White House Says that Task Force Lacked Structure,
Therefore Secrecy Permitted
On June 23, 1993, the US Court of Appeals for the District
of Columbia Circuit rendered its opinion in AAPS v.
Clinton, 997 F.2d 898 (D.C. Cir. 1993), remanding to the
District Court the question of whether the Health Care Task
Force's ``Interdepartmental Working Group'' (IWG) and its cluster
groups were subject to the Federal Advisory Committee Act (FACA).
After months of research, AAPS filed a Motion for Summary
In its reply, the White House conceded that 57 of 62
committees of the IWG were not composed wholly of federal
employees, despite Ira Magaziner's prior declaration under oath.
Magaziner filed yet a third declaration.
Nonetheless, the White House asserted that the IWG was
exempt from open-government laws because it was really an
amorphous mass of people who did not advise the President on
anything, despite the expenditure of millions of dollars.
Briefing continues as of this writing and should be
concluded by May 20. Meanwhile, in the wake of AAPS revelations
concerning the role of tax-exempt foundations in drafting health-
care reform plans, the Robert Wood Johnson Foundation has
contracted with NBC for $2.5 million and with MTV for $2.8
million to produce two-hour special programs.
AAPS v. Clinton Generates Legal Progeny:
Barriers to Activist Government
Although the case of AAPS v. Clinton itself is not
yet concluded, its long-term effect on how the government
conducts its business is already being felt. The FACA can be
used as a sword by citizens to challenge every committee or task
force that any Administration creates. The first of what
promises to be an enormous legal progeny clearly illustrates this
In a case strikingly similar to AAPS v. Clinton,
the Northwest Forest Resource Council challenged the Forest
Ecosystem Management Assessment Team (FEMAT) established by
President Clinton as being a federal advisory committee within
the meaning of FACA. FEMAT boasted of over 600 participants,
with multiple ``subteams'' and ``advisory groups.'' (The
Administration was only willing to acknowledge that 37 of them
were ``members.'') The FEMAT's structure and procedures strongly
resembled those of Ira Magaziner's IWG. There were large numbers
of nonfederal personnel on the FEMAT, including faculty members
at Oregon State University, who continued to receive faculty
paychecks while on leave of absence. Participants admittedly
included private contractors paid with federal funds.
Like the President's Task Force on Health Care Reform, FEMAT
refused to open its meetings to the public; made no attempt to
fairly balance its membership; and took no precautions to assure
that its advice was not inappropriately influenced by special
As the Judge pointed out, ``scholars no less than business
people have been known to have personal agendas.'' In fact, the
composition of FEMAT suggested that the vast majority favored the
``ecosystem management'' approach and had no sympathy for the
forest products industry.
US District Judge Thomas P. Jackson, relying on AAPS v.
Clinton, held that FEMAT was a FACA committee and ordered
all of its records open to the public. Jackson rejected every
government argument on the issues presented.
The government did not appeal Judge Jackson's ruling.
In another related case, the Washington Legal Foundation
challenged the secret meetings of the US Sentencing Commission's
Advisory Committee on Environmental Sanctions. Although formed
with the understanding that its meetings would be ``open to the
public,'' meetings were soon closed to the public and the press.
The panel, dominated by anti-business ``environmental'' groups,
government regulators, and law professors, released guidelines
that would require courts to impose excessive fines for minor or
technical environmental infractions. The draft was universally
condemned by the business community and the American Bar
Association for both substance and process. The committee
refused to explain the basis for the proposal or to release the
data and studies used in its secret deliberations.
The US Circuit Court of Appeals ruled that the Commission
was exempt from FACA, making it the only agency aside from the
CIA that is exempt from open-government laws. Nevertheless, the
Court did rule in favor of the plaintiffs on the issue of common
law disclosure of public records. The Sentencing Commission was
required to file an index of all documents in its possession.
