1601 N. Tucson Blvd. Suite 9
Tucson, AZ 85716-3450
Phone: (800) 635-1196
Hotline: (800) 419-4777
Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

Volume 56, No. 9 September 2000

OBEDIENCE SCHOOL

Ordering a military recruit to do stupid things is not at all pointless. It teaches him the most important military duty: to obey orders without question. He also learns that he is a nobody, a cog in the machine, a Government Issue.

Recruits soon learn another lesson: Never volunteer.

The "voluntary" compliance plans proposed by the HHS OIG ( www.hhs.gov/oig/modcomp/cgpphysiciandraft.htm) could be described as onerous, costly, counterproductive, mindless, and stupid-but not pointless. They will obviously not "further the mission of all physician practices to provide quality care to their patients," the stated intention. The true, unstated objectives-judging from the likely outcome-are probably to educate physicians about their position in the government hierarchy; to inculcate proper attitudes of subservience; to encourage self-incrimination; and to foment suspicion, distrust, and fear in all physician practices.

Another possibly intended consequence of "compliance" is to destroy solo and small group practices. Already, most such practices spend between 25 and 50% of their time on compliance issues, stated attorney Jonathan Emord at a Heritage Foundation lecture on Mar. 1st ( www.heritage.org/library/lecture/hl665.html). That time, which goes uncompensated, "is a high tax that they must bear to practice medicine in the U.S."

AAPS President Lawrence Huntoon, M.D., who spoke at the same conference (see AAPS pamphlet #1073), concurred: "I am beginning to wonder whether I can afford to stay in practice or not.... The business of keeping us informed and in compliance continues to spread and grow like a fungus-an appropriate term for things that feed on objects that are in the process of deteriorating" (see seminar invitations in your mail).

Robert Berenson, M.D., of HCFA declares that "we have no intention of punishing anyone for honest mistakes" and even invites reports of "instances of improper pursuit of physicians for honest, inadvertent errors" (testimony before House Budget Committee Health Task Force on Regulatory Burden on Providers, June 14, 2000). However, making a distinction between innocent billing errors and outright fraud is not current practice, according to Kathleen McDermott, Esq., at the annual meeting of the American Health Law Association, June 18-21. "For many prosecutors, there's no such thing as a mistake" (BNA's HCFR 1/28/00).

In fact, "the government is more aggressive and inflexible with individuals who have less resources to protect themselves," McDermott said. "Physicians are particularly vulnerable in fraud investigations because, unlike corporations, they can be sent to jail...and are more readily excluded from federal health care programs without greatly affecting patient access to care."

Though prosecutors have incentives to recover money, they will pursue cases aggressively even when there is not much money to gain (Medicare Compliance Alert 6/26/00).

The 42-page OIG Draft Compliance Program Guidance for Individual and Small Group Practices (op. cit.) places great emphasis on designating and training a compliance officer, documenting and updating the training at least yearly, auditing the practice, and documenting and auditing the compliance program. The "Provider Self-Disclosure Protocol" includes a Government sampling program known as RAT-STATS.

Simply having a compliance plan on the shelf could be a liability, because violations of the doctor's own plan "threaten a practice's status as a reliable, honest, and trustworthy provider of health care"-apparently even without "significant failures to comply with applicable Federal or State law."

In these days of "qui tam millionaires," having a compliance officer means constant vigilance to prevent him from becoming a whistleblower. Tips include the use of psychological tests to screen out zealots prior to hiring; asking for periodic certifications that officers are not aware of any problems requiring disclosure; contract clauses requiring the officer to donate proceeds of qui tam suits to charity; and making the officer feel empowered and safe, as through a generous severance package (Med Compliance Alert 7/3/00).

The "antifraud" effort is on a wartime footing, especially in California. "[P]eople who will rip off the Medi-Cal system... are the scum of the earth..., and I will not rest until every single one is in prison," declared Gov. Gray Davis. According to attorney Patric Hooper, the environment is like the anti- Communist spy inquiries of the 1950s, which also dispropor- tionately targeted "foreigners." The civil rights of suspects have been violated, on several occasions at least, by the enforcement tactics of State Controller Kathleen Connell, according to the federal court in Los Angeles (BNA's HCFR 5/3/00).

