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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

Volume 47, No. 6 June 1991

FREE CHOICE, EQUAL TAXATION

West Virginia patients and physicians have joined together to challenge the State government in the Circuit Court of Kanawha County, WV, over the Omnibus Health Care Cost Containment Act.

In an argument heard in April, plaintiffs contended that the ban on balance billing and other provisions of the Act (see AAPS News, Dec 1990) interfere with free choice of physician. The Act caused a ``drastic change in the physician- patient relationship in West Virginia-a change which runs the gamut from merely `chilling' that relationship to terminating it entirely.'' Patients complained that they were no longer able to see their previous physician and were forced to accept care of inferior quality.

The concept of liberty protected by the State Constitution embraces more than the mere freedom from physical restraint, argued Mark Henry Holzer, Counsel for the plaintiffs. It includes the right to make fundamental choices concerning livelihood, residence, friendships, and the like.

In its reply, the State conceded that ``the relationship between a patient and a physician is special and unique.'' However, it argued that the relationship between a physician's fee and a third-party payor is not a special relationship. It denied that the ban on balance billing restricted liberty:

[That prohibition] does not preclude the beneficiary from voluntarily paying any additional fees that the beneficiary feels the physician is entitled to.

In effect, the State is contending that the constitutionality of the Act is saved because the patient is not barred from tipping his doctor. As Professor Holzer noted in his reply to the reply:

Quite apart from the conceded fact that the Act prohibits balance billing, thus preventing the physi- cian from sending a bill or, presumably, even telling the patient that a further sum is due, common sense compels the recognition that it would never occur to a patient to tip his doctor, that a patient would never do so, and that if one did, the physician would be out of his mind to accept a tip in the light of the serious penalties attached to violation of the balance billing prohibition [a fine of from $1,000 to $25,000]. The ``it-was-only-a-tip'' defense would not go far.

The Act further interfered with liberty by requiring a physician who accepted even one state beneficiary to accept every other state beneficiary who requested service, or to devote at least 15% of his practice to Medicaid patients. Objections to this ``take-one-take-all'' provision were rendered moot because the State legislature repealed it. (Any connection between the repeal and the lawsuit was said to be purely coincidental.)

The legislative history of the Act shows that its raison d'etre was to shift part of the burden of the State's health care costs to somebody else. There were two candidates: taxpayers generally, or physicians. It being politically unfeasible to raise taxes again, physicians were chosen. A report issued by the State noted that public employees and other beneficiaries-and the taxpayers of West Virginia-``saved'' nearly $15 million over 15 months as a result of the ban on balance billing. (And physicians were forced to contribute $15 million worth of services.)

Plaintiffs argue that labor is the purest form of property. The worth of any form of property, under West Virginia law, is its market value. Forcing someone to accept less than the fair market value for his labor constitutes a tax on his property.

The ``Equal and Uniform Taxation'' provision of the West Virginia constitution ``guarantees that `insular minorities' like business taxpayers . . . will not be taxed at a high rate because of limited political influence while those with political clout pay little.'' Since the Omnibus Health Care Cost Containment Act is imposed only on ``participating'' providers-exempting the labor of nonparticipants and all other citizens-it violates the constitution, plaintiffs contend.

Other constitutional arguments are: (1) the Act illegally delegates the power to tax and (2) the means do not serve the stated purpose of the legislation. (Health care costs have in- creased, not decreased, as a consequence of the Act.)

The State of West Virginia did not make a serious attempt to confront the constitutional issues, but argued against a motion for summary judgment on the basis of a need for extensive discovery and a factual hearing. The strategy, according to Professor Holzer, appears to be to mire the case in a swamp of discovery from which it may never emerge.

The West Virginia case offers important insight into the nature of the threat of ``license servitude'' now faced by American physicians, according to a forthcoming article by Professor Holzer (``The Physician's License: an Achilles Heel?'' J Legal Med 11:201-220 [reprints available from AAPS for $2.00]). Originally intended to assure fitness to practice medicine, medical licensure is increasingly being used as a means to force physicians to serve state-dictated goals: cost containment today, who-knows-what tomorrow.

Litigation in the West Virginia case is being supported by L.I.F.E. for West Virginians, PO Box 1667, Elkins, WV 26241.


A Way Out?

...The law does not provide a way for a provider to volun- tarily disassociate himself completely from the Medicare program. As long as a provider furnishes services to a Medicare patient, he is required to abide by all the rules, regulations, and restrictions applicable to those services.

The law cannot be avoided by having the patient sign a disclaimer to the effect that he/she has no right to bill Medi- care for the provider's services. He can avoid them only by refusing provide services to Medicare patients. Only those providers who have been found guilty of fraud and/or abuse to the Medicare/Medicaid programs and who are excluded from these programs are exempt from all of the rules....