Another spin-off of AAPS v. Clinton is the question
of the legality and constitutionality of the NIH grant-making
process. Government funding for scientific research
(increasingly, the only funding available) is under the
control of advisory councils made up of private individuals who
are not accountable to the public. The authority to appoint such
individuals may have been unconstitutionally delegated to
institute directors (Robert Charrow, J NIH Res Dec
The seemingly narrow legal question raised at the outset of
AAPS v. Clinton goes to the heart of the ``public-
private partnership'' that is extending its control over every
aspect of American life, from science and industry to the private
The Incentive Amendment
The following proposed Amendment to the US Constitution was
sent to us by Burchard S. Pruett, MD, of Prescott, AZ:
The members of both houses of Congress shall receive a one
percent increase in annual pay for every one percent they reduce
the National Debt. They shall receive a two percent increase in
annual pay for every one percent they reduce the overall tax
rate. However, the inverse of this rule shall also apply, and
their salaries shall be reduced by the above percentages. During
time of war salaries shall be on hold. There shall also be a cap
of $300,000 per year....
(Dr. Pruett notes that it would become very expensive for
special interests to buy 51 percent of the Congress.)
``In visiting the sick do not presently play the
physician if ye be not knowing therein.'' George
Letters to the Editor
Ripe for Judicial Challenge?
A common strategy of the fourth branch of government (the
bureaucracy) to avoid judicial remedy for its lawlessness is to
use the defense of lack of ``ripeness.''
In the suit brought in New Jersey by Lois Copeland, MD,
et al. (Stewart v. Sullivan), the court refused
to rule on the issue of the right of the Medicare beneficiary to
opt out of Medicare at will, because of lack of ripeness. HHS
has never fined or excluded any physician from Medicare because
of opting out.
Similarly, HHS has never enforced prohibition of a cataract
assistant surgeon (CAS) to collect payment from a Medicare
The Medicare Carrier's Manual states that the physician can
generally receive payment directly for services that Medicare is
not likely to provide. However, under Section 1842(k)(1) of the
Social Security Act physicians are forbidden to bill
patients for assisting at cataract surgery. Laypersons, on the
other hand, are not prohibited from billing, and
assistance at cataract surgery is often performed by trained
It turns logic on its head to mandate nonpayment for a
service if performed by a physician but to allow payment to a
nonphysician for the same service.
Regulations that started with the CAS are putting in
jeopardy all assistant surgeons at all types of surgery. There
is evidence that HHS is moving in that direction. A study to
prove that an assistant surgeon has value is practically
impossible to do, and it would jeopardize the patients in the
Is it time to revisit New York State Ophthalmological
Society v. Bowen, now that the government's exhaustion
defense appears to be overcome? Or would it still fail for lack
Lewis C. Gordonson, MD, Great Neck, NY
Enclosed please find reprints of a personal publication of
mine which was an effort to disseminate information to the public
prior to a visit by Hillary Rodham Clinton to the Sioux Falls
area. I have used information from your material, and I thank
you for it.
Gonzalo M. Sanchez, MD, Sioux Falls, SD
[Dr. Sanchez published a full page, extensively documented
article entitled ``Clinton Health Plan: Wrong Diagnosis, Lethal
Prescription, Parts I and II'' in the Argus Leader as a
paid advertisement. In the article, he states that ``exploiting
the anxieties and fears of some Americans, the Clintons are
attempting to undertake the largest power grab in American
history.'' A copy is available on request.]
The Managers' Grand Plan
Being from Minnesota, I think we understand the true hidden
agenda in these health-delivery maneuvers, and they are exactly
as you describe. The dollars will be controlled by the managers,
and the people writing the regulations and the controls will be
the same people that will gain contracts to monitor these
systems-for example, Interstudy of Minnesota.
As you suggest, the grand plan would be to have physicians
basically as salaried employees working for these managers who
will rake millions out of the health-care system, leaving the
doctors as the focal point for criticism....
What our patients, especially our Medicare patients, want
most of all is the ability to choose their own doctor. This is
the very thing the managed-care people are in business to prevent
because only by separating the patients from their own doctors
and putting them in the hands of a gatekeeper can they truly
ratchet down costs.
Brooks J. Poley, MD, Minneapolis, MN
Does History Repeat Itself?