Record numbers of convictions are being achieved in California. In fact, Alan Cates, chief of the Medi-Cal fraud prevention bureau, boasts: "We've never lost a case; every [suspect] has pled." His office threatens to add 6 months in prison for every 2- to 4-week period that the accused fights the charges (Medicare Compliance Alert 5/15/00).

Cates and Connell are named in a class action suit against the California DHS (Labotest v. Bonta). The complaint alleges: "Defendants' goals are obvious...-to put out of business providers who[m] defendants...suspect of wrongdoing, through summary administrative actions, without giving them a meaningful...opportunity to be heard" (BNA's HCFR 6/14/00).

AAPS has submitted specific comments on the compliance plan proposal, though the plan as a whole is objectionable. Learning to beg, heel, and fetch only validates the physician's acceptance of his status.

The unconstitutional assault upon the profession of medicine can be stopped only if a critical mass of physicians withdraws what Ayn Rand called "the sanction of the victim."


Collaboration vs. Integrity

Never underestimate the HCFA. By sweet-talking the AMA into promoting the RBRVS, they turned basic billing methodology into a nightmare of codes, and codes within codes, and codes within codes within codes....

Now Hear This, League of Physicians & Surgeons, 7/00

I received a telephone call from a U.S. Attorney's Office requesting that I train 10 staff members in coding for DRG assignment. They have the responsibility of reviewing patient records for DRG assignment accuracy and need to learn to code quickly so they know what to review. When I explained that, at best, I could train them to be entry-level coders IF they had an anatomy & physiology, health information, medical terminology, and pathophysiology background along with a minimum of 120 hours of coding training, she said that they didn't have time for that. When I suggested that they contract out the record review process to qualified health information professionals, she stated that they had no budget for that. I'm not going to conduct this training. And, I want to raise the question, how can fraud and abuse regulations be enforced properly when the individuals reviewing the records aren't qualified to conduct the review?
Prof. Michelle Green, MPS, RHIA, CMA, CTR
Alfred State College of Technology, Alfred, NY

 

How Much Fraud?

There is no evidence that fraud in federal health programs is any more pervasive than in defense programs; thus, there is no justification for more draconian laws in one sector than in another, stated Robert Charrow, former principal deputy general counsel for HHS (Heritage Foundation, op. cit.)

Advocates of extreme regulation lump together "fraud, waste, and abuse." The first term has a precise legal definition. The closest estimate of the amount comes from the DoJ claim to have "recovered" $0.49 billion, much of that being treble damages, in programs with total expenditures of $400 billion. "Waste and abuse" are not legal concepts, and can mean anything, usually that someone is doing something that the speaker finds objectionable. HCFA points to $12.6 billion lost to "honest errors," miscoding and the like. This is a meaningless statistic. If errors are honest, some will benefit the system and others will not. There is nothing to indicate that the IG "netted out" the errors, Mr. Charrow observes.

 

The Hidden Federal Deficit

The surplus announced by the Administration and Congress is a lie, according to Martin Weiss' Safe Money Report, July 2000. The Flow of Funds report published by the Federal Reserve shows that the U.S. government added $131 billion to the federal debt in 1999. The "surplus" is generated by raiding federal "trust funds," including Social Security.

* * *

There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible to live without breaking laws.
Ayn Rand, Atlas Shrugged

 

Annual Meeting: Nominations and Resolutions

The following slate will be presented at the annual meeting in St. Louis by the Nominating Committee:

President: Dr. Robert Cihak of Aberdeen, WA
President-Elect: Dr. Robert Urban of Belle Vernon, PA
Secretary: Dr. Claud Boyd of Augusta, GA
Treasurer: Dr. R. Lowell Campbell of Corsicana, TX
Directors: Drs. Dexter Blome of Zanesville, OH; Kenneth Christman of Dayton, OH; Melissa Clements of Oklahoma City, OK; Dennis Gabos of Pittsburgh, PA; Robert Gervais of Mesa, AZ; Holly Fritch Kirby of Lee's Summit, MO; James Pendleton of Bryn Athyn, PA; James Weaver of Durham, NC.

