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of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto
Volume 55, No. 9 September 1999
AN ENTITLEMENT IS NOT A RIGHT
The decision in United Seniors v. Shalala (98-
5142), handed down by the U.S. Court of Appeals for the D.C.
Circuit on July 16, 1999, was hailed as a victory for Medicare
patients in a lead editorial (Wall St J 7/29/99) and a
syndicated column by Cal Thomas. But before physicians rush to
contract privately with seniors, without opting out of Medicare,
they need to read the actual decision (posted at
The broad question of whether seniors have the
right to spend their own money for the medical treatment
of their choice has yet to be adjudicated by any court, despite
this case and its predecessors.
AAPS first litigated the issue in AAPS v. Weinberger, which challenged the Professional Standards Review
Organization (PSRO). In 1975, U.S. Solicitor General Robert Bork
wrote: "Patients whose medical care is provided by public funds
have no constitutional right to whatever care [their physicians]
using `the highest standards of medical practice'...may `judge
necessary'...or to obtain that care "from a physician *** of
their choice" (see AAPS News Jan 1998).
Here, the federal government asserted the power to regulate
that which it funds. The next question: what if the government
provides no part of the funding for a service?
Relevant but nondispositive cases include NY State
Ophthalmologic Society v. Bowen and Stewart v.
Sullivan (see index to AAPS News on our web site). A
cogent analysis of the case law, the meaning of § 4507 of the
Balanced Budget Act, and "HCFA's phantom policy on private
contracting" is provided by John S. Hoff in an important new
book, Medicare Private Contracting: Paternalism or
Autonomy, available from the AEI Press (800-269-6267). (Mr.
Hoff was also lead attorney on the brief filed by amici curiae in
As amici in United Seniors observed, the right to
autonomous decision making in obtaining medical care is "so
fundamental that it has not been previously questioned, nor has
it required articulation." Moreover, "the right to own property
would have little meaning if one could be prohibited from using
it." Unfortunately, the Court did not consider these issues,
Critical to our analysis is that the injury
plaintiffs assert is to their ability to purchase
services for which Medicare will not itself
pay, thus rendering them unable to obtain those
services on any terms.... Plaintiffs make
clear at oral argument, however, that they disavow
any claim to a constitutional right to pay their
doctors more than the Medicare fee limits for services
they can obtain through Medicare [emphasis
In other words, plaintiffs tested only the right to buy
noncovered services: either those categorically
excluded, such as cosmetic surgery or experimental treatments, or
those denied because Medicare viewed them as unnecessary. For
necessary or life-saving services, they, in effect, declared
themselves ready to accept "any terms": presumably, even lengthy
waits, outdated procedures, or second-rate surgeons, if these
resulted from price controls or oppressive regulations.
The Court relied on the Secretary's interpretation of §4507:
"The Secretary stresses...that section 4507...does not impose
restrictions on agreements to provide services for which Medicare
would not pay [emphasis in original]...."
The Court also accepted the defendant's reassurances that
HCFA did not intend to sanction physicians who submitted Advanced
Beneficiary Notices (ABNs) with claims for services denied
because they did not meet "Medicare's particular and often unique
coverage requirements." But Judges warned:
It should not be missed...that HCFA exempts from
this note of encouragement those services not "in
accordance with accepted standards of medical
care....Needless to say, billing patients for
unwarranted procedures may well be subject to
Plaintiffs asked the Court to declare §4507
unconstitutional. Mr. Hoff explains: although §4507 is "an
exception to nothing" (there being no statutory prohibition on
private contracting), physicians are "fearful of HCFA's
pronouncements and potential enforcement" and hence will not
contract privately unless they fall under the section's
protection. The Court declined to rule on this issue:
We affirm the grant of summary judgment without
reaching the constitutional questions because the
Secretary's recently-clarified interpretation of
section 4507, to which we must defer, eliminates the
injury that is the basis of plaintiffs' constitutional
In this case as in earlier ones, plaintiffs conceded the
issue of private purchase of covered services at the
market price. Thus, Judges did not have to reach
constitutionality, which might come perilously close to Medicare
itself. As the Court stated during oral argument: "It may be
perfectly true that Medicare is unconstitutional. Okay? But
that's not challenged...."