They were compelled by law to do business with only those
people approved by the government (1). They were forbidden to
produce for themselves (1). Taxation was incurred to repay debts
not benefiting the taxed (2). All legal papers were to go
through government hands (3). Blanket search warrants were
issued to the authorities to search out supposed violators of
these laws (4).
Sounds like something which could only occur in a nation
ruled by a dictator or a tyrant. That's what our colonial
forefathers thought when King George III and the British
Parliament enacted the (1) Navigation Act 1760, (2) Sugar Act
1764, (3) Stamp Act 1764, (4) Writs of Assistance 1761...These
acts made King George unfit to be the ruler of a free
people....Isn't it interesting how similar these injustices are
to the enforcement portion of the much ballyhooed mandatory
universal government health-care proposals?
Gary Mattson, owner
Travelport Truck Stop, Candler, NC
June 18. Board of Directors meeting, Arlington Park Hilton,
Arlington Heights, IL, near Chicago O'Hare Airport.
Oct. 12-15. 51st annual meeting, Atlanta, GA.
Legislative AlertAn Emerging Consensus Bill?
The hottest thing on Capitol Hill is ``consensus.'' With
Clinton supporters unable to sustain an up-or-down vote in
Congressman Pete Stark's Ways and Means Subcommittee, and with
Chairman John Dingell struggling to patch together a coalition of
liberal Democrats and moderates to vote a variant of the Clinton
Plan out of Energy and Commerce, and with Congressman Jim
Cooper's ``managed competition'' bill going nowhere at the speed
of light, it is not surprising that yet another bill is emerging.
The latest plan is the ``Health Reform Consensus Act of
1994'' (H.R. 3955) authored by Congressmen John Rowland (D-GA)
and Mike Bilirakis (R-FL). In the past few weeks it has garnered
over 60 cosponsors in the House. There is as yet no companion
bill in the Senate.
Congressman Rowland looks upon the bill as a ``down pay-
ment'' for reform, making as much possible progress this year
without making disastrous mistakes in policy. Bilirakis, almost
alone among House Republicans, kept insisting that the Medicare
RBRVS should have been tested out before it was implemented
throughout the huge Medicare system. (Of course, it wasn't; the
major medical organizations in Washington lobbied vigorously for
the Medicare fee program without such a demonstration program.)
Bilirakis doesn't want to see Congress make the same mistake
twice, and on a far grander scale.
The vital elements of the new bipartisan bill are as
- Insurance Reform. The bill raises the tax
deductibility of health insurance expenses for the self-employed
from 25 percent to 100 percent and eases the way for the
formation of small employer purchasing groups at the state and
local level. Pre-existing condition restrictions are limited
under all employer-based health insurance plans. Health
insurance cannot be cancelled by a company nor can the renewal of
policy be denied except under certain specified conditions:
nonpayment of premiums, fraud or misrepresentation and
noncompliance with the terms of the contract.
- New ``All-Payer'' Health Care Fraud and Abuse Laws.
The new government program would be funded by federal tax dollars
and would be supplemented by an HHS data collection system.
``Whistleblowers'' would be rewarded. Any violation of the
health care fraud provisions would be prosecuted by the US
Department of Justice, rather than state or local law enforcement
authorities, and would be punishable as a felony, with prison
terms of up to five years.
- Medical Tort Reform. The bill provides for a
mandatory ``alternative dispute resolution'' (ADR) process. No
malpractice case could be brought to court without a
``certificate of merit'' and without proceeding through ADR.
Other provisions include: a limitation on non-economic damages of
$250,000; a limitation on attorney's fees on a progressive scale
(25 percent of the first $100,000 down to 10 percent of any
amount over $500,000); a uniform statute of limitations (not to
exceed 2 years for adults and 8 years for a minors who incur the
injury below the age of six); and the use of practice parameters
for medical procedures as a defense.
The bill also provides for federal claims-submission
requirements (``administrative simplification''); expanded
public health programs; a network of ``community health
centers''; and a new procedure for certifying that mergers or
similar commercial actions comply with antitrust law.