Resolutions are due by Sept. 25. (Call 800-635-1196.)

 

Vaccine Compliance uber Informed Consent

"Not one person...should be satisfied...until the immunization rate...is 100 percent," said HHS Secretary Donna Shalala at the 34th Annual National Immunization Conference. "Eventually, HHS will provide $100 million for states to work with HHS to create national immunization registries."

The CDC estimates that 32% of U.S. children are enrolled and have at least two vaccine doses recorded in a registry. All Kids Count, an advocacy group that helps to fund State registries, reports that at least one, Oregon's, has a cost-sharing agreement with its Medicaid program.

Registries are used to monitor the implementation of new vaccine recommendations and to "change kids' lives." Children who are underdosed or who receive subpotent lots or expired vaccine can be called back (BNA's HCPR 7/10/00). Better tracking of adverse effects is not one of the stated goals.

One method of improving compliance-threatening a cutoff of welfare benefits-is being tested in several States ("local laboratories of public policy innovation"). Georgia reports a significant increase in up-to-date immunization status: 72.4% of 2-year-olds in the intervention vs 60.6% in the control group (JAMA 2000;284:53-59, 85-87). The authors concluded that no harm was done because the sanctions were actually carried out only 11 times; usually a threat sufficed. An accompanying editorial opines: "The ethical stumbling block [in the program] rests in the fact that financial penalties...were threatened only to individuals already at high risk for economic deprivation." Apparently, JAMA editors would have no problem with administratively imposed punishment of all families that exercise their own judgment in matters concerning their children's health.

Another "controversial" element is that neither institutional review board approval nor informed consent of study participants was sought. HHS waived these formalities: it claims the right to do so in order to facilitate projects "judged likely to promote the objectives of AFDC."

The Nuremberg Code, however, has no exemption for public policy research or HHS discretion: "The voluntary consent of the human subject is absolutely essential"-and "without...any element of force, fraud, deceit, duress, overreaching, or other ulterior form of constraint or coercion...." (See http://ohsr.od.nih.gov/guidelines/nuremberg.html.)

 

AAPS Calendar

Oct. 25-28, 2000. 57th annual meeting, St. Louis.
Oct. 24-27, 2001. 58th annual meeting, Cincinnati.


 

White House Tactics Recapitulated

Briefing is now complete in the remand of AAPS v. Clinton to the U.S. District Court. The Administration has argued, in contesting an award of fees and sanctions to AAPS, that the Working Groups led by Ira Magaziner never really advised the President about health care reform, but only served as staff to the Task Force made up of Cabinet secretaries.

Thomas Spencer of Miami writes for AAPS:

"The government waged a war of attrition against the plaintiff and contended that the girth, alleged `fluidity,' and alleged disorganization of the working groups did not meet its paradigm test.... It is now clearly evident that every major contention made by the government, supported under oath by various declarations of high government officials, was either grossly misleading or outright false.

"The government has never before taken the position that a group needs to actually meet with the President personally to advise him. In...the first appeal in this case, the following colloquy between the government and the Court transpired:

Court: Are you saying, then, that when FACA talks about committees giving advice utilized by the President, that literally means they've got to come into the Oval Office...and chat with him? Or that someone is going to stand over him while he reads their drafts, their reports?

Mr. Stern: No, Your Honor.

"...[T]he entire mechanism resulted in direct consensus advice to the President by each of the working groups.... The Task Force was neither the intermediator nor the facilitator of the advice.... In fact, the Task Force never prepared a report. The only report prepared was that of...the working groups."

Working groupies received Guidelines for Meeting with the President. "...[T]he government suggests...that the statement made at Tollgate IV [about the meeting process] was simply a `feel-good' therapy spin applied by Mr. Magaziner...."