Darlene R. Taylor, Claim Representative, Aetna

Dear Miss Taylor,

In your letter of April 16, you advise me that the only way a physician can ... disassociate from Medicare is to be found guilty of ``fraud or abuse'' to the Medicare system.

And in a letter of the same date from Mary Widener in your office it is demanded that I refund a patient $15 for a urinalysis I did and for which the patient paid me.

I hereby refuse to pay the refund, and for this ``abuse'' I respectfully request and demand that I be excluded from Medicare by my own volition.

I note that in West Virginia a physician has been deprived of his license to practice medicine because he was disciplined by the PRO for that state. I fear that other states will also adopt this as a policy. It may even be mandated by new federal law.

Thus, it is too risky to have anything to do with Medicare as any physician's license to practice medicine is or may soon be at risk....I recognize that it may cost me $2000...to effect the exclusion but this is the price for freedom I may have to pay.

John H. DeTar, MD, Reno, NV

 

A Way Out of CLIA?

It is possible that there is no way out of CLIA. All physicians may be defined as laboratories. On the other hand, if all physicians are laboratories, why would anyone have to ask?

A Maryland physician's office was called by a state employee to ask whether laboratory work was done there.

``This is a physician's office, not a laboratory.''

``Do you do urine dipsticks?''

``Sometimes we do.''

``Then you're a laboratory.''

Many states are implementing their own regulations, in imitation of CLIA. And the federal government may have to rely on state agencies in order to find all the labs. Thus, if you cannot afford to pay the registration fees, or if you may not have the resources to comply with the as-yet-unspecified regulations, or if you do not wish to take the risk of having to prove to an inspector that you don't do a test that requires an on-site pathologist, the time to decide to stop doing all lab tests is before you are listed as a laboratory.

If someone calls to ask whether your office does lab work, it might be a person selling equipment. Or it might be a state or federal enforcer. Regardless of what question a person asks your receptionist, it is always a good idea to determine the caller's name, address, telephone number, and position, as well

as the purpose of the call.

Additional CLIA regulations concerning intermediate sanctions have been published in the Federal Register of April 2, 1991. Under the Administrative Procedure Act, federal agencies are obligated to consider all public comments before finalizing the regulations. The need to respond to the 60,000 comments already submitted has delayed implementation of the act for more than two years, to the consternation of Rep. John Dingell (D-MI), one of CLIA's authors.

Conceivably, CLIA might face another hurdle: a 1981 executive order (EO 12291) that requires agencies to submit regulations to the Office of Management and Budget for a determination that benefits outweigh the costs. President Bush has expressed his support for the order, and Vice President Quayle recently issued a memorandum that expands its scope.

In lauding Quayle's memorandum, Robert Coakley, executive director of the Business Council on the Reduction of Paperwork stated: ``You are seeing ... new and innovative ways that agencies ... are ignoring their responsibilities under the ... Administrative Procedure Act'' (BNA's Medicare Report 5/3/91).

One federal agency's view of CLIA's cost:benefit ratio is on the record: Veterans Administration Medical Chief James Holsinger, MD, has requested an exemption for the VA. He states that compliance with the inspection and staffing standards would cost $82 million the first year and $75 million per year thereafter. Dr. Holsinger favors a bill that would give him exclusive authority to set standards for VA labs. He told Sen. Barbara Mikulski (D-MD), one of the bill's authors, that the VA doesn't perform very many Pap smears. ``Don't get cute with me,'' she said (Health Legislation 4/24/91).

To have your comments considered, they must be received by 5 p.m., June 3, 1991 at the Health Care Financing Administra- tion, Dept. of Health and Human Services, Attn: HSQ-179-PPO Box 26676, Baltimore, MD 21207. Be sure to refer to file code HSQ- 179-P. (FAX copies are not accepted.)

To obtain a copy of the regulations, you may place a credit- card order at 202-783-3238. The cost is $1.50. Specify that they were published in 56 FR 13430, April 2, 1991, pp. 1137-1152. The order desk operator can also tell you the location of the nearest Government Depository Library that receives the Federal Register.

A summary of the regulations will be sent to AAPS members under separate cover.

 

Update on AAPS v. Bowen

From a March 5, 1991, memorandum by Eileen T. Boyd, Assistant Inspector General, to regional IGs:

There are questions as to whether the OIG can successfully sustain sanctions against physicians who violated, before Nov. 5, 1990, the mandatory assignment requirement for lab tests....

Almost immediately after the statute was amended, the same plaintiffs filed a new complaint challenging Congress's constitutional authority to make the statute retroactive. Because of the legislative fix, the Solicitor General declined to ask the Supreme Court to overturn the Sixth Circuit decision.

....[Even if the decision were overturned], our ability to meet the ... standard of proof ... would have been compromised by the fact that it was issued. How could I have knowingly violated a statute that three judges didn't think ``necessarily'' applied to me?


