Dr. Mitrione Moves for New Trial
On July 8, Dr. Robert Mitrione's Motion for a New Trial
Based on Newly Discovered Evidence will be heard in federal
district court in Springfield, IL. Dr. Robert Mitrione and his
wife Marla Devore were convicted of Medicaid fraud (see AAPS
News, Legal Supplement, Jan. 2002).
A memorandum by the Peoria Medical Society in support of the
Motion argues that "the indictment and convictions here fail to
cite violation of any binding federal rule. Accordingly, the
convictions directly contravene the recent Supreme Court teaching
in Christensen v. Harris County, 529 U.S. 576 (2000),
and over 150 decisions that have recently relied on it." As the
Court reiterated in the Ward case, "no one may be
required at peril of life, liberty, or property to speculate as
to the meaning of criminal statutes." Convictions cannot "rely on
testimony by government witnesses about their interpretation of
The Peoria Medical Society also notes that the Exhibit
sprung on defendants near the end of the trial, purporting to
show that defendants had billed for services never rendered in an
incredible 28% of cases, lacked any basis in fact. An independent
auditor, who reviewed the patient files utilizing the audit
procedures described by the government witness in her trial
testimony, found that the government's results were "not
reasonably accurate," having an error rate of more than 50%. The
Exhibit that strongly influenced the jury to convict "contains
mathematical errors in the government's favor and evidences a
lack of due care in its preparation." Moreover, "it is misleading
in the way the chart is constructed." The auditor failed to
conform to the generally accepted auditing standards that require
the preparation and retention of working papers. The government
witness could provide no verifiable evidence for the totals used
in the Exhibit. The Recoupment Spreadsheet that claimed $16,84-
8.79 in overpayments to Dr. Mitrione should be corrected to show
less than $4,400 in overpayments.
AAPS also filed a memorandum in support of the Motion,
arguing that "Defendants' convictions are unprecedented because
they are based on compliance with federal law, rather than
violation of it." Because of the Supremacy Clause,
federal law overrides conflicting state law. Moreover, "it is
axiomatic that a criminal conviction is unjustified if it relies
on a vague, ambiguous, or conflicting legal requirement."
Motions are posted in their entirety at www.aapsonline.
org; click on "prosecutions." AAPS thanks
the American Health Legal Foundation for its support.
Tip of the Month: Sham peer reviews often ruin a good
doctor's reputation. In defense, many doctors have sued for
antitrust, or medical staff bylaws, or due process violations.
But those lawsuits often take years, and are even blocked in
states that require exhaustion of ineffective administrative
remedies first. A better option may be to sue for simple
defamation. Specific damages need not be proven if a false
statement imputes (1) a serious crime to the doctor (such as
violating EMTALA or Medicare laws) or (2) unfitness for a
professional role. Pollard v. Lyon, 91 U.S. 225, 226
New Jersey nurse Susan Malady challenged her 10-year
exclusion from Medicare under HIPAA on the basis that her crime,
to which she had pleaded guilty, preceded the passage of the Act
in 1996. The Administrative Law Judge and an Appeals Panel
affirmed the exclusion because the period of her indictment
extended to September 3, 1996, one week after the passage of
HIPAA. "If even one criminal act occurs after the statute goes
into effect, it will make the exclusion fully applicable"
(Civil Money Penalties Reporter Spring 2002).
"As Sick As It Gets." In his book by this title,
Rudolph Mueller, M.D., member of Physicians for a National Health
Plan, asserts that "it pays not to participate." Apparently, Dr.
Mueller doesn't read the Medicare Bulletin; every year, Medicare
emphasizes that "your Medicare fee schedule amounts are 5% higher
if you participate." Federal law limits the amount that
nonparticipating physicians can balance bill, and in 1994 the New
York State Balance Billing law reduced the permitted amount
billed to 105% of the Medicare-approved fee. Thus, the maximum
that a nonparticipating physician can collect is 99.75% of the
Medicare fee-and the minimum is $0, if the patient pockets the
reimbursement check and refuses to pay.
So who is being driven by the money?
Lawrence R. Huntoon, M.D., Ph.D., Jamestown, NY
BaitNSwitch Lottery. According to a Jan. 15 article in
The Wall Street Journal, six major California insurers
are planning to pay bonuses to doctor groups that earn high marks
on "quality measures" that will probably include compliance with
recommended childhood immunizations and a "patient satisfaction"
score. Michael Rothman, senior program officer at the Robert Wood
Johnson Foundation, stated: "What is exciting about this is that
the plans are lining up signals about performance ... and all
saying they will tie money to it."