AAPS stands by its contention that the government acted in bad faith: "We recognize that we have a great burden in this circuit to demonstrate bad faith.... It would be far more monetarily efficient for plaintiffs to waive their bad faith argument and rest on EAJA [the Equal Access to Justice Act]. But it would not be right or just or in the public interest....

"At every stage of this litigation, until the boxes revealed the truth, this government repeatedly played elaborate word games, made misrepresentations, and employed dilatory discovery tactics to stretch the truth and to lengthen the time and expense of the case to plaintiffs....

"When the government is accused of intentional bad faith misconduct demonstrating a deliberate and calculated strategy of vexatious conduct, it claims that such conclusions cannot be drawn by the court from circumstantial evidence, inferences, or the totality of the facts.... Of course, when it prosecutes ordinary citizens..., its circumstantial evidence theories work....

"One badge of bad faith is an advantage to the government to engage in this conduct.... The advantage effectively achieved...through the administration's ridiculous litigation positions was to...maintain...secrecy, [giving the President] a better chance to pass the Health Security Act.... We have demonstrated many times before the factual record of paranoia and secrecy surrounding this case....

"The public interest requires that the government not `get away with it.' Especially here, where the government confesses no error, retracts no position, and admits of no mistakes."

 

CPT Codes Challenged as Basis for Fraud

After 7 years of costly litigation, prosecutors are demanding $190,000 from George Krizek, M.D. [see statement of Blanka Krizek on Administrative Law and Abusive Fraud Prosecutions, and AAPS News Jan 2000]. At a hearing in late August, a District Court judge will consider the methodology for calculating the damages. From a memorandum by Monika Krizek Griffis:

The CPT codes "putatively form the basis for the Government's...calculations. As privately copyrighted descriptions of medical services that are neither law nor regulation, these codes are inherently unsuited to be a basis for either proving or quantifying fraud....

"Dr. Krizek,...who has been completely cleared of the wrongdoing the Government accused him of, is bizarrely still a hostage in the court system, trying to clear his name of allegations of `fraud' unspecified and undefined in any law.... While deciding against the Government on almost the entirety of the case, the trial Court fixated on one thing, the Current Procedural Terminology (`CPT') codes for psychiatric services, some of which include an approximate time factor. Although the Court found the language of the codes `ambiguous,' it determined that the Defendants had a `deficient' billing system, because they could not reconstruct with precision how much time Dr. Krizek had spent with any particular patient....

"The Government created a `liability methodology'... underpinned by no more legally binding an HHS source than the personal thoughts, ruminations and impressions of Special Agent Mathew Kochanski, a junior investigator, [in order to `add up' Dr. Krizek's work day]...."

The brief gives a detailed analysis of psychiatric codes 90843, 90844, 98053, 90801, 90862, 90220, and 90620. "Only two codes, 90843 and 90844, have any time dimensions attached to them, and these are meant to be approximations.... In a desperate attempt to `prove' Defendants' alleged fraud, however, Agent Kochanski heroically adds minutes here and there, and even supplies times when there are none in the codes.... [T]he Special Master did not question the Government's failure to provide any laws or regulations to provide a basis for these calculations....

"The Supreme Court has squarely indicated its disapproval of the type of hocus-pocus that the Government has performed here through Agent Kochanski's single-handed invention of CPT time dimensions [in Bowen v. Georgetown Univ Hosp]: `We have never applied the [Chevron deference] principle to agency litigating positions that are wholly unsupported by regulations, rulings, or administrative practice....'"

In Practice Management Information Corp. v. AMA, the Ninth Circuit rejected the notion that the CPT coding system is a law. The Secretary of HHS has taken the explicit position that adoption of the CPT codes was not a rule within the meaning of the Administrative Procedure Act due to absence of notice and comment. For the Court to apply this non-law, non-rule to Dr. Krizek deprives him of due process rights.

Defendants suggest an alternate methodology: the RBRVS. On this basis, the Government owes Dr. Krizek $4898.16 in underpayments for one of the five days at issue on remand.

