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

Volume 46, No. 5 May 1990


As Medicare regulations are tightened, physician dissatis- faction grows. But the level of anger vented in the physicians' lounge is actually of small concern. The important question is the availability of patient care.

Some prospective patients are beginning to worry. The American Association of Retired Persons (AARP) supports mandatory assignment and bans on balance billing-``if careful analysis indicates that access to care would not be reduced.''

A few vocal physicians have stated publicly that ``I no longer can tolerate the limits imposed by the Medicare bureaucracy on clinical practice, patient care, and accounts receivable. Therefore, I have stopped accepting Medicare patients in my office practice'' (Edward R. Sodaro, MD, Private Practice, Nov 1989).

To investigate how many physicians have taken or contemplate similar action, AAPS recently sent surveys to 3,265 physicians in active practice of adult patient-care specialties. All such physicians in Pima County (AZ), Hamilton and Lucas Counties (OH), Jefferson County (KY), and DeKalb County (GA), were contacted by mail. Questionnaires were returned by 438 physicians (13.4%). In addition, all physicians receiving AAPS News were surveyed. Responses from the latter were analyzed separately (see p. 4) and not included in the tallies given below.

The survey covered general attitudes toward Medicare, opinions about proposed changes in the health care system, present willingness to treat Medicare patients, the possible effect of regulatory changes, and the impact of PRO activities.

Medicare patients in some areas may already be having difficulty finding a doctor. New Medicare patients are accepted only under special circumstances by 17% of primary care physicians and 12% of surgeons. About 4% of primary care physicians and 2% of surgeons accept no new Medicare patients at all.

The majority of physicians say they plan to restrict their Medicare practices as a result of proposed or newly enacted regulations. About 48% of primary care physicians and 42% of surgeons say they would restrict appointments if balance billing is banned; 27% and 64% (respectively) would do so if reimburse- ment is cut; 44% and 25% plan to cut back because of the requirement that physicians submit all claims after September 1, 1990; 64% and 48% say they'll do so if mandatory assignment is enacted; and 64% and 56% if practice guidelines are accepted as the standard of care.

Respondents' attitudes may have been affected by com- munications from PROs. (It is possible that recipients of demands and threats from their PRO were more likely to return the questionnaire.) The majority (53%) of the primary care physicians have received notices of ``unnecessary'' services (compared with 15% of surgeons). Notices of ``substandard care'' were reported by 12% of primary care physicians and 4% of surgeons. Sanctions threats were received by about 22% in both groups.

Overall, 70% of physicians said they contemplated retirement from active patient care at a younger age than they would have thought possible five years ago. The percentage was lower (57%) for physicians who had been in practice for five or fewer years, but the difference was not significant.

Some physicians commented that they had quit practicing or had reduced services to Medicare patients because they were unable to earn enough to cover overhead. Others say that they would like to retire or restrict their practices but could not afford to do so. Overall, physicians reported that receipts from treating Medicare patients averaged 60% of their normal fee.

``If I only saw Medicare patients, I would do better financially as a garbage tipper,'' commented one orthopedic surgeon.

``I'm trapped by my specialty,'' said a pulmonologist.

``Eye surgeons are totally at Medicare's mercy,'' stated an ophthalmologist. However, he noted that ``if the excimer laser is accepted to eliminate glasses, many eye surgeons might eliminate Medicare patients.''

The overall evaluation of the Medicare program was strongly negative, with rare exceptions. Only 20% agreed with the oft- repeated statement that Medicare has been a ``boon to the elderly.'' Of the 85 physicians giving an open-ended brief description of Medicare, two had a strongly positive comment; eight a lukewarm endorsement (e.g. ``better than nothing''); and the remainder an unequivocally negative statement (most commonly emphasizing ``inefficiency'' and outright ``fraud'').