Of course, everybody is for ``antitrust reform'' and against
``fraud and abuse,'' but the real issues are buried in 250 pages
of details. While Members of Congress may say that they agree in
principle, the agreement may quickly break down when it comes to
Some of the effects of this bill would be to expand managed-
care networks; encourage payment on a capitated basis; strengthen
government data collection mechanisms; and increase State
government involvement in local medical facilities through new
Community Health Authorities.
In the Senate, tax caps on the value of employer-provided
health insurance are picking up support, despite the opposition
of organized labor, while employer mandates are losing ground.
Senator Tom Daschle (D-SD), Don Riegle (D-MI), and Harris Wofford
(D-PA) are all pushing vigorously for the employer mandate, and
Senator Mitchell, the Senate Majority Leader, is looking at ways
to make the employer mandate more palatable to the nation's
businessmen. Senator Packwood thinks that the continuing behind-
the-scenes discussions hold promise for some kind of gradual
phase-in of an employer mandate. Don't bet on it.
Anti-mandate sentiment was spurred, once again, by an
econometric analysis of the jobs impact of the Clinton Health
Plan conducted at the request of the National Federation of
Independent Business (NFIB) by the Consad Corporation, a research
firm based in Pittsburgh, Pennsylvania. According to the Consad
Report, the Clinton Plan would result in the loss of 850,000 jobs
during the first years of its enactment; average salary
reductions per worker would be almost $1200; 23 million workers
would see their wages reduced; and most of the job loss would
occur in small businesses with less than 100 employees. To make
an employer mandate work, Congress would have to enact generous
subsidies to small businesses, new expenditures running into tens
of billions annually.
On the topic of employer mandates, the small business lobby
is relentless. If a mandate is bad now, it won't get any better
later on. That's the small business party line, and small
business representatives, unlike doctors, show that they know how
to play hardball on Capitol Hill.
In the House, the emergence of the Rowland-Bilirakis option
underscores the Congressional gridlock. Congressman Richard
Gephardt, the House Majority Leader, wants to move a bill before
the August recess, but concedes that action will probably not
take place until the Fall, just before the Congressional
elections. The process is bogged down in the policy pits of
Congress. The House Ways and Means Committee is sunk in
confusion. Medicare Part C-the huge new government program
created by Congressman Stark of California for covering the
uninsured-is going nowhere. Chairman Rostenkowki's remarks about
the need to do it right-with broad-based taxes if necessary-is
not exactly a vote getter. Recall that President Clinton promised
comprehensive health care reform without ``broad-based'' taxes.
While Rep. Jim Cooper is doing well in raising money from
health insurance companies for his bid for the US Senate seat in
Tennessee (27 percent of his campaign donations come from health
and insurance companies, according to the liberal ``Citizen
Action''), the Cooper-Grandy ``managed competition'' plan itself
is not doing so well. The taxation of benefits and the proposal
to reduce all health care options to managed care, staff-model
HMO's is not politically attractive on anybody else's stump. So
much for ``Clinton Lite.'' In addition, Congressman Jim Slattery
(D-KS) has told Dingell in no uncertain terms that he will not
vote for an employer mandate. Slattery is proposing his own
bill, including ``consensus reforms.'' Unlike the Rowland-
Bilirakis bill, Slattery wants to establish a government-
standardized benefits package, coupled with purchasing
cooperatives on the managed-competition model, with financing
coming from further reductions in Medicaid and Medicare programs.
(Everybody is for cutting Medicare and Medicaid: President
Clinton, Sen. Chafee, Congressman Cooper, and Sen. Nickles of
In the House Education and Labor Committee, Chairman Pat
Williams (D-MT) of the Subcommittee on Labor and Management
Relations is proposing a bill that looks a lot like the Clinton
bill, only bigger. And at the same time, this Committee is a
stronghold of ``single-payer'' sentiment in the House. It could
report out a bill that looks more like a Canadian-style system.