Mr. Hoff writes: "HCFA dodged and weaved to avoid a head-on
attack on its policy. The benefit is that the assurances, given
sporadically and informally, are now essentially adopted into law
by the court decision. This does not prevent HCFA from changing
its mind...or, as the court backhandedly recognizes, from
prosecuting despite the assurances....The doctor could appeal,
but that is not much comfort."
As the decision illustrates, Medicare is an
entitlement, and an entitlement is not a right. Rather,
it is a privileged claim on resources earned by someone else and
controlled by the government. In HCFA's view, to exercise this
claim (whether as a physician or a patient) one must
renounce one's right to the liberty to use one's own
property to sustain one's own life.
AAPS Members Take Action, Make News
Dr. Huntoon Greets Hillary in Jamestown. When Hillary
Rodham Clinton came to town on her "listening tour," AAPS
President-elect Lawrence Huntoon, M.D., decided to give her
something to listen to. For two hours, he held up a 40x60 inch
sign reading "AAPS v. Clinton. Pay Up. Go Home." He also
distributed flyers about the AAPS lawsuit.
Only carefully selected persons were allowed to approach the
First Lady (Buffalo News 8/5/99). Dr. Huntoon was among
those herded into a distant cordoned-off area; police were not
happy when he was stopped for media interviews along the way. He
was also interviewed by the Secret Service.
"The Clintons are not people who have respect for the law,"
Dr. Huntoon said (Post-Journal 8/5/99). "It's clear from
their record in office. I don't think people who don't have a
basic respect for the law should be representing us."
Sabrin Supporters Cheer AAPS in New Jersey. Alieta Eck,
M.D., who is campaign coordinator for Murray Sabrin's campaign in
Somerset County, NJ, introduced AAPS to supporters as Sabrin
announced his candidacy. Cheers for the group that sued over the
illegal operations of Hillary Clinton's Health Care Task Force
were deafening. Dr. Eck's letter concerning Sabrin's challenge to
Gov. Christine Todd Whitman for the U.S. Senate was sent to
AAPS News subscribers at the campaign's expense. AAPS does
not release the mailing list; occasional PAC mailings on behalf
of a candidate strongly supportive of freedom in medicine are
sent from our Tucson mailing facility. More information about
Professor Sabrin is available at www.murraysabrin.com.
SimpleCare Featured on NBC News. On Sunday, August 7,
NBC News featured AAPS members Vern Cherewatenko, M.D., and David
MacDonald, D.O. (who will speak at our annual meeting). The
physicians advise patients to buy low-cost insurance for
catastrophic illnesses, and let SimpleCare do the rest. (See
AAPS News Aug 1999 and www.simplecare.com.)
Dean Rosen commented that the SimpleCare discounted charge
of $35 is still higher than a $10 co-pay. "Huh?" said Greg
Scandlen. "Did Rosen forget about the premium the
patient pays to get the $10 co-pay?"
Dr. Garcia Makes House Calls. Tucson newspapers
recently have featured mug shots and highly critical coverage of
a number of physicians. But Hector Garcia, M.D., an AAPS member
since 1975, broke the trend. Three full-color pages in the
Tucson Citizen (8/4/99) were devoted to describing a day
in the life of a real, non-HMO doctor. "Who are they?" he asks
about managed care. "Your problems are my problems when you
confide them in me." Dr. Garcia may retire at age 100.
AAPS Calls for
Moratorium on Vaccine
In July, AAPS wrote to
HHS Secretary Donna
Shalala, requesting her to
ask state health
departments to place an
immediate moratorium on
"Although we recognize that vaccines, in the past, have
prevented many serious illnesses, it is simply a fact that every
insurance policy has a premium. Every medical intervention
carries both risks and potential benefits. The risk:benefit
calculation is different for each individual patient, and can
only be made by the patient (or the patient's guardian) in
consultation with the attending physician.
"It is the right of every patient to refuse a medical
intervention, even if recommended by the attending physician, and
it is the duty of the physician to advise according to his or her
own best judgment. Informed consent is a prerequisite for ethical
medical treatment (or for research), as is internationally
recognized in the Nuremberg Code...."
AAPS also wrote to Harold Margolis, M.D., Chief, Hepatitis
Branch, CDC, requesting details concerning the initial safety
testing in children and ongoing studies on possible neurological
and other complications of hepatitis B vaccine.