It's sort of a medical lottery. Health plans won't pay
adequately to provide these services on an ongoing basis, but if
you give enough service away, you might hit the jackpot. It costs
them almost nothing-compared with actually paying for services
rendered-but gives them great PR.
Capitation means: "We pretend to pay you, and you pretend to
James G. Knight, M.D., San Diego, CA
Why Fight? There's an old Madison Avenue adage: "Nobody
really knows what happens when you advertise. But everybody knows
what happens when you don't." Take out "advertise" and insert
"fight," and you've got it. Fighting for free-market reforms
would allow us to spend less time and treasure fighting each
other and more on the battles that need to be fought for the
benefit of all. For example, most patients use one of the two
heavily subsidized, hideously inefficient systems: government or
employer-provided insurance. Time to open up a variety of other
arrangements, such as tax-exempt medical savings accounts, co-
ops, barter, and cash for service.
Michael Glueck, M.D., Newport Beach, CA
Patience. How in-kind taxpayer-provided comprehensive
medical benefits for 1.5 million dual-eligible military/Medicare
beneficiaries (TriCare) was achieved is a useful lesson: 25 years
of grassroots, unrelenting, same-message efforts made by hundreds
of thousands of retirees and military associations.
Stephen Barchet, M.D., Issaquah, WA
History Repeats Itself. A Canadian physician told me
that Medicare's treatment of U.S. doctors is similar to "how it
started" in Canada. First, the patients are given an
"entitlement" expectation. Then their government eliminated
unassigned claims, and then promised to pay the "copay." Doctors
were happy to sign on. Then payment denials unexpectedly
increased, and after two or three years, decreases in payment got
worse and worse.
Linda W. Wilson, M.D., Culver City, CA
Foreign "Trade." Under Tony Blair, the British
government is importing foreign doctors and nurses, and exporting
patients, as more than a million people remain on hospital
Anthony P. Maresca, M.D., Brookfield, WI
Recent History. After World War II, medical care
consumed 4.6% of the GDP. Individuals purchased their own
insurance with after-tax dollars and paid 100% of their own
medical bills. For insurance benefits, there were tables of
allowances that did not dictate fees but provided a defined
benefit for each service. The cost of these plans was reasonable,
and people could choose their own doctor without economic
penalty. Since the government got involved, the cost of care has
increased at four times the inflation rate, with no appreciable
improvement in access to care by the poor.
Roger Beauchamp, D.D.S., Escanaba, MI
Fixed Overhead. As unconstitutional regulations grow
daily in the U.S., 27,000,000 federal employees are now supported
by only three times that many in the private sector!
Frank Rogers, M.D., Pinedale, CA
Getting the Right Answer. The headline "Majority of
Employers Surveyed Support Universal Health Care; Blame HMOs,
Insurance Companies for Problems in Current System" came about by
asking (I'm paraphrasing): Do you support universal health
insurance, OR do you think everything is just fine the way it is?
And on the list of possible culprits, the surveyers plum' forgot
to include the government.
Greg Scandlen, Alexandria, VA
The Harkin Proposal. In 1988, Senator Harkin (D-IA)
proposed that neither House or Senate pass legislation that would
increase the number of uninsured. Great idea.
Ernest J. White, Alexandria, VA
Legislative AlertHealth Policy at Mid-Stream
As summer approaches, Congress is wrestling with a variety
of hot-button issues, including Medicare reform, Medicare
prescription drugs, Medicare payments to doctors and other
"providers," the uninsured, and the "Patients' Bill of Rights."
Issue: Medicare Reform. The future Medicare system
should be based on personal freedom and a genuine diversity of
options. In such a system, persons who had a good experience with
a private plan in their working life should be able to carry it
with them into retirement and use their Medicare benefit to help
offset its costs.
Medical professionals, facilities, and insurers should not
have to wrestle with literally tens of thousands of pages of
incomprehensible rules, regulations, guidelines, and related
paperwork governing virtually every aspect of their operations.
They should also be paid on the basis of real market conditions-
demand and supply-rather than on the current system of
administrative pricing, which often bears little or no
relationship to real conditions.
The Outlook: Expect some action this summer on
Medicare reform. The House will take the initiative. If it passes
something that looks very much like the original Breaux Thomas
proposal, creating a new Medicare program modeled on the Federal
Employees Health Benefits Program (FEHBP), rest assured that it
will be blocked in the Senate, which, with the exception of the
tax cut and the education bill, has become a veritable graveyard
for Bush Administration proposals. Congressional Republicans are
likely to go for a more modest bill, strengthening the
Medicare+Choice program and adding a prescription drug program
targeted to low-income persons at a cost of $350 billion over ten
years. The Democrats will offer a more costly prescription drug
expansion. Already, Democratic Senators Zell Miller of Georgia
and Bob Graham of Florida have proposed a $425 billion drug
program over ten years.