AAPS to File Amicus Brief in Support of Dr. Carlen

In an age of increasing bureaucratic interference with the practice of medicine, the case of Robert Carlen, MD, v. David Harris raises the critical ethical question: Is the doctor's first obligation to his patient, or to a political authority or other third party?

Dr. Carlen is an internist who was employed by the Suffolk County Health Dept. to care for inmates at the correctional facility at Yaphank, NY. During the course of his treatment of inmates, disputes arose between Dr. Carlen and two physicians who were his administrative supervisors. The Commissioner of the Health Dept. attempted to direct Dr. Carlen's treatment decisions. For example, Dr. Carlen was prohibited from distributing information about AIDS to the inmates or from informing an inmate of his diagnosis of AIDS before he was released from the jail.

In response to this interference with his medical judgment, Dr. Carlen brought suit seeking to enjoin the Health Dept. from interfering with his treatment. The New York trial court dismissed the suit on the ground that Dr. Carlen had not exhausted administrative remedies. Dr. Carlen appealed to the Appellate Division of the Supreme Court, which affirmed the trial court's decision. The New York Court of Appeals, that state's highest court, declined to review the case.

Almost immediately after the first case was concluded, David Harris, Commissioner of the Suffolk County Health Dept., charged Dr. Carlen with 46 counts of insubordination and incompetence, including failure to observe ``standard'' charting technique (the Weed problem-oriented medical record), disobedience to directives to ``participate in the team approach,'' deviation from ``accepted medical practice,'' refusal to accept ``medical supervision,'' and refusal to provide care. Dr. Carlen denied all of these allegations. Harris then appointed a hearing officer pursuant to the New York Civil Service Law. On January 23, 1990, the hearing officer found Dr. Carlen guilty of all the charges, and Dr. Carlen was discharged from his position. Dr. Carlen is in the process of appealing the hearing officer's decision.

In a brief amicus curiae in support of Dr. Carlen, AAPS maintains that the case is essentially one involving retaliation against a physician for adhering to high ethical standards of medical practice:

[T]his case raises legal, ethical, and moral issues which lie at the core of the future of health care in the United States....The traditional patient- centered model of health care is under increasing attack from the forces of bureaucratic medicine. This trend threatens to transform the professional from a person who uses advanced knowledge and skilled individual judgment to solve human problems into a person who, like a mechanic, must perform acts in a ministerial fashion, always ``by the book,'' without regard to the needs of the individual patient. AAPS believes that when a physician is punished for resisting official pressures which directly clash with his or her professional judgment, the courts must intervene to ensure that the long-established public policies embodied in medical codes of ethics are protected and furthered.

AAPS argues that the overarching principle of medical beneficence mandates that a physician do all that he can for the benefit of the individual patient without assuming responsibility for the equitable disbursement of society's health resources. As bioethicist Hans Jonas states:

[T]he physician is bound not to let any other interest interfere with that of the patient in being cured. But manifestly more sublime norms than contractual ones are involved. We may speak of a sacred trust; strictly by its terms, the doctor is, as it were, alone with his patient and God.

AAPS maintains that Dr. Carlen saw his ethical duty and carried it out by actively resisting bureaucratic pressures that compromised patient care and by actively seeking to change such policies through lawful means.

Further, AAPS believes that physicians and administrators can and do retaliate against their fellow physicians through the use of ``peer review'' and discharge proceedings, attempting to shroud the true motivations of their actions by accusing the subject physician of malpractice or unprofessional behavior. AAPS contends that there is a clear trend in the law to protect employees, professional or otherwise, from such retaliation. The courts' failure to provide such protection signals to physicians that professional ethical standards will not be given effect in concrete situations.

[For further details, see AAPS News Jan. 1988 and March, 1989.]

 

Patient Freedom of Choice Fund Established

The American Health Legal Foundation has designated a special fund for financing a legal challenge to Medicare's assertion that Medicare-eligible patients may not contract with a physician outside the Medicare system.

Patients who value the option of consulting a personal physician might wish to make a small contribution. Checks should be written to ``Freedom of Choice Fund/AHLF.''

 

Massachusetts Physicians Win Procedural Victory

Early in April, the Massachusetts Supreme Judicial Court unanimously handed Liability Investigation Fund Effort, Inc. (LIFE) an important procedural victory. LIFE challenged the State-created Joint Underwriting Association's power to retroactively assess medical liability insurance premiums back as far as 1975. The decision overturned a lower court's determination that the challenge belonged in an administrative proceeding, not in court, because it concerned only the setting of medical liability insurance rates. It affirmed LIFE's contention that constitutionality is at issue.

At stake are retroactive premiums amounting to half a billion dollars. Interestingly, the litigation is being conducted solely by the LIFE organization. The Massachusetts Medical Society is remaining on the sidelines.