Methods used to implement universal hepatitis B vaccine in
newborns are questionable. Burton Waisbren, M.D., states that
vigorous peer review may have been circumvented by publishing
"invited" articles from drug company-sponsored seminars in
journal supplements. Also, CDC officials made personal visits to
state boards of health, Dr. Waisbren states.
One potential method of persuasion is to tie federal welfare
funding to immunization compliance.
All Kids Count, a Robert Wood Johnson Foundation project to
establish immunization registries in every state, conceivably
might play a role. The program emphasizes enrolling newborns, and
hepatitis B is the only vaccine administered to newborns. "People
really are seeing [registries] as the way to institutionalize
immunizing our real young kids," stated William Watkins,
executive director of the Decatur-based All Kids Count
organization (BNA's HCPR 2/15/99).
AAPS testimony has sparked numerous inquiries (including
many newspapers and radio stations in Connecticut, and school
district officials in Philadelphia). And policy is beginning to
change. All but two of Connecticut's birthing hospitals have
suspended routine hepatitis B vaccines. A Virginia parent (who
was notified of the vaccines his child received only after the
fact) told AAPS that his state has also suspended hepatitis B
vaccines in newborns of uninfected mothers. In a surprise
statement by the Surgeon General-almost as a footnote in a larger
announcement on halting the use of thimerosal as a vaccine
preservative-federal policy now deems the vaccine appropriate at
birth only if the mother is infected or of unknown status.
"Federal officials did not acknowledge that recent criticism from
Congress, parents, and doctors played any role in the policy
change," wrote John Hanchette of Gannett News Service.
www.house.gov/reform/hearings for testimony from the Aug.
3 hearing before the House Committee on Government Reform and
www.aapsonline.org for the AAPS written statement
distributed at the hearing.
Oct. 13-16. 56th annual meeting, Coeur D'Alene, ID.
Oct. 25-28, 2000. 57th annual meeting, St. Louis.
What Is a Covered Service?
Now that the court decision in United Seniors
augments HCFA's stated policy that noncovered or unnecessary
services may be rendered at the price determined by mutual
agreement of patient and physician, more questions arise.
What if a physician provides a service that he believes will
be denied, files an ABN, and finds that Medicare "covers" the
service, allowing $5.00 in reimbursement when the market value is
$500? Presumably, all HCFA rules apply. Note that proposed
Medicare reforms expand the coverage for screening or preventive
services (e.g., the PSA, mentioned prominently in the case).
Expanding coverage expands HCFA's power.
What about a service that would be noncovered by itself, but
which HCFA insists on bundling with another service?
The unbundling of two covered services performed
during the same encounter, such as acne surgery and lesion
surgery or angioplasty and angiography, is the subject of the
more than 1,000 secret "black box edits" scheduled to go into
effect July 1 (Part B News 7/5/99). Reimbursement for
claims containing these combinations is denied without
Billing the patient for a categorically noncovered
service provided during the same encounter as a covered one may
be cause not just for claim denial but for fraud prosecution.
AAPS is aware of one eye surgeon who was threatened with criminal
indictment for billing patients for cosmetic procedures performed
along with an indicated covered procedure.
Then there is the Strub and Black Formal Mental Status
Examination. Lawrence Huntoon, M.D., notes that there is no
appropriate designation in the CPT manual for this lengthy
procedure. Kathy Sheehan of Upstate Medicare informed him that
"formal mental status examinations billed under procedure code
95999 as `stand alone' procedures are not covered." However, Pat
Samson of Upstate Medicare told him that he was not allowed to
bill for it privately: "Your assumption that this procedure is
`non-covered' is inaccurate and Medicare would have jurisdiction
over it and a claim should be filed using an evaluation and
management procedure code."
HCFA Answers a Letter
On Sept 25, 1998, AAPS asked Nancy Ann Min DeParle a number
of questions related to the 1997 E&M Documentation Guidelines. On
July 19, 1999, we received a reply. Both are posted at www.aapsonline.org under
Briefly, the 1997 guidelines were not withdrawn.
And home visits to Medicare beneficiaries who do not meet the
definition of homebound are not noncovered services. Codes are
suggested and queries about them are referred to the AMA.