Issue: Medicare Payments to Doctors and Other
"Providers." As Len Nichols, a top health policy analyst with
the Center for Studying Health System Change (HSC), once
remarked, the Medicare bureaucracy is charged with setting
10,000 prices in 3,000 counties throughout the United States-
an impossible task. Costs are shifted, rather than controlled;
volume expands or supply contracts; and the markets are routinely
Congress and the Administration should abolish the entire
system of administrative pricing for physicians' services,
hospital services, medical devices, and HMO payments. This is a
system of price controls, which have the same effect as they have
always had over the last 4,000 years: "providers" are paid too
much, or too little, or too slowly, and without adequate analysis
of the conditions that would otherwise obtain.
The best option is to abolish this entire complicated
apparatus and adopt a premium-support system for the new Medicare
program, based on a government contribution set by a formula just
like the FEHBP-in other words, to enact comprehensive reform that
would eliminate central planning and price regulation.
The Outlook: Congress will do no such thing.
At least, the Senate will not go along with the House or the Bush
Administration, if either has the fortitude to press the issue (a
big if). So, the result will be a series of piecemeal adjustments
to "provider" reimbursements. The ugly politics of sharply
different special interests-all having a life-and-death stake in
getting their slice of the Budget pie in that awful and confusing
annual budget reconciliation process-will triumph again.
There will be temporary good news for doctors, who will see
a reversal of the 5.4% Medicare payment cut. Congress will
probably change or eliminate the physicians' payment formula,
which calls for a 17% reduction in physicians' fees over the next
three years, because of the dire warnings of the Medicare Payment
Advisory Commission and others about the threat to patient care.
If the Medicare physician payment update formula is eliminated,
as suggested by the Advisory Commission, the Congressional Budget
Office (CBO) projects an overall increase in Medicare spending by
$126 billion over the next 10 years.
That's why the Bush administration will seek to offset the
"give backs" to physicians with cuts to other "providers." Rest
assured these "offsets" will be bitterly resisted by the what
Washington wonks call the "stakeholders"-hospitals, nursing
homes, HMOs, and others. The Administration will probably lose.
So, we will see a general increase in Medicare spending, further
aggravating financial condition of the program.
Also look for an increase in Medicare HMO payments. The Bush
team wants to increase payments to plans in Medicare +Choice,
despite their flaws. CBO projects that enrollment in such plans
will continue to decline, going from 15% to 8% of seniors by
2012. Some think that a failure of Medicare+Choice undermines the
case for the reliance upon private sector plans that is at the
heart of the Bush team's vision of Medicare reform for the next
generation of Medicare patients.
Issue: Medicare prescription drugs. This issue is
heating up. The CBO estimates that Medicare beneficiaries make up
about 15% of the population, but their consumption of
prescription drugs amounts to roughly 40% of the $100 billion
spent on outpatient prescription drugs. Like the rest of the
American population, Medicare patients paid about 40% of their
prescription drug bills out of pocket.
Also according to the CBO, 75% of Medicare patients had
coverage for prescription drugs for at least part of the year. In
1999, roughly 30% of Medicare patients got their coverage through
former employers; about 16%, through Medicaid programs; and 11%,
through Medi-gap plans. If Medicare covered all prescription drug
spending for seniors not covered under current law, between 2002
and 2011-the year the Baby Boomers start to retire-CBO
projects an additional $1.6 trillion spent on Medicare
The right answer: No prescription drug benefit outside
comprehensive reform (see AAPS News, May 2002).
The issue is a paradox of public policy. The integration of
prescription drug coverage into a competing system of private
plans is relatively simple. It is administratively easier both in
the structure of the benefit and the structure of the payment
system. The payments, co-payments, deductibles, and premiums are
all balanced within a common framework of benefits. The FEHBP is
proof of this. Prescription drug coverage and its administration
are routine-neither difficult nor controversial.