Families USA, a liberal interest group that acts as a wholly
owned subsidiary of the Clinton White House, has issued an April
21st report detailing what most policy analysts already know. The
lack of insurance is tied to job loss or job-related causes.
According to the report, 62 percent of those who lose their
health benefits lose them because of a job loss, or a job change,
or some other reason related to employment.
Curiously, the data beg a simple question. Why not eliminate
tax and insurance rules that tie health insurance exclusively to
Right now, privately insured people are said to pay about 30
percent more than the cost of their treatment to help offset the
cost of the uninsured. Stuart Altman, Chairman of the Prospective
Payment Commission, the federal agency that oversees payments to
hospitals in the Medicare program, sees the problem as systemic,
noting that the rate of uninsurance is going up because employers
continue to drop health insurance for their workers. He sees no
reversal of the current trend. The number of employers providing
insurance fell 2.7 percent from 1988 to 1991, and 1.5 million
were added to the ranks of the uninsured last year. The number
would have been even larger if the Medicaid program were not in
operation. In the next several years, the cost shifting could
Curiously, these data also beg the question: If cost
shifting is the problem now, how will it be solved by even more
cost shifting? Privately insured and self-paying patients are
now charged more to offset losses from the care of
government insured (Medicare and Medicaid) and uninsured
patients. Under ``reform,'' the payers will have to offset still
greater losses from Medicare and Medicaid as these budgets are
cut. In addition, they will have to subsidize the
insurance of those who cannot afford to pay. This is
more costly than subsidizing care directly because insurance adds
both to overhead and to demand. Still worse, most ``reform''
proposals require ``community rating,'' which by definition
shifts costs from high-risk to low-risk individuals.
Also, the 30 percent estimate is not compatible with the
statement that charity care by hospitals totals ``at least $25
billion annually,'' cited in connection with a Feb. 1 address by
Bill Clinton to the American Hospital Association (BNA's
Medicare Report 2/4/94). [0.30 x $800 billion = $240
In the face of the Clinton-Congressional juggernaut on
health care reform, congressional conservatives have been engaged
in their own battles. Senators Peter Domenici (R-NM) and Robert
Bennett (R-UT) asked Grace Marie Arnett, a prominent Washington
health policy specialist, to get the leading Washington think
tanks together to hammer out a common statement of principles
highlighting areas of agreement. After several months of closed-
door meetings and nonstop wrangling over the specifics, scholars
from the American Enterprise Institute, the Cato Institute, and
the Heritage Foundation produced a draft consensus statement.
The key conclusion: If Congress is serious and wants to
reform the ``health care system,'' Congress will have to end the
tax exclusion on employer-based health benefits package and
replace it with tax relief for individuals and families. This
would open up the market, fostering choice, competition,
portability, and personal ownership of private insurance. The
Consensus Group document is being widely circulated all over
Capitol Hill and was recently highlighted in the Wall Street
Journal. Its impact on Capitol Hill remains to be seen.
For a copy of the Consensus Group Memo, write to: Arnett and
Company, Suite 1010, 1133 Connecticut Ave. NW, Washington D.C.
Statistics. The Clinton Plan could require some 400
statistical series, but no baseline data exist for one-quarter of
the policy objectives. Health statistics are intrinsically
complex, ``especially when it becomes a question of generating
numbers that show real causal connections,'' according to a Dun &
Bradstreet study (BNA's Medicare Report 12/31/93).
School-Based Clinics. The Robert Wood Johnson
Foundation awarded $23.2 million to 12 states to develop school-
based ``health'' clinics. However, according to program director
Julia Graham Lear, ``you can't even begin to make a dent without
a serious federal initiative.'' The Clinton Plan calls for
spending $500 million to increase the number of such clinics
(BNA's Health Policy Report 2/7/94).
Medicare HMO Costs. A study by Mathematica Policy
Research showed that Medicare pays 5.7 percent more to provide
care to beneficiaries in HMO settings, as compared with fee-for
service. HMOs attempt to lure Medicare beneficiaries by paying
half their hospital deductible and adding prescription drug
coverage (BNA's Medicare Report 12/31/93).