According to Professor Mark Henry Holzer of Brooklyn Law School, Counsel for the plaintiffs, the decision shows that physicians acting together can force the courts to rule on constitutional issues.


New Members

AAPS welcomes Thomas Ahlborn of Ridgewood, NJ; Ibad Ansari of Leitchfield, KY; Mathis Becker of Plantation, FL; Thomas P. Berg of Canton, OH; Robert Birns of Englewood, NJ; Churchill L. Blakey of Wenonah, NJ; Dexter W. Blome of Los Angeles, CA; James Boehner of Aiken, SC; Jonah Botknecht of Hallandale, FL; Stan Broome of New York, NY; J.C. Burns of West Columbia, TX; Alan Chastanet of East Andover, ME; Paula L. Coleman of Majopac, NY; R. Evan Crandall of Chesterfield, MO; Larimore Cummins of Santa Cruz, CA; Steven H. Dennis of Henderson, NC; James L. Fletcher, Jr. of Augusta, GA; Walter H. Judd of Mitchellville, MD; Constan- tine A. Kotsanis of Grapevine, TX; Allan Lazar of Teaneck, NJ; David A. Libert of Maitland, FL; Gregory Magee of Englewood, NJ; Gerald H. Mandell of Detroit, MI; Ralph Mills of Johnson City, TN; George A. Murr, III of Coatesville, PA; Henry Nachamie of Brooklyn, NY; Robert E. Nichols of Crossville, TN; Richard Payne of Brockton, MA; Samuel William Polen of Florence, SC; A.G. Portfolio, Jr. of Paramus, NJ; Avtar K. Razdan of Bourbonnais, IL; Roger G. Rosenstein of Paramus, NJ; Robert Jay Rowen of Anchorage, AK; Christopher S. Ryckman of Lancaster, OH; Robert A. Schultz of Fair Lawn, NJ; Sam Suttle of Louisville, MS; and Robert T. Williams of Sanford, FL.

AAPS is especially pleased to welcome the following new student members: Suzanne D. Clark, Rafael F. Cruz, Timothy Joseph Donovan, Michelle A. Douglass, Thomas W. Englehart, Aaron L. Gunn, Peter Kanistros, Daniel A. Keenan, Jr., Danielle Raber, Brenton D. Warren, and Sanjay Yathiraj, all from Ohio.

 

Welcome, NAPS!

The National Alliance of Physicians and Surgeons has decided to join forces with AAPS in the battle for private medicine.

Under the leadership of President Richard Neubauer, MD, of Florida and Executive Director Robert Moffit, PhD, of Maryland, NAPS has taken a principled stand against the concept of the relative value scale.

``The RVS is truly a revolutionary change in medicine,'' Dr. Moffit said. ``In essence, it is a rerun of the [Marxist] labor theory of value.''

Despite the profound implications of the RVS, Dr. Moffit was the only person to present formal testimony against it to Congress. ``Congress enacted this legislation without serious debate,'' he said.

 

Curtis Caine, Jr., RIP

We are saddened to announce that long-time AAPS member Curtis Caine, Jr., MD, the eldest son of one of our Past Presidents, was called to be with his Savior and Lord on April 16, 1991. He is survived by his father, Curtis Caine, Sr., MD, and mother, Lynn Caine.

 

Students Are the Future

If you don't tell the next generation about freedom, who will? The enclosed pamphlet by Richard Villareal, President of the Student Section of the Ohio State Medical Association House of Delegates, may help you. Make as many copies as you like. If you live near a medical school, ask whether you may distribute a copy to each medical student, preferably with a cover letter by you, possibly with an invitation to an informal get-together to discuss private medicine. Call 1-800-635-1196 if you'd like additional membership recruitment material.

 

Letter to the Editor

AAPS rightly points out the heavy cost of government interference in the practice of medicine. But physicians are not the only targets for oppressive regulation. All productive sectors of the economy are under attack.

There is always a pretext. CLIA was the result of horror stories about a few inaccurate Pap smears.

The pretext for adding as much as a trillion dollars to the costs of American industry is global warming, ozone holes, nuclear waste, acid rain, and other environmental alarms. Because economic well-being is highly correlated with health, physicians need to assess the potential side effects of well- intentioned, draconian environmentalist measures. Should we rush to cut off the patient's leg because it might harbor a cancer? Or should we establish the diagnosis first?

Dixy Lee Ray and other noted scientists will lead a discussion of these public health issues at the annual meeting of Doctors for Disaster Preparedness in Las Vegas, Sept. 21-22. I'd like to invite our members to attend.

Howard Maccabee, MD, PhD
Radiation Oncology Center, 115 La Casa Via
Walnut Creek, CA 94598

 

AAPS Calendar

Oct. 17-19, 1991. Annual meeting, Lexington, KY, Griffin Gate Marriott.