E&M Codes: The Demise of Value
Some historical gems from a detailed memorandum by Robert
Nirschl, M.D., an orthopedic surgeon:
Until 1991, a relatively simple Medicare billing system was
in place. Levels of evaluation and management (E&M) services
required only 4 pages in the CPT manual. When the RBRVS was in
place, HCFA-in collaboration with the AMA- introduced new,
confusing guidelines taking 44 pages in the 1992 CPT code book.
An expanding relationship developed between HCFA, the AMA, and
the AMA CPT editorial panel. In 1997, the E&M codes became still
more complex, now taking 54 pages. In spite of the resounding
rejection of this approach by most physicians, the AMA and HCFA
determined to press on. In Sept 1998, the AMA board asked the AMA
CPT editorial panel to resume consultations with HCFA.
The original purpose of the medical record was to enhance
patient care by providing reminders useful to attending
physicians. In the medical liability era, the record became a
legal document and the precedent of "if it wasn't documented, it
wasn't done" was established. In the 1960s, with the expansion of
health insurance, the record also became a billing document and
for all practical purposes a public document.
Previously, physicians coded on a qualitative basis and
probably undercoded more often than not. The E&M quantitative
system defines safe harbors and thus a route for the legal
expansion of services, with the probable result of increased
billing for services of minimal medical value.
Dr. Nirschl concludes that regulation has harmed medical
care and increased costs. Pending serious reform of a seriously
flawed system, Dr. Nirschl advocates a return to a pre-1992
qualitative system for coding physician services.
Wisconsin Doctors Must Report All Visits to State
Wisconsin physicians who violate a recently passed statute
requiring data on all out-patient visits to be submitted to the
state may be imprisoned for 9 months, fined $10,000, or both.
According to Jack Lockhart, M.D., President of the State Medical
Society of Wisconsin, the Society shares many of the AAPS fears
about government collection of patient data, "but given our
political climate, repeal was never an option." The society also
believes consumers may derive many benefits from a "thoughtfully
crafted program." The Society negotiated a "revised" program
allowing anonymous data to be collected.
"We do know from statements by state employees that they
ultimately may seek to obtain much more information about
patients than they will now get," writes Dr. Lockhart.
The Society argued to the legislature that physicians
considered submission of patient-identifying data to violate
their Hippocratic Oath. At least one prominent medical ethicist
in Wisconsin supported this position. "However, in our working to
improve this program we have never advocated, nor even suggested,
to our members that they refuse to comply with the law," stated
Samuel Nigro, M.D., of Cleveland Heights, OH, writes that
when he was a resident in psychiatry, the late Dr. Douglas Bond,
Dean of Case Western Reserve School of Medicine, was subpoenaed
to bring his records and testify at a court hearing. "He, of
course, testified, carrying with him a folder with papers of the
patient's medical record. They did not require him to turn over
the record, because he protested such was a violation of
confidentiality. He informed us that he would have turned it over
to the court if that was the judge's ruling, but the folder
contained nothing but blank pages."
"We have come a long way since the days when medicine
was a profession," concludes Dr. Nigro. "Now it seems
that everybody wants a ... piece of paper. That we have sunk so
low is testimony to nothing but the outrageous leadership the
profession has had during these past three decades."
"[L]aws are made for men of ordinary understanding and
should therefore be construed by the ... rules of common sense;
and their meaning is not to be sought for in metaphysical
subtleties which may make anything mean everything or nothing at
Thomas Jefferson, letter to William Johnson
On Nonparticipation. From a letter to Ms. Pat Samson,
Support Specialist, Program Education & Training, Upstate
Medicare: As for your assertion that "the only privilege" my
nonparticipation status gives me is that I am not mandated to
accept assignment from the Medicare program, you missed the mark
by a wide margin. [This] status gives me the great privilege of
knowing that I am not participating in a fraudulent, criminal,
immoral program like the Medicare program (private citizens who
conduct and promote such Ponzi schemes are thrown in jail), and
that I work for my patients, not for the government.
That knowledge allows me to sleep well at night and is thus worth
far more to me than the "privilege" of not having to accept
government money on each and every patient I see. I, along with
many other physicians, see such acceptance as a liability in this
age of HCFA "fraud" witch hunts.
Lawrence R. Huntoon, M.D., Ph.D., Jamestown, NY
A Landmark Day. After having recently "opted out" of
the Medicare system entirely, I experienced the thrill of
treating my first Medicare patient by way of private contracting.
