.

According to Mr. Perez's attorney as quoted in the Judgments of Sentence, the government's position as reflected in the instructions to the jury was that the prosecution did not have to prove that the defendant intentionally and knowingly obtained money that he was not entitled to. Rather, he was convicted only of the ``general intent'' to submit claims for reimbursement and to obtain the money that was actually paid.

Judge Peter D. Houk denied Mr. Perez's motion to hold the False Claims Act unconstitutional.

Electronic Data Interchange Agreement

Date of memo to provider: March 17, 1994

Effective date: February 25, 1994

Each new electronic biller must sign the agreement before submitting the first claim; existing EMC billers must sign it within two years of the effective date.

``The provider agrees:

1. That it shall be liable for any and all breaches of this agreement that may be committed by any partner, director, officer, employee, servant, agent, or subcontractor of the provider...including billing or data transmission services....

2. Not to disclose any information concerning a Medicare patient to any other person or organization, except HCFA and/or its contractor, without the express written consent of the Medicare patient...

12. That the Medicare-assigned provider number constitutes the provider's legal signature and constitutes assurance by the provider that services were performed as billed....

15. To acknowledge...that anyone who misrepresents or falsifies...any record or other information relating to that claim

...may, upon conviction, be subject to a fine and/or imprison- ment under applicable Federal law....

18. To research and correct any and all claim discrepancies and to hold the contractor and HCFA harmless from any claims, cost or damages incurred as a result of such discrepancies [even if they are the carriers' fault].''

For its part, HCFA agrees to six items, which include keeping the provider informed of rules and transmitting an acknowledgment of claims receipt. No penalties are prescribed.

[Contract sent to Dr. Huntoon (see p. 2) by Upstate Medicare Division-emphasis and bracketed comments added.]


Managed Care Also Manages Speech

The agreement between Healthmark Health Plan and the Primary Care Physician requires the ``voluntary'' renunciation of freedom of speech: ``Physician agrees not to disparage Plan or its processes, programs or policies to any persons, including Members or other Participating Providers. Disparagement of Plan will be treated as an administrative compliance failure.''


Letters to the Editor

The current politically correct assumption that we can cure the expensive ills of our medical system by fostering more generalists and fewer specialists is the medical manpower equivalent of the economic argument that our nation can be made more competitive by decreasing the skill level of the workforce. If we denigrate our schools to the point where graduates are only semi-literate (which may actually be occurring), they will be able to work only in low-paying assembly-line jobs. We will thus be able to provide the world with a large force of cheap unskilled labor....

The very politicians, consultants, and geniuses who tell us that it is important to upgrade the skill level of our workforce in order to compete economically in the future are telling us that the problems of our medical system can be solved in precisely the opposite way.
D. Randall Wolfe, MD, Corvallis, OR


If the Medical Society of the State of New York has indeed become a proactive arm of New York's medical practitioners,...I will consider rejoining. To date we have seen little but appeasement and reconciliation....

We are not merely ``providers'' and we do not simply do procedures (CPT codes)....We must marshall our forces and strengths in order to prevent further infringements on our freedom and our ability to earn a living...The days of fearing that not dotting the ``i's'' or crossing the ``t's'' would result (at best) in nonpayment or (at worst) criminal prosecution should be ended.
Richard W. Most, MD, Lake Success, NY


In spite of multiple stumbling blocks placed by the Clinical Laboratory Destruction Act, I now have at least verbal permission from CLIA-OSHA to continue looking through the microscope at stool specimens for pus cells, as I have been doing for 22 years. This is probably going to be allowed as a ``physician performed microscopy'' so that my minimal lab does not have to be a ``moderate complexity'' lab like Roche and Merrell, Dow, Corning. It has taken roughly 1 years, many letters, and much stress and tribulation to hopefully convince them that this is a ``labile'' substance that cannot be wrapped in a bullet-proof package then a water-proof atomic bomb-proof container and transferred by armored car to the lab, where they charge 3 to 5 times as much as I do and delay results for seven days until they are unusable in treating the patient being seen for colitis or bacterial diarrhea.
Frank F. Martin, MD, Charleston, SC


AAPS Calendar

Aug. 27-28. 12th annual meeting of Doctors for Disaster

Preparedness, Tucson, AZ. AAPS members Howard Maccabee, PhD, MD, and Joseph Scherzer, MD, will speak. For information, call (602)325-2680.