Of the proposed alternatives, 18% of respondents favored national health insurance for all age groups; 3% were for mandatory participation; 29% for outlawing assignment; 67% for allowing patients to opt out and buy private insurance; and 13% for abolishing Medicare (3% by enacting NHI). Of the group favoring NHI, 20% were psychiatrists (vs. 8% of the sample), while primary care was significantly underrepresented.

Few physicians (4%) felt that the government's attempts to ``assure quality'' and contain costs rewarded excellence and efficiency. Instead, 63% said that the regulations rewarded doctors for manipulating the system to maximize profit, and 82% said that the regulations tended to prevent patient care.

Politicians seem to believe that physicians, for all their grumbling, are like the socially responsible horse in Animal Farm. Will physicians prove them wrong?

Are You in Compliance?

Insurance forms sent from our offices are legal documents, whether or not we have personally signed them. By submitting the forms, we certify that we are in legal compliance with all the requirements for assigning the correct CPT-4 codes. Yet many of us have willingly allowed ourselves to be deceived into following a system in which fraud is pervasive.

Most insurance companies have agreed with CPT-4 standards set by Blue Cross/Blue Shield, including the time requirements. According to an official circular distributed by BC/BS in May, 1989, a 90060 (``intermediate'') visit is defined as 25 to 30 minutes of personal contact time with the physician. A 90050 (``limited'') visit requires 15 to 20 minutes.

Enterprising doctors have found many ways to manipulate this system, with the excuse that the insurance companies are defrauding us. Seminars throughout the country teach these methods. For example, Medicare allows doctors to charge for a 90017 (``extended'') service once for each new diagnosis in each patient's lifetime. A 90060 visit is allowed twice each six months for the same diagnosis. To avoid automatic downcoding for a greater number of such visits, seminars teach physicians to assign different diagnoses.

Insurers intend to hold doctors to the literal requirements. In August, 1989, Arizona Health Plan stated that they soon plan to ``bust'' large numbers of doctors for fraudulent coding. (They have sent their investigators to the coding seminars.) Within a few years, insurance companies will be able to share computer data and discover how many patients a physician saw on a given day. Doctors who bill for 30 to 40 ``intermediate'' visits in a single day will have to face charges. The physician, not the office manager or the seminar instructor, is culpable for practicing insurance fraud.

It is essential for physicians to read the description of the levels of effort required for the various primary visits (90000-90080). I'm not going to say I agree with the requirements. However, as persons of integrity, we should realize that our signature on a contract, licensure agreement, or hospital privilege agreement requires us to keep our commitment. ``He that swears to his own hurt and changes not...'' (Ps. 15:4).
Paul Glanville, MD
Excerpted with permission
from J Biblical Ethics in Medicine, Winter, 1990


From Capitol Hill

GAO Says Forced Assignment Doesn't Hinder Access. A study carried out by the General Accounting Office in Rhode Island, Connecticut, Vermont, and Massachusetts, concluded that bans on balance billing of poor patients or mandatory assignment for all Medicare patients did not hinder access to care or cause boosts in volume or intensity of service. The GAO cautioned against extrapolating this experience to the nation as a whole.

Penalties for Inadvertent Balance Billing of Low-Income Patients. Since April 1, physicians have been required to take assignment on all Medicaid-eligible patients. If a physician suspects that a patient's income may be at or below federal poverty limits, he is advised to ask the patient for a Medicaid card or call the state's Medicaid hotline. Even if patients are reluctant to admit to their low income, physicians who bill them erroneously could be subject to sanctions or fines.

Pepper Commission Reports. The goal of the US Bipartisan Commission on Comprehensive Health Care is universal coverage. ``At full implementation, all Americans will be required to have health insurance through their employer or the public plan.'' A few key recommendations: (1) Requiring employers to provide a specified minimum benefit package to workers and nonworking dependents, or to ``contribute'' a percentage of payroll into a public plan; (2) extending tax credits or subsidies to small employers for 40% of the cost of health insurance; (3) insurance market reform to prevent employment-based programs from excluding pre-existing conditions or denying coverage to any individual or group; (4) extending managed care to to small employers; (5) extending Medicare payment rules to the public program, which will serve as a model for private insurance.