"[T]he government never established any actual damages from Dr. Krizek's conduct.... [E]ven Government witnesses at trial established that the Government benefited from the many years that Dr. Krizek devoted to caring for...poor and elderly patients"-until this lawsuit drove him from practice.


 

Members' Page

A Free Market for Uninsured. There are millions of uninsured pets in this country; none of them have money to pay for their own medical care. Yet, according to the American Veterinary Medical Association, $11 billion is spent every year on fee-for-service medical care for pets. Capitation and managed care, of course, don't exist in veterinary medicine because, in a true free market, abuse of the customer is not tolerated.
Lawrence R. Huntoon, M.D., Ph.D., Jamestown, NY

 

Upside Down and Backwards. When you're young, you borrow money to go to school, buy a car, or buy a house. You make an arrangement with your neighbors, brokered by a financial institution, so you can have things you need now, when you don't have resources to pay for them.

Whole life insurance and employer-provided medical insurance are based on the perverse economic concept that young people should pay more for things they don't need, so older, wealthier people can benefit. Why acknowledge the financial limits of the young by loaning them money to buy consumer goods, only to ignore those same limits and coerce them to subsidize wealthier people who could afford to buy more and better medical care for themselves?
Gerry Smedinghoff, Consulting Actuary, Wheaton, IL

 

A Free Market in Peru. It's been more than a year since I moved here. In spite of the recession and medical insurance pressure to deform the market, people are willing to pay out of pocket for a good doctor's job. I am happy not to be exposed to paper cuts any longer, or to the fear of losing my life in a legal treadmill. Here we have respect, confidentiality, less overhead, no payment delays, no trivial lawsuits, and no stupid paperwork. By the way, the American College of Rheumatology is sending out templates to fill in on each patient to protect against U.S. government audits!

I hope to return to work in the U.S.A. when the "liberal" forces are defeated by the people. God bless America!
James Durand, M.D., an American Medical Refugee

 

Can't Afford Insurance. The Arizona Republic editorial board thinks that $17 per month is a lot for poor people to pay for state subsidized insurance. At the Diamondbacks game, I sat next to a first-generation immigrant couple, with good work ethic, who almost certainly make less than 200% of the poverty level. Total cost of the evening for them, including beer at $5 per glass, food, tickets, and parking: $56 or 3.3 months of insurance premiums. They said they try to get to a game every two or three weeks. While buying a newspaper this morning, I observed the scene at the local convenience store: lawn workers buying lottery tickets, soda, ice, and Hostess cupcakes. The average bill: $6.75, or $135/mon. The grocery items could have been purchased for 25% less at the supermarket. The 25% overspending plus the lottery tickets = $73/month thrown away, or 4.3 months of subsidized premiums.

Some people are subsidizing the ridiculously low premiums so that others can buy things that my skinflint immigrant grandparents would never have thought of buying. Sure, some poor people can't afford medical insurance, but some can. The government can't tell them apart.
Craig Cantoni, Capstone Consulting, Scottsdale, AZ

 

Reflections on Boy Scouts of America v. Dale. ...Great wars bring great revolutions. World War I brought to power the National Socialists in Germany and the Bolsheviks in Russia. What will come from our wars against smoking, the English language, the lack of accident and sickness insurance ("health insurance"), dirty air, traditional morals, and common sense?
Charles Courtney, Riverside, IL

 

A Dialectic. Carriers have been advised to penalize gastroenterologists who call in an anesthesiologist to render services. The gastroenterologists should be anesthestizing the patients themselves, and anyway monitored anesthesia is "medically unnecessary" for GI endoscopy-an invasive procedure. Yet my clinic was cited because I did not have anesthesia present while doing Yag lasers (shining a light in the eyes)! Of course, the anesthetist may not charge for being present, and Medicare doesn't require her presence if I do the very same procedure in my office. Dizzying, nonsensical rules, rules, rules.
Robert Gervais, M.D., Mesa, AZ

 

You Will Be Audited. At a recent Medicare compliance seminar in Oklahoma City, a lawyer formerly with the FBI and the HHS OIG said: "Physicians should make no mistake. The goal of the fraud and abuse hunters is to put each of you in jail. If that is not possible they are there to retrieve monies." The average amount sought for each physician is around $200,000. Every physician enrolled in Medicare or Medicaid can expect to be audited in the next two to five years. Once home health agencies and skilled nursing facilities have been shaken down, the focus will shift to physicians.