Oct. 12-15. 51st annual meeting, Atlanta, GA.

Legislative Alert


Senator Diane Feinstein (D-CA) has quietly removed herself from sponsorship of the Clinton Plan, causing a bit of a stir on Capitol Hill. Publicly, the California Senator, an ardent liberal, is stating that she stands with the President on the need to reform the health care system, but there are other ways to do it, etc. Hillary, we are sure, will understand.


Dan Rostenkowski's indictment on 17 counts of fraud and corruption ends his Chairmanship of the House Ways and Means Committee, the central forum in the House of Representatives for health-care reform. While the White House is saying publicly that Rostenkowski's fall is not all that significant and that the cause of health care reform is bigger than one man, veteran Capitol Hill insiders know better. In truth, all men are not equal. Rostenkowski, like him or not, is a giant among men and had powers of persuasion among House Democrats that can only be described as awesome.

The new boss of the Committee, Sam Gibbons of Florida, while a Southern Democrat, is hardly a conservative. Gibbons is a ``single payer'' (government monopsony) advocate. At least in the short term, he favors expansion of Medicare to cover the uninsured, and he has already committed to use the Stark bill as the ``Chairman's mark,'' the draft bill for work in the full Ways and Means Committee mark-up.

This is a clear change of signals. Rostenkowski, seeing the Stark Bill pass by a vote of 6 to 5 out of the Ways and Means Subcommittee, recognized that it was going nowhere and promised the business community that they would get a ``more conservative bill.'' Now, Gibbons is saying, ``Forget it.''

The tough item in the Stark bill is not simply the Medicare changes, but the financing. It proposes to fund part of the health-care reform package by eliminating the indexation of federal income tax rates. The result: millions of middle class Americans would be faced with yet another tax increase. And it would be a big one.

Indexing was one of the key tax reforms successfully initiated by the Reagan Administration. It meant that the levels of a family's taxable income at which higher tax rates would take effect are adjusted annually to keep pace with inflation. Since 1985, indexing has saved taxpayers over $100 billion dollars. According to a study conducted by the Congressional Budget Office (CBO), the abolition of indexation would raise $132.2 billion in extra taxes over the next five years. This is based on the assumption that the rate of inflation would average about 3 percent. Most experts do not expect the inflation rate to hover at such low levels for five years.

A study of the financing of the Stark bill produced by economist Daniel Mitchell of the Heritage Foundation estimated that the tax increase on a single, middle income taxpayer would be nearly $3,132 rather than $2,214 calculated by using the CBO inflation estimate.

If the Stark bill does become the central vehicle for health care reform, most observers on Capitol Hill expect it to go down to a crushing defeat on the House floor. Labor is warning Congress that changes in the tax code mean Armageddon.

The Changing Legislative Landscape

Rosty's personal problems are yet the latest in a series of headaches for the White House, not the least of which is the steady flow of bad news from back home. Once again, the more folks hear of the details of the Clinton Plan, the less they like it. This is frustrating to Members of Congress most strongly committed to the White House Plan, prompting Senator Jay Rockefeller (D-WV) to make the bold statement to the effect that popular opinion should be subordinated to Congressional determination to pass sweeping reform.