The Commission also calls for the development of national practice guidelines and standards of care, already begun by the newly created Agency for Health Care Policy and Research, and the implementation of a uniform data system to cover all health care encounters, regardless of payment source or setting.

The Commission stated it was ``committed to raising whatever additional revenues are necessary,'' without committing itself to any specific type of tax. Whatever the tax, it should be progressive, cross-generational, and inflation proof.

The high cost-estimated to be $23.5 billion for the insurance program and $42.8 billion for long-term care-and inattention to financing details may jeopardize enactment.

Mark Your Calendar. April 1: Unassigned claims that fail to include ICD-9 codes will be referred to the Inspector General for possible sanctions. May 1: Assigned claims that fail to include Medicare carrier identification numbers of the performing physician will be denied. July 1. If ICD-9 codes are incomplete or inaccurate, assigned claims will be denied and unassigned claims referred to the IG for possible sanctions. September 1. Physicians must submit all Medicare claims to carriers, whether assigned or not, without charging the patient for this service. Medicare carriers will implement a Congressional mandate to profile individual physicians and refer those who deviate from the norm for reeducation. October 1. The physicians data bank is supposed to be in operation, under $15.9 million contract to UNISYS.

Laboratory Regulations. Sen. Barbara Mikulski (D-MD) complains that cancer is going undetected and patients are receiving erroneous laboratory reports with tragic results, all because HCFA's enforcement of the Clinical Laboratory Improvement Amendments of 1988 proceeds at a ``glacial'' pace. One problem is that the number of labs is perhaps six times larger than the original estimate of 100,000. A HCFA official noted that the single most difficult task will be to find the labs. HCFA will depend partly on labs identifying themselves to the government, as by writing to ask a question. ``If you ever ask, you're regulated,'' the official said.

Physicians doing a small volume of tests may wonder why they will have to pay as much as referral labs (up to $3000). ``There has to be some kind of assurance of income for this program,'' said Tony Elias of HCFA.

AAPS Member Sues Medicare over 1990 Fee Screens

On Monday, April 9, 1990, AAPS Director Sidney R. Steinberg, MD, a general and vascular surgeon in Shelbyville, KY, filed suit in the US District Court for the Eastern District of Kentucky against Louis W. Sullivan, MD, Secretary of HHS, and Blue Cross/Blue Shield of Kentucky, the Medicare carrier. The lawsuit seeks declaratory and injunctive relief on the ground that the development and payment of fees for diagnostic and surgical services rendered to Medicare beneficiaries, effective April 1, 1990, are in direct and explicit violation of the Medicare amendments to the Omnibus Budget Reconciliation Act of 1989, which provide, in part, that:

1. Specified ``overvalued'' diagnostic and surgical services were to be reduced by 15%;

2. All other diagnostic and surgical services were to be increased by 2%; and

3. In determining the reasonable charge, the prevailing charge for each service may not exceed the prevailing charge or fee schedule amount for that specialty of physicians that furnish the service most frequently, nationwide.

In Kentucky, the Medicare carrier presented physicians with fee screens that were reduced across the board by 30% to 40%, compared with 1989. One fee screen for an otherwise ``undervalued'' service was reduced by 82%.

In 1984, the US Court of Appeals for the Sixth Circuit, in the case of Michigan Academy of Family Physicians v. Blue Cross and Blue Shield of Michigan, interpreting the then-existing Medicare Act, found that the Secretary of HHS was determining the fee screens incorrectly and should not discriminate between specialists and nonspecialists. However, neither HHS nor the Medicare carrier in Kentucky ever made any adjustment in the fee screens pursuant to this court decision in the years 1985 through 1989.