It is not unreasonable for physicians to consider opting out of Medicare. To paraphrase Sir Winston Churchill, when one accepts the King's sovereign, one becomes the King's man. When one accepts only the patient's sovereign, one honors the completely professional, personal bond of the patient-physician relationship. Moreover, the threat of audit from any third party is eliminated [see ASD's Front Line, June, 2000].
Melissa Kline Clements, M.D., Oklahoma City, OK


Legislative Alert

Patients' Bill of Rights Conference Stalled

The August Recess is upon us. The Conventions are stealing the public spotlight. And the highly contentious House-Senate Conference on the Patients' Bill of Rights has stalled, perhaps indefinitely. Time is running out.

After weeks of negotiations, House Democratic conferees have walked away from the talks. Then, both sides attempted to redefine the debate for the public, resulting in some high- profile parliamentary jockeying in the Senate. Democrats led by Senator Edward Kennedy (D-MA) have twice tried and failed to enact a Senate version of the more extensive-and litigious and more regulatory-House-passed bill. Senate Republicans, just before the July 4th recess, jumped into the fray to redefine the debate and narrowly passed yet another bill offered by Sen. Don Nickles (R-OK), the Majority Whip, that would have provided for limited liability for HMOs. But liberals and House sponsors of the Norwood-Dingell Bill have said that the Nickles version of the bill does not go far enough.

Capitol Hill observers have been able to piece together the unmaking of the House-Senate closed-door slugfest. Sen. Nickles, the key Senate player, knows something that most commentators miss: the Norwood-Dingell bill would probably garner fewer votes now, largely because of the regulatory details that have been seeping out.

The details often mess up health care policy, as Miss Hillary can testify. The House bill is so mind-numbingly complicated. The first major issue for the conferees was the question of how one designs an external review process before one sets forth the terms and conditions and scope of litigation. External review processes are in both bills. External review is something upon which everybody, seemingly, is agreed upon. Right? Well, on just that issue, the conferees slogged away for 6 weeks.

Then there is the tricky issue of employer vulnerability to suits. As John Hoff has written in a splendid analysis for the Heritage Foundation, there is no language that insulates employers from lawsuits, or threats of devastating lawsuits, regardless of what Members of Congress say about their own legislative handiwork. They may not intend to pierce the veil of employer security in this area, but their language simply does carry out that intention.

In principle, most members of Congress want to say that the HMO alone should be subject to litigation if the HMO does a bad, bad thing. The problem, however, is that the HMO is not now, never has been, and never will be independent of the employer in an employer-based health insurance system. So the challenge for the House-Senate conferees has been to draft a rock-solid employer exemption. They have not done that.

The reason all of this is so hard is that Congress is operating within the rigid confines of a tax policy that exclusively favors employer-based health insurance. It locks them into limited policy options. And it locks doctors and patients into limited insurance arrangements. Perhaps a better analogy is the HMO prison. Doctors-and their patients-are in the HMO prison because they support-or ignore-the policy-driven employer- based arrangements that Congress and the IRS created more than 50 years ago. The entire debate about the patients' bill of rights is akin to a debate about the conditions of your imprisonment. Better food and more time in the exercise yard. That's progress, we guess. But then, there's always the better idea, jumping out of the box- jailbreak! But that means escaping the current federal tax treatment of health insurance.