The key players on Capitol Hill are trying desperately to salvage bits and pieces of the Clinton Plan, repackaging them as ``compromise'' legislation, with neon signs proclaiming that this latest version of health care reform is not the infamous Clinton Plan; it is something else. However, this is one issue on which the details drive the politics and not the politics the details. It is the components of the Clinton Plan, not just its general impression, that are causing Members of Congress the political trouble. For example:

1. Mandates on Employers. The political attractiveness of the mandate on employers is that it continues to perpetuate the illusion among ordinary working Americans that the employer- somebody else-is really paying for their health insurance. This is economic nonsense. The major revelation of the current debate is that households, not employers, really pay for 100 percent (not 20 percent) of their employer-provided health insurance benefits package. Health benefits, like wages, are compensation. Every dollar increase in health benefits amounts to a dollar decrease in wages. Besides the loss of 850,000 to 1.3 million jobs (according to a CONSAD study), 23 million workers would see their wages drop by about $1,200 (see Legislative Alert, June 1994).

Of course, if small businesses receive no federal subsidies, the unemployment rates and wage reductions would be far worse. (And according to the CONSAD study, the hardest hit firms would be those employing fewer than 100 workers.) But subsidies are, under any scenario, likely to mean broad-based taxes, precisely what Clinton ruled out. (Broad-based taxes are precisely what the departing Rosty said would be necessary to finance a comprehensive reform.)

2. Individual Mandates. While the decline of an employer mandate has given new impetus to the individual mandate, Members of the House and Senate, including those who had previously supported an individual mandate to combat the ``free- loader problem,'' are back-pedaling. Senator Don Nickles (R-OK), the author of the leading Republican alternative to the Clinton Plan, scrapped a requirement for individuals to buy even a catastrophic package as a component of a consumer choice reform package (S. 1743), and Senator Robert Dole of Kansas has signalled a growing lack of support among his Senate colleagues for an individual mandate.

3. Alliances. In the Clinton Plan, the major legal requirement is that everybody in America would have to buy their health insurance from the regional alliance, a large government- sponsored ``cooperative'' (collective). It would be illegal for Americans to buy insurance outside of these regional alliances. While advocates of the Clinton Plan and proponents of ``managed competition'' have attempted to portray the alliances as user friendly, the public is not buying it. In the minds of increasingly nervous Members of Congress, the regional alliances are slowly transforming themselves into the equivalent of the Department of Motor Vehicles.

4. The Standardized Benefits Package. If the federal government can set forth what Americans will or will not have in terms of treatments, procedures, and benefits, then the government will in effect ``control the whole thing''-the ambition expressed by Bill Clinton during the campaign.

The problem is that when the promised Cadillac in every driveway is priced out, the price is invariably too high. Moreover, independent economists have universally found double- digit mistakes in the Administration's price estimates.

Members of Congress are also coming to realize that once they set forth a standardized comprehensive benefits package, everybody will try to be in it, setting off a costly feeding frenzy in the subcommittees and full committees. It's already happening. In the House Subcommittee on Labor and Management Relations, a panel of the House Education and labor Committee, Congressman George Miller (D-CA) added big expansions to both the mental health and the dental benefit packages. When pressed on the problems of cost, Miller told his colleagues that cost was a problem that they should worry about it sometime in the future- the kind of response that one expects from an irresponsible teenager with a credit card. The Committee approved the big benefit expansions by voice vote.

Another Congressional trick in dealing with high-priced benefits is to vote for them, and then transfer to an unelected government commission (say the National Health Board) the tough decisions to raise future prices or cut benefits or medical services. This is the also the prescription offered by the ``managed competition'' school and embodied in Clinton Lite, the plan offered by Congressman Jim Cooper of Tennessee. Recently, the Senate Labor and Human Resources Committee passed an amendment offered by Senator Jeff Bingaman (D-NM), which would give the National Health Board the authority to raise out-of- pocket costs for consumers or to cut services to meet cost- containment objectives. The Republicans on the Committee, surprisingly, did not say a word. Under this arrangement, the Board would make the tough choices and they would go into effect automatically if Congress didn't do anything to stop them within 45 days. In other words, all Congress has to do under the Bingaman amendment is nothing. Congress, of course, is very good at doing nothing.