The Complaint alleges that after failing for five years to make the adjustment in fee screens ordered by Michigan Academy, the Secretary and the carrier applied that methodology in 1990, after it had been specifically overruled by Congress. The result was dramatically undervalued fee screens, to which further reductions were applied as mandated by recent Medicare amendments. Because the proper methodology was not used to determine the ``prevailing charge'' for the years 1985 through 1989, the current method is not in compliance with federal statutory guidelines.

Dr. Steinberg is a ``participating'' physician under Part B of the Medicare program, and must therefore accept the amount of payment determined by the Secretary of HHS and the Medicare carrier as full payment for services rendered. Patients treated by ``nonparticipating'' physicians (65% of all physicians, nationwide) will see a dramatic increase in the amount that they will be required to pay.


Cataract PPOs Proposed by HCFA

A pilot program for cataract PPOs, patterned after the Health Care Financing Administration's coronary artery bypass graft (CABG) PPO, is slated for testing at three sites. The cataract PPO would pay a single lump-sum, discounted fee to the facility, covering all facility, physician, and material fees. The incentive will be a high volume, with patients coming from long distances. The HCFA states that it does not intend to create a ``single provider'' model. Participation by beneficiaries would be voluntary; they would be attracted by advertising and a reduction in copayments.

The American Academy of Ophthalmology has voiced strenuous objections to the proposal, stating it would put the government's ``seal of approval'' on the ``cataract-mill model.'' A single disease, rather than the patient, would become the focus of service. The result would probably be to increase volume, the opposite of the government's stated intention.

A Georgia ophthalmologist states he has been approached by an entrepreneur, who allegedly hopes to earn a $300,000 consulting fee. The argument is that ``if you don't do it, someone else will.'' Ophthalmologists in the area are very fearful. Once instituted, such systems tend to become en- trenched, whatever their effect on patient care.

The proposal has the strong support of new HCFA Ad- ministrator Gail Wilensky, who helped develop the CABG PPO now being tested.


Garbage and the Status of Physicians

Physicians who have a laboratory are, by definition, generators of hazardous waste.

Performing simple procedures that are exempted from proficiency testing requirements still subject the physician to Medicare regulations for laboratories and the need to pay the certification fee. Stool guaiacs, fingerstick glucose determina- tions, and urine dipsticks are examples of such tests. Of course, these also generate infectious waste, especially if the physician uses a glove for the rectal examination.

The pollution of beaches by syringes dumped overboard by a US Navy aircraft carrier serves as the justification for increased regulation of physicians. Karl Sandberg, MD, of Wrightwood, CA, describes the procedures in a letter to his county supervisor, after the ``shock troops'' hit his office:

The inspectors started wandering through the clinic looking into rooms with closed doors without so much as a ``by your leave.'' Remember that this is while I am seeing patients and that most of their ``search'' took place in the back office where patients are seen. Don Hann expressed in a loud voice his concern that used tongue blades and examining table paper and paper gowns were not in ``red bags marked infectious wastes,''...in a locked and separate storage room with warning signs....

The mentality that anything anyone has touched is ``infectious waste'' is limitless in its application (as well as ludicrous). What about the disposable forks and spoons at McDonald's? What about the kleenex you dispose of in your own home?

Noel Kleppel, MD, an attending surgeon at the Brooklyn- Caledonian Hospital and a ``generator'' of infectious waste, showed a quadruplicate form to a Medical Tribune reporter. He must send one copy to the City, one to the State, and one to the Sanitation Department.

``You know what this means? It means I report to the gar- bageman.''

AMA Unveils ``Health Access America''

The AMA's proposal, intended to ``restructure and strengthen'' American medicine, looks very much like the Pepper Commission report. In fact, at the recent National Health Forum meeting in Washington, DC, the AMA took credit for the deciding vote on the Pepper Commission in favor of a payroll tax to fund a public program. The vote was cast by Reagan appointee James Davis, former AMA president.