The apparent Senate strategy is to chart a "centrist course" that will appeal to the broader public, but ease any anxieties about creating an unworkable and litigious vehicle that would do serious damage to the employer-based health insurance system. This means that the tough issues have to be handled with a degree of delicacy and finesse that is uncommon in this kind of Congressional fight. For example, liability: There is an enormous popular appeal for persons who have been injured by the decisions of HMO officials to have the right to sue for damages. If the scope of liability is too narrow, it will be seen as a sop to the HMOs and their insensitive pals in the business community. If the scope is too broad, it will be seen as the opening of vast new territory for rapacious lawyers-the proverbial ambulance chasers. So, the Senate is wrestling with the problem of how to extend liability without creating a rash of lawsuits. Not too little, not too much, but, as Goldilocks might say, just right. Well, it's hard to calibrate the language just right. Unintended consequences are the normal consequences in this business. And if you calibrate it just wrong, hell breaks loose and millions of people lose coverage.

The related issue is the scope of the bill. The Senate bill covers 48 million Americans; the House bill covers just about everybody with private health insurance. (Federal government health plans are exempted from these provisions). Where is the basis for compromise? The trial lawyers want it all, and the Clinton Administration is not likely to settle for anything less.

House Members who backed Dingell-Norwood are upset and angry. They notice that the Medicare prescription drug issue is stealing the thunder from the patients' bill of rights. In Norwood's view, the House-Senate conference is "dead." But the issue could arise as part of the traditional year-end deal making, so common in the closing days of a Congress, especially in a highly contentious and close election year. Look for another high-profile intervention by Bill Clinton, who is firmly opposed to consumer choice of health plans but equally committed to expanding litigation. This thing is far from over.

The New Era of "Surplus Liberalism"

The Congressional Budget Office (CBO) says that things are better than we reported here last month (Washington Post 7/19/00). In fact, the federal budget surplus is $400 billion higher than the White House estimated. Subtracting Social Security surpluses, which the Congressional Republicans and Democrats say should stay off-limits, CBO says that over the next 10 years we will have about $2.2 trillion in surpluses. While everybody in Washington is excited about the fact that we are paying more and more money for government, the CBO still cautions that the slightest changes in the economy could dramatically send the numbers in the wrong direction. For example, reports the Post, a CBO analysis projecting just one half of a percentage point less economic growth in 2010 shaves off about $250 billion in the surplus for that year.

Even given the volatility of the federal budget surpluses, serious tax cuts, letting the working stiffs out in Flyover Country keep more of their own hard-earned dollars, look less and less fiscally "irresponsible." The important thing, you see, is to get the rhetoric right. We can't "afford" to let the poor slobs keep more of their own money; "affordability" is a function of flush federal coffers, never a thing to be reckoned on the family budgets of the people. When Washington wonks talk about "revenue loss," they don't mean income declines- the "revenue loss" of productive American workers, who already on average shell out about 40% of their income in federal, state, and local taxes. "Revenue losses" are not acceptable to Washington's establishment-except for those who are working to produce the revenue. Moreover, if you cut taxes, you end up cutting taxes for "the rich." The reason: one- third of American households don't even pay taxes; and "the rich," broadly defined, are the ones who pay most of them. So you get standard leftist protests that tax cuts disproportionately favor the rich; of course they do, because the rich disproportionately pay the taxes in the first place. The Clinton Administration is busily fighting tax cuts-including repeal of the notoriously stupid marriage penalty-a repeal which the President promises to veto. So much for tax cuts.

How about spending? Have it, flaunt it. Got it, spend it. The Washington spending machine-now on automatic pilot- grinds out dollars for government programs at a fever pitch. During the past 10 years, the Post reports, non-defense spending-domestic and entitlement spending-grew at the astonishing rate of 20%, after adjusting for inflation. The era of Big Government is far from over; it is just getting started.

The surplus also feeds the passion for retaining old bad habits. No need to reform a program, if you just got more money to throw at it. The Clinton Administration has persistently, consistently, and steadfastly opposed any serious reforms in Social Security and Medicare, opting instead to keep the old pay- as-you-go and regulatory structures in place, while adding benefits and tinkering around with reimbursement and funding formulas. Sobriety is for tomorrow and for the sober and responsible fools who worry about tomorrow and tomorrow's bills that will have to be paid sometime, someday. This is today. Belly up to the same old bar, and have another.