The lure of a standardized benefits plan is hard to break. It is a central feature of the Chafee Plan and is even a component of the Rowland-Bilirakis ``incremental reform'' approach, packed with heavy insurance regulation, which has oddly attracted the support of several conservatives. In a draft circulating among senior Senate Republicans, allegedly crafted by Sheila Burke, Senator Robert Dole's chief health policy advisor, there is also a standardized benefits package requirement, with a qualifier that the health plan must have an actuarial value of at at least 75 percent of the value of the standard plan in the popular Federal Employees Health Benefits Program (FEHBP). There's just one catch: In the FEHBP, there is no standardized benefits requirement at all.

Disguises and Triggers

While the Clinton Plan is proclaimed to be ``Dead on Arrival,'' Capitol Hill observers expect that liberals in Congress will attempt to take its vital parts and rearrange them in such a way as to make the Plan itself somehow more appealing. In the rush of legislative deliberations, amidst the confusion of details, with deadlines pressing and an election around the corner, this is not an unreasonable scenario.

Look for two possible strategies from the Clinton Admini- stration's allies on Capitol Hill. The first is to draft a ``lean'' version of the Clinton Plan and get the basic federal regulatory infrastructure in place. All that would be necessary is to make sure that the regulatory regime is broad enough and encompassing enough to allow the ``lean'' version of the Clinton Plan to grow over time. This could take years, or be only a matter of months. Special interests, of course, like the regulatory approach, familiar as they are with the senior Congressional staff and the health care bureaucracy in HCFA and elsewhere who will actually make the future policy. This is especially attractive to liberals in Congress because they do not have to actually do anything but set the regulatory clock in motion, and the bureaucracy will take care of the rest. If there is a glitch, or if some regulatory provision should prove unpopular, then there is the political opportunity to hold highly publicized congressional hearings, lambaste the career bureaucrats for doing things wrong (they don't care, of course, as they are not going to get fired; it's all part of the game), and enact some ``fix'' to make things right again.

The second way is to enact a ``trigger mechanism.'' Under this approach, the stripped-down version of the Clinton Plan or the ``compromise'' plan would contain no politically offensive elements, such as price controls or global budgets or employer mandates. Instead, the bill would contain a provision that would spell out a condition or set of conditions, under a goal or timetable, that would automatically make the offensive or politically troublesome provisions become law. If, for example, by a certain date, the level of uninsured people is not what the drafters of the bill say it should be, regardless of any other conditions that may obtain in the private market at the time, an employer mandate would go into effect. Or if, by a certain date, the level of health care spending in the economy is not what the drafters of the bill think it should be, once again regardless of the conditions of the market, then global budgets, price caps, premiums caps or fee schedules on doctors and hospitals would automatically be activated.

Once the elements of the Clinton infrastructure are in place, all Congressional staff have to do is to make sure that the legislative language is written in such a way as to guarantee a trigger: a hopeless goal or timetable will do just fine.

``Triggers'' are the in thing right now, but the legislative situation is both fluid and confused. The big interest groups are making new noises. The AMA has changed its position yet again, and now supports employer mandates for all firms except those with fewer than 100 employees. Editors of JAMA rank the Stark bill, with its regulatory apparatus and new middle-class tax increases, as the best all-round alternative. No surprise. Just another chapter in the voluminous record of professional self-destruction.

While Dole scribbles and Moynihan ponders, the Clintons' allies are getting desperate. Precious time is slipping away. The deed must be done this year. Members of the House and Senate, getting the clear and unmistakable message of the special elections and the persistent unpopularity of the President in the hinterlands, smell defeat in 1994 elections. With defeat goes a working liberal majority in Congress to pass big-time reform. They've got to move. It's showtime!