If Congress does not add prescription drugs within a common
framework of overall Medicare reform, Congress could at least
structure a limited drug benefit in accordance with a market-
based proposal for reform. To do this, Congress could target the
25% of the senior population that needs coverage, and avoid
displacing the existing private market for drugs. Perhaps the
best proposal to do that is offered by the Galen Institute: a
smart card for prescription drugs, tied to a prescription drug
account, which low-income seniors could draw upon with a debit
The Outlook: House Republicans, as
noted, will probably refrain from enacting a comprehensive
Medicare reform proposal with a prescription drug coverage. If
they do enact one, they will probably fail to overcome Senate
opposition. They will then propose a limited prescription drug
benefit, worth about $350 billion over ten years, and try to
secure its delivery through private insurance; companies will be
asked to set premiums just for a drug benefit. This will include
a subsidy system for low-income persons, plus a catastrophic
feature, which will probably force taxpayers shoulder
catastrophic risk over some specified amount because insurance
companies will not want to do so. This proposal will probably be
supported by the pharmaceutical industry but will run into
practical objections, both from insurance industry and left-wing
Some senior Democrats in the Senate will argue that $300
billion or $350 billion over ten years is not a serious effort,
thus repudiating everything they said about a $300-billion-plus
package being an appropriate amount last year. Congressional
Democrats will probably resurface a Medicare prescription drug
package resembling the old Clinton plan, and will simply add a
prescription drug benefit to the old Medicare program, with a new
drug premium, held artificially low, and a set of coinsurance or
co-payments requirements ranging from none to low. The benefit
will be delivered through prescription benefit managers (PBMs)
under the standard Medicare contracting rules, with heavy
regulation of price and delivery.
For political reasons, it would be impossible to deliver
drugs through the old Medicare program without price controls.
And since 40% of all drug sales are to the elderly, this would
vastly expand price regulation over the nation's most productive
industry. The end result? Some sort of face-saving end-of-session
compromise, targeting subsidies to low-income persons only.
Issue: The uninsured. The debate on covering the
uninsured is really a debate on national health insurance in
miniature. If one doesn't understand this, one doesn't really
don't understand the true nature of the debate.
On the one side are prominent members of Congress and policy
analysts from major foundations and universities, who firmly
believe that private health insurance is an anachronism; that the
provision of medical care should be a public utility; that the
government should determine the price and availability of medical
benefits and services. Knowing that a head-on proposal to create
a "single-payer" system in one fell swoop is politically
unpalatable, the major policy option of this group is the
expansion of Medicaid up the income scale, or Medicare down the
age scale. This is to be done in incremental steps toward the
goal of total government control over the financing and delivery
of medical. Meanwhile, private employment-based arrangements,
such as COBRA coverage, are to be preserved to facilitate the
application of greater federal regulation of private insurance,
thus easing the transition to a single payer system.
On the other side are the President and his allies. In his
April 30th speech in San Jose, California, President Bush
repeated his call for reform based on private insurance and
personal choice: "Our health care policies must help low income
Americans to buy health insurance they choose, they own and
control." The chief policy option of this group is to broaden
access to private health insurance through tax credits or premium
subsidies to the uninsured.
These positions are fundamentally irreconcilable.
The Outlook: The ideological hostility to tax
relief or subsidies for private insurance is intense among
Congressional leftists. Senate Majority Leader Daschle has twice
blocked consideration of a House-passed relief package for the
uninsured. The same pattern is now developing on Trade
legislation, which has a medical insurance component for
Issue: Patients' Bill of Rights. The President has
reaffirmed his support for enactment of PBOR. The Senate has
acted. The House has acted. But the House-Senate conference seems
permanently stalled. There are at least three reasons for this.
First, the differences between the House and Senate,
particularly on the scope of litigation, are too wide to be
bridged by compromise. A key difference is that the Senate bill
would apply the terms and conditions of the PBOR to Medicare and
Medicaid, as well as the FEHBP. The federal employees unions,
fearing the cost and the disruption, oppose the application of
legislation for everybody else to their own medical insurance.
That's an old refrain.
Second, more members of Congress are recognizing that the
PBOR is a vehicle for a vast expansion of federal regulation, and
they are having second thoughts on its likely impact on the
ability of employers and insurers to cope with it. A prominent
Washington attorney, William Schiffbauer, concludes that it
would impose more than 700 "legal requirements" on medical
Third, the public has genuinely lost interest in the issue.
Organized medicine may still be in favor of the legislation; so,
too are left-wing lobbies. It is simply no longer hot button
issue. In a January 2002 national survey by Ayres and Associates,
34% of the respondents stated that holding down the cost of
medical care was the most important issue, followed by 20% who
identified covering the uninsured as the most important issue.
Reforming HMOs came in third at 15%.
Robert Moffit is a prominent Washington health policy
analyst and Director of Domestic Policy at the Heritage