Key provisions include requiring employers to provide health insurance; expanding Medicaid; and ``practice parameters'' to ``assure only appropriate, high quality services are provided.'' No cost estimates were given.

The $2 million campaign, described as ``blowing 76 trombones'' in the Medicare-Medicaid parade, marks a cosmic transformation from the days when the AMA opposed government medicine. It is time to ``extinguish the flame'' of the ``buccaneer'' spirit of private enterprise in medicine, according to Marshall Block, MD, editor of Arizona Medicine (Feb 1990).

``The world has changed, and the AMA has changed,'' said AMA president Alan Nelson, MD. ``Thank God.''


Access Assurance in South Carolina

In order to forestall the imposition of mandatory assignment by the South Carolina legislature, the Greenville County Medical Society prepared a resolution requiring all member physicians either to staff a primary care clinic for the indigent or to accept up to two new Medicaid patients per month into their practices. Members not in compliance could be referred for possible action by the Board of Censors. A state society resolution to study the goal of 100% Medicare/Medicaid participation will be presented at the annual meeting. The society is worried by the legislature's ``irritation'' at physicians' unwillingness to see Medicaid patients, despite recent increases in payment. Some recommended publishing a list of those who ``adamantly refuse'' Medicaid reimbursement.


AAPS Members a Little Different

The AAPS survey on Medicare (see p. 1) showed AAPS members to be far more committed than other respondents to maintaining physician independence and limiting the role of government. Only 1.5% said they favored NHI, while 35% think Medicare is unconstitutional. Almost half favor abolishing Medicare altogether, although a substantial proportion are of or near Medicare age themselves. Nearly a third accept new Medicare patients only under special circumstances, if at all.

(Some care for these patients without compensation.) However, AAPS members are not significantly different from other physicians in the percentage considering practice restrictions in response to new or proposed regulations. Early retirement is contemplated by 69%, about the same as for other physicians. But two AAPS physicians dissented strongly:

``No, I'm not going to retire early. I am going to fight the bastards! I do private medicine only.''

``No, I'm not going to quit. The SOBs can't run me out!''

Emeritus member R.D. Berkebile, MD, commented that ``the AAPS is the last wall between medicine as we knew it and the Soviet type of complete politician control.''

Nearly 40% of AAPS active members have sent in their questionnaires; responses are still coming in. For complete results, please send a self-addressed, stamped envelope.


New Members

AAPS welcomes Drs. Robert J. Broselow of Lubbock, TX; Carol A. Brown of Honolulu, HI; Calvin Ennis of Escatawpa, MS; Paul Glanville of Chandler, AZ; Emerita Gueson of Bensalem, PA; C. Thomas Jewell of Boise, ID; Nathaniel S. Lehrman of Roslyn, NY; I. Lloyd Roberts of Glen Head, NY; R. Owen Sear of Winter Haven, FL; Edward Sodaro of Amityville, NY; Alan Shewmon of Los Angeles, CA; and William V. Trowbridge of Novelty, OH.


Keeping the Flame; and Errata

Dr. Peletiah Webster's letter (AAPS News April 1990) was previously published in Private Practice.

Robert M. Webster, MD, notes that the date was 1780, not 1789. He also shares an observation: ``The men that look after the furnaces do not set the world on fire-nor do they put out fires!''


AAPS Calendar

April 20, 1990. Preserving the Practice of Private Medicine. Medicolegal seminar, Toledo, OH.

April 21, 1990. Board of Directors meeting, Toledo.

May 13-16, 1990. Eighth IATROS Congress, Reform Club and Royal Horse Guards Hotel, London. IATROS is the international voice for private doctors. Contact R.S. Jaggard, MD, 10 E. Charles St., Oelwein, IA 50662. Telephone: 319-283-3491.

Sept 13-15, 1990. 47th Annual meeting, Clarion Hotel, Scotts dale, AZ.

Oct 17-19, 1991. Annual meeting, Lexington, KY.