Volume 47, No. 5 May 1991

PHYSICIAN SUES PRO

``I decided I'd had enough unjustified harassment by the PRO so I went ahead and sued them,'' said AAPS Past President Victor F. Duvall, MD, a family physician in Clarkson, KY. ``I forgave them repeatedly and asked them to retract their defamatory statements, but they refused.''

His complaint names as defendants the Indiana Peer Review Organization, d/b/a Sentinel Medical Review Organization and a number of individuals employed by Sentinel. It alleges the following:

Dr. Duvall is asking for exemplary damages. He believes the reviewers' acts were malicious in that they were specifically intended to cause damage and were carried out with a flagrant indifference to his rights.

Dr. Duvall also asks the court to enjoin the defendants from harassing, threatening, and intimidating him by singling him out from all other medical practitioners in the Commonwealth of Kentucky for more stringent review.

The lawsuit is not prompted by an objection to the concept of peer review. ``I am a strong supporter of peer review,'' Dr. Duvall stated. ``I have participated in it pro bono in a number of states. What I object to is negligent, arbitrary, and capricious review.''

``The PRO is supposed to base its judgment on `professionally accepted criteria.' But have you ever seen any of their criteria published?'' he asked.

Originally intended to save money, the PROs drive up the cost of medical care, in Dr. Duvall's opinion, because physicians feel compelled to do extra tests and request unnecessary consultations in anticipation of PRO questions. Also, the $300 million budget for the PROs does not include the cost of wasted physician time and energy.

The defendants challenged Dr. Duvall's lawsuit in the state court on jurisdictional grounds and prevailed. An amended com- plaint will be filed in federal court.

A copy of the complaint and exhibits may be obtained from AAPS headquarters, 1601 N. Tucson Blvd. Suite 9, Tucson, AZ 85716, 1-800-635-1196.

Will More Money Help?

The main result of spending $300 million per year on PROs, according to Thomas Morford, director of the Health Standards and Quality Bureau (HSQB), has been to ``catch a few bad guys and kill a lot of trees.'' The Institute of Medicine has called the PRO program ``confrontational, arbitrary, and of dubious scientific merit.''

The proposed answer: the Uniform Clinical Data Set, an interactive computer system for storing each review. The start- up cost: $25-30 million. A problem: lack of peer review for the (unpublished) algorithms (Med & Health 3/18/91).

The Cost of Regulation: ``Deadly Overcaution''

``If a drug that has just been approved by the Food and Drug Administration (FDA) will start saving lives tomorrow, then how many people died yesterday waiting for the agency to act?'' (``Yesterday'' means the two to three years that it generally takes the FDA to improve a New Drug Application.)

This question is posed by Sam Kazman of the Competitive Enterprise Institute (J Regulation & Social Costs, 9/90).

In the wake of the thalidomide story in 1962, the Kefauver- Harris amendments fundamentally changed the nature of the FDA and the drug approval process. Now, new drugs must be proved to be effective as well as safe. The default option on NDAs has become disapproval instead of approval. And centralized regulatory authority has replaced market mechanisms as the primary decision- making force.

Some of the effects of regulation: (1) FDA requirements have more than doubled the development costs for new drugs. (2) The average review time for an NDA rose from 7 months to 30 months between 1962 and 1967. After FDA attempts at ``streamlining,'' the time was 32 months at the end of the 1980s. (3) From 1975 to 1979, the number of new domestically developed drugs that entered human testing for the first time dropped to half the rate for the preceding decade. Many laboratories virtually ceased research on new drugs and diverted their resources into auditing their old data.

As Kazman puts it, ``there are times when overcaution can be deadlier than lack of caution, which is why we do not elaborately stress-test a rope before throwing it to a drowning man.'' But even though the FDA's policy may make little medical sense, it makes perfect political sense.

``From the FDA commissioner...to the individual DNA reviewers, the message is clear: if you approve a drug with unanticipated side effects, both you and the agency will face the heat of newspaper headlines, television coverage, and congres- sional hearings,'' Kazman writes.

On the other hand, FDA Commissioner Alexander Schmidt once stated that ``in all of FDA's history, I am unable to find a single instance where a Congressional committee investigated the failure of FDA to approve a new drug.''

The longest lag times for the introduction of new drugs have been in the areas of cardiovascular, respiratory, central nervous system, and cancer drugs. Kazman cites beta blockers, thrombolytic agents, levamisole, and misoprostol, arguing that thousands of premature deaths might have been prevented by earlier approval of these drugs.

The results of FDA delay are coming to public attention due to the efforts of AIDS victims, who have far more political clout than victims of heart disease and cancer. Rep. Tom Campbell (R- CA) has proposed legislation that would permit physicians to prescribe nonapproved drugs for life-threatening or severely debilitating diseases, with the patient's informed consent.