Medical Mandates: Imposing Their Morality

Think Blue Sky. Imagine Congress gave HCFA responsibility for designing sports cars. And the first models to roll off the assembly line had square wheels. You'd say to yourself, based on wide experience, wow, I knew they could do that. After all, anyone who could devise a physician fee schedule based on the proposition that a person's labor time is the basis for a price that would "mirror the market" is capable of designing square wheels.

If you think that government policy can get really stupid, we're talking industrial strength stupidity, and you think you've seen it all, you are wrong. How about government-mandated contraceptive coverage for Catholic nuns?

Kid you not. On July 11, The Washington D.C. City Council, which has primary responsibility, like most state governments, for regulating health insurance, decided that every health insurance plan serving everybody who is a citizen of the nation's Capitol must pay for contraceptives. Previous language had allowed an exemption for religious institutions. D.C. Council members tried to amend the bill by adding conscience clauses. The first one, for employers who had moral objections to contraception, was defeated on the ground that any business could claim a moral exemption and get around the mandate, which Carol Schwartz, a Republican, said was "a ridiculous" loophole that should be closed. Personal moral objections to government policy are, well, ridiculous. Right?

A second amendment, offered by Charlene Drew Jarvis and Vincent Orange, both Democrats, said that at least religious institutions and employers should be free of the mandate if they have moral reservations about it. No deal. The defeat of the "conscience clauses" was accompanied by a highly inflammatory speech, reminiscent of the Nineteenth Century Know Nothings, by City Councilman Jim Graham. Graham, a Democrat, warned of the dangers of "deferring to Rome" and attacked the Pope for reaffirming Catholic teaching that homosexual practices are immoral. Graham, who is gay and backed by "women's health groups," noted that the Catholic Church opposed condom distributions and would, he feared, also oppose benefits for homosexual partners.

"My problem is surrendering decisions on public health matters to the Church," he said (Wash Post 7/12/00). "I've spent years fighting Church dogma.... We are permitting religious principle to dictate public health. If we are going to set this precedent, what does it mean for domestic partnership?" That settled it. The progressive, modern, and sensitive D.C. City Council voted 13 to 0 in favor of the mandate, happily unburdened by any messy personal conscience stuff. That conscience business, we hear tell, can get you into some real big time trouble with the government, you know.

Democrats and Republicans alike in Congress, exercising oversight over the District of Columbia, have been unimpressed by the quality and the breadth of Councilman Jim Graham's reasoning. Rep. Ernest Istook (R-OK), a Mormon, attacked Councilman Graham's statements as a manifestation of anti-Catholic "bigotry." Graham declares he isn't a bigot, nor is he anti-Catholic. Even if he does sort of sound like one. Likewise, Congressman Thomas Davis (R-VA) argued, rather simply, that Councilman Graham and his supporters should realize that in a free society we all have a right to be concerned about one religious denomination imposing its will on the state. But we should be equally concerned about the state imposing itself on religion and taking away personal and religious freedom. Kind of basic, plain old American wisdom.

On July 20, the House Appropriations Committee approved an amendment to the D.C. Appropriations. The amendment provides that the D.C. contraceptive mandate shall not take effect, nor shall any such insurance rule in the District unless it incorporates a conscience clause.

This fight is just the beginning. With rapid advances in medical science, ethical and moral challenges to doctors and patients will grow. In a society increasingly divided over definitions of right and wrong, in which some have a passion to impose their views on all and take money forcibly to pay for things many find repugnant or morally dubious, strife is inevitable. What's next? Who knows? What would have been inconceivable yesterday is business as usual today.

Once again, one clever little solution to this sort of thing is to change the tax and insurance rules so that individuals and families, whatever their religious or irreligious persuasion, can buy a medical plan of their choice, with the benefits that they want. But there is a terrible price for this. Poor Councilman Graham would have to sit through the awful specter of certain unreconstructed D.C. citizens freely going out there with their own cold cash, with not a hint of shame, and, in broad daylight, mind you, "deferring to Rome." The very thought of it, and in this day and age, too. And, in front of the children!

Robert Moffit is a prominent Washington health policy analyst and Director of Domestic Policy at the Heritage Foundation.