I am an orthopedic surgeon. I provided a 45-minute, comprehensive
office evaluation and consultation service, a joint injection,
and prescriptions. The patient was quite pleased with the service
and wrote out her check to me afterwards as if it was the most
natural thing in the world....I am keeping a copy of the
patient's check in my memorabilia file, as a symbol of freedom
and a reminder that there are alternatives to government
servitude. Never again will I feel agitated when rendering my
services by thoughts of how unfairly the patient's "insurance"
carrier (the government) will treat me after I send in the bill.
Direct, face-to-face dealings between patient and physician,
both medical and financial, are the only way to salvage a medical
system that has run amok under the influence of the third-party
payment system. We have converted our office employee medical
benefit plan to medical savings accounts. Why doesn't every
physician? If physicians do not lead the way on MSAs, who will?
Alexander Sapega, M.D., King of Prussia, PA
Another Doctor Shrugs. I came to this continent three
decades ago with the high hopes of youth, only to discover people
who are "unaware that they are unaware," to quote Jim Davidson.
Such people see the only and automatic solution, "the government
should do something about it." Excluding AAPS, I have not found
my colleagues to be an exception.
I am by choice and training a pediatrician, but after 20
years I realized I had three options: to continue sacrificing
myself for my patients with little but hostility in return; to
sacrifice my patients...; or to quit. I chose the last. I have
doubled my income, with a fraction of the effort....
As to vaccines, I am personally convinced that vaccines are
a tremendous accomplishment and are beneficial....There are risks
and possible hazards in the use of vaccines, as is the case with
all other actions that we may take. Every person or parent should
carefully consider the risks and benefits prior to his free
choice....Since statists cannot possibly allow this, dishonesty
and disinformation inevitably result.
Jerry J. Krumlik, M.D., Yakima, WA
Medicare Appeals. From a letter to Georginia Aguilar,
Medicare Hearing Officer, Transamerica Occidental Life Insurance
Company, 3/9/99, concerning a 2-inch thick folder of pending
denials and reviews dating as far back as 1/98:
I think you will agree that it is onerous for a doctor to
have to constantly ask for hearings and reviews again and again
because Transamerica loses records, constantly changes hearing
officers, or simply ignores requests....The carrier Hearing
Officer is not qualified to render decisions regarding medical
necessity or level of documentation....I am therefore asking you
to reopen the hearing. My documentation is more than adequate and
is more detailed than any other oncologist's documentation that I
have ever seen.
Linda W. Wilson, M.D., Culver City, CA
Never Opted In. When Medi-Cal started in California, I
accepted eligible and registered patients only as private
patients and treated Medi-Cal just as any other insurer. Patients
paid at the time of the visit; I submitted the claims; when
reimbursement came, I signed it over to the patient. The
Sacramento bureaucracy cried foul. I said that by federal law,
Medi-Cal had to be designed for the best interests of the
patients and taxpayers, and that all parties were better served
by my program than by the state's. It took about a month for them
to initiate proceedings to "remove" me from a program that I had
never joined. I told the judge I was discontinuing my pilot
program, having made my point.
Thayer Smith, M.D., Downey, CA
Physicians Still Fear to Treat Pain Effectively. A
physician who recently had his practice ruined after 25 years and
excellent credentials said: "It will be a cold day in [the
Inferno] before I am willing to extend myself to manage any of my
patients who have chronic pain. Sadly, for the people of this
county, there are few physicians still willing to treat chronic
pain." The patients' problem is little better despite physicians
realizing the importance of narcotics in intractable pain,
because the regulators are just as destructive as before.
Robert Scovner, M.D., Frederick, MD
Legislative AlertThe State of the Debate on the
Patient Bill of Rights
In the Senate. In September, the increasingly bitter
Congressional fight on the patients' "bill of rights" begins all
over again. As Members of Congress return home to their
districts, this is the biggest piece of unfinished Congressional
The Senate has passed the Republican version, which provides
a system of appeals for decisions made by managed care officials.
The key difference from Democratic bill, championed by Edward
Kennedy (D-MA), is that it does not change the ERISA law allowing
patients to sue for injuries resulting from managed care
decisions. The terms of the Democratic version of the bill
would apply to all