However, Congress and the FDA may be preoccupied with matters other than the silent (and not-so-silent) victims of overregulation. Senator Kennedy is focusing on prescription drug promotion practices. And David Kessler, MD, the new FDA Commissioner, is promising tougher regulation of the pharmaceutical industry. He plans to set up a team of 100 criminal investigators and is asking for subpoena powers and civil monetary penalties.

Kazman suggests changing the FDA's veto power over new

drugs to a system of certification.

``This approach would bring pharmacology in line with the rest of medical care, where government approval is the exception, not the rule,'' he states.

Actually, the rest of medical care may be brought into line with pharmacology if present trends continue. An examination of the experimental results is thus very timely.

Why Are We Putting Up With This?

What is the difference between the PRO and the PLO?

None, they are both terrorist organizations.

A few years ago, my government wanted me to quit spending so much money on its citizens....``We will focus on you,'' [it said]. ``Oh please, I don't have any control over who seeks my services and I don't have a lot of control over what's wrong with them. I just try to help them. I am out here in the boondocks trying to translate your program into health care.''

My charts were sent out to idiots who didn't have enough to do. They weren't very smart, because all of their criticisms later had to be retracted. In the meantime, $6 million was spent in Illinois to prove that doctors like me are incompetent. Dollars cut from actual medical care and given to PROs to terrorize our lives. Occasionally they nailed someone and took him to a hanging court. How much better it would have been to spend that money on help for us.

Before the law, I am a pariah. I don't live under the Constitution of the United States of America; I live under the Code of Hammurabi....I once received a Transmittal Five citation. The crime I committed was a year before the ruling was invented. No one in government circles seemed to worry about Ex Post Facto. I am not sure how it got rescinded.

Laws shouldn't abuse us, and we shouldn't accept abuse.

What is the current theory of child abuse? The parent (substitute government) is overstressed and takes it out on one of the children. Usually not all of the children, one of them. The child selected for abuse has a certain personality. The child feels he deserves it. Like so many country doctors who feel very humble and accept so much criticism. The other children do not feel unworthy and do not accept the abuse, therefore they do not get abused. The parent gets some kind of libidinous satisfaction out of abusing the child. The governmental employees who were basically worthless people with no careers of their own got satisfaction out of pushing doctors around. The abused child is a scapegoat, and in everyone's mind becomes responsible for the uproar.

Just writing to Congressmen doesn't work. They are like Saddam; all they understand is sheer power.

Do you remember the movie Network when everyone leaned out the windows and said, ``I'm mad as hell and I won't take it anymore''? That is what doctors need to do.

Elizabeth B. Korte, MD, Family Doctor of the Year

excerpted from a speech in Iowa City, March 5, 1991

[Some of the younger doctors in the audience who either accept the situation as it is or have not experienced what I am talking about were negative or hostile. I fired up the language and maybe I went too far. ``Dr. Korte,'' some said, ``could you tone it down for the students; we don't want to scare them out of family practice.'' But their sweet little idealistic faces made me feel like a rat, not telling them how they are going to be treated. Others said, ``The young doctors don't relate to what you are saying because they have never known the freedom''!]

HCFA to Test ``Bundled'' Fees for Cataract Surgery

The Health Care Financing Administration (HCFA) recently announced that three geographic areas have been selected to test ``bundled'' or ``global'' fees for cataract surgery: Albany/Troy, NY; Cleveland, OH, and Dallas/Ft. Worth, TX. The test payment system, called the Medicare Cataract Surgery Alternate Payment Demonstration Project, will be tried for three years.

The Limited Legal Consultation Service has received a number of telephone calls from AAPS physicians throughout the country who are concerned about the implications of this project.

Under the new system, HCFA will pay a single fee for intraocular lens implant surgery instead of individual costs incurred by the surgical facility and the surgeon. HCFA's hope is that the ``bundled'' fee will be less than the total fee it usually pays.

Surgical centers and hospitals in the three areas would act as the lead organizations on behalf of the ophthalmologists on their staff who agree to participate. The facility must submit a flat fee. Medicare is to pay this fee to the facility, which will then pay physicians.

``We must offer proper incentives to providers if we are to receive better value to our health care dollars,'' stated HCFA Administrator Gail Wilensky. ``One good way to achieve this is to pay a negotiated price for a variety of services. In this way, providers themselves can decide where to economize and still offer competitive prices'' (BNA's Medicare Report).

A spokesman for Abt Associates of Cambridge, MA, the company providing the technical support for the design and implementation of the project, assured the Legal Service that the new fee program is voluntary. HCFA is to select ``providers'' to be in the fee program on the basis of the physician's record of quality assurance, number of surgeries performed, complication rate, and medical ``appropriateness,'' as well as price.

Obviously, if HCFA determines that cataract surgery can be obtained from hospitals and patients for a single fee, this fee arrangement will be implemented across the country for cataract surgery and other medical procedures as well.

The Legal Service is concerned that hospitals and surgical facilities will attempt to coerce ophthalmologists to participate in this program. There are concerns about retribution or intimidation for one group, and economic or credentialling problems for the other group. The Legal Service will follow closely the implementation of this program.

Physician Wins on Appeal to ALJ

Two years after appealing claims denials related to percutaneous transluminal coronary angioplasties (PTCA), Ralph Millsaps, MD, was awarded the ``full amount in controversy'' (about $1500) by an Administrative Law Judge.

The Medicare carrier denied payment (sometimes) for patient visits, arguing that they should be covered by HCFA's ``global surgery'' reimbursement. The ALJ ruled that PCTAs are not surgery.

At the same time that he appealed to the ALJ, Dr. Millsaps had filed suit in federal district court. The court denied him a hearing because he had not first exhausted his administrative remedies (Part B News, 4/1/91).

Dr. Millsaps, who is a member of AAPS, practices cardiology in Evansville, IN.

State May Revoke License Based on PRO Findings

On Feb. 8, 1991, the West Virginia Supreme Court of Appeals ruled that a state licensure board need not make an independent finding of fact in order to revoke the license of a physician who has been excluded from the Medicare program.

It would be ``unreasonable and a waste of resources to require the board of medicine to reexamine, individually, every case discussed in detail by the PRO, an agency comprised of doctors whose sole duty is to review such cases,'' ruled the court. The court rejected the doctor's ``after-the-fact'' complaint that the PRO assessment was not adequately detailed because it was made only after the board had revoked his license (BNA's Medicare Report 3/8/91).

Physician Awarded Attorney's Fees

Because the case brought against him by HHS Inspector General Richard Kusserow was not ``substantially justified,'' Ruben Thorbus, MD, was awarded attorney's fees by Administrative Law Judge Allan P. Ramsay, Jr.

This decision was considered to be another reverberation from the discovery of the bounty system used to reward investigators for meeting quotas in the prosecution of physicians for fraud.

``Arbitrary and capricious'' conduct seems to pervade the entire sanctions process, in Judge Ramsay's opinion. The official responsible for issuing the preliminary and final sanctions in Dr. Thorbus' case (James Patton of the Office of Administration Sanctions) ``admitted that he never saw the evidence,'' Ramsay wrote (CMA Medical Executives Memo 3/22/91).

Yes, Regulation Can Be Turned Back

During World War II, all important consumer goods were price controlled. After the war ended, the bureaucrats (who liked their jobs) and most economists and intellectuals (with the exception of Ludwig von Mises) wanted the price controls to continue. Only the common people disagreed.

On Nov. 5, 1946, the voters told many sitting Congressmen to go home. The Republicans took control of both houses, picking up 57 seats in the House and 13 in the Senate. The new Congressmen were overwhelmingly committed to ridding the economy of price controls and other lingering wartime regulations.

Former President Hoover commented: ``The whole world, including the United States, has for years been driving to the left on the totalitarian road of `planned economy.' America is by this election the first country to repudiate this road'' (Gary M. Anderson, ``The 1946 Voter Revolt Against Government Regulation,'' The Freeman Feb 1991).

New Members

AAPS welcomes Drs. Frederick Alexander of Joliet, IL; Vishnu Amin of Emerson, NJ; Jeffrey P. Barasch of Ridgewood, NJ; Richard Basuk of Montvale, NJ; Jeffrey Berdini of Woodcliff Lake, NJ; Alex Biener of Emerson, NJ; Mary Blome of Cresskill, NJ; William K Boss, Jr. of Hackensack, NJ; Steve Brenner of Emerson, NJ; Joseph Buder of Sandusky, OH; Ann and Robert Bullington, Jr. of Phoenix, AZ; Don Buswell-Charkow of Ocoee, FL; Robert Callahan of Tampa, FL; Frank Candido of Emerson, NJ; Trent Carroll of Springfield, OH; Michael Cooney of Columbus, OH; D.C. Dantini of Ormond Beach, FL; Steven H. Davis of Whittier, CA; Robert del Junco of Orange, CA; Tirso del Junco, Jr. of Los Angeles, CA; Ira Esformes of Emerson, NJ; Zev Fainsilber of Westwood, NJ; Mario Fatigati of Pittsburgh, PA; M.A. Fermaglich of Teaneck, NJ; Herbert Fine of Westwood, NJ; William Frank of Sanford, ME; Stefan Fromm of Dalton, GA; MR Grate of Tallahassee, FL; Nathan L. Graves of Grapevine, TX; Michael Gross of Emerson, NJ; James S. Hanner of Tampa, FL; Mark Helbraun of Emerson, NJ; George Jacobs of Oregon, OH; Mark Jenkins of Surgoinsville, TN; Paul B. Jones of Grand Junction, CO; Edmond Jordan of Greenwood, SC; Thomas Kaminski of Warren, OH; Theodore Kanellakes of Joliet, IL; Gary Karpf of Princeton, NJ; Charles Kordula of Westwood, NJ; Timothy Lefevre of Tarzana, CA; William Martin of W. Kennebunk, ME; William Matthews of Concord, CA; William McHenry of Corsicana, TX; Daniel J. Morris of Tampa, FL; Ralph Myrow of Westwood, NJ; Mary Newburger of Concord, CA; Milne J. Ongley of Newport Beach, CA; Paul Parker of Montvale, NJ; Martin Phee of Hinsdale, IL; Samuel Pietrandrea of Westwood, NJ; Harry Preble of Houston, TX; Anthony Proske of Joliet, IL; Jeffrey Rapaport of Fort Lee, NJ; David Ritter of Boca Raton, FL; Stanley Rossen of Park Ridge, NJ; Laurence Rubin of Bethpage, NY; Lalantha Samarsinghe of Westwood, NJ; Lee Schlosstein of Anchorage, AK; Avery Seifert of Boise, ID; Michael Silverman of River Vale, NJ; Frederick Small of Englewood, NJ; Michael Sternschein of Ridgewood, NJ; Steven Stoller of Ridgewood, NJ; Robert Tague of Ste. Genevieve, MO; Robert Walsky of Emerson, NJ; Robert Walsky of Emerson, NJ; David Westbrock of Dayton, OH; Rudolph J. Wolf of Skiatook, OK; Ignatius Zairis of Ridgewood, NJ; Stephen Zoretic of Montvale, NJ; and the Women's Specialty Medical Group of Whittier, CA.

AAPS is especially pleased to welcome the following new student members: Anthony T. Bernens, Dyatra Bursey, Merry Ann De Leon-Sorrell, Nancy Flynn, Raoul B. Joubran, Nancy Morgan, Angela M. Porter, Stephen Ross, John R. Shockley, John U. Siegrist, Jane Uva, and Ben K. Weeman.

From Capitol Hill

Medicare ``Privileges''. The President's 1992 budget request of only $1.56 billion for Medicare contractors falls about $300 million short of what they need, according to the Health Insurance Association of America. For the ``privilege'' of being paid on time (within 17 days for participating and 24 days for nonparticipating physicians), ``physicians and patients would have to put up with greatly reduced carrier service.'' At a time when major changes are expected to generate thousands (or millions) of inquiries and appeals, the budget for handling them would be cut in half.

Pay Now, Learn Regulations Later. An unprecedented number of comments has delayed final regulations implementing the Clinical Laboratory Improvement Act (CLIA), but not the billing mechanism. In a ``few weeks,'' HCFA expects to send bills for $261 plus an application for a ``provisional certificate'' to 550,000 ``entities'' believed to do testing on human specimens. The form takes about 2.5 hours to complete; HCFA expects to receive 320,000 of them. The $261 will be the first of many fees that will be used to finance regulatory costs. HCFA expects to contract with more than 10,000 people from state health departments to inspect labs (Part B News 4/1/91).

Paying Dermatologists for EKG Readings. Ordinarily, dermatologists do not read EKGs. However, the only way that HCFA can think of to respond to the furor over the termination of Medicare payment for ``routine'' interpretation of EKGs is to slightly increase the fee for office visits. Under the RBRVS, there are no specialty differentials for office visits. Acknowledging the problem, Bernard Patashnik of HCFA said, ``the reality is that [the payment] does not always go to the right person.'' Anyway, ``it's just an idea'' (Part B News, ibid.)

Fascist Medicine Coming. ``We don't have to have a health policy... we are stumbling in the right direction,'' said Princeton economist Uwe Reinhardt. ``At the end of the 90s, [we will have] 40% of healthcare paid for by the government and 60% paid by the private sector through an insurance industry that is private in name only'' (Med Tribune 3/2/91, emphasis added).

AAPS Calendar

Apr. 26, 1991. Medicolegal seminar, cosponsored by St. Louis Metropolitan Medical Society, St. Louis Airport Marriott, St. Louis, MO. Call 314-371-5225 to register.

Apr. 27, 1991. Board of Directors meeting, St. Louis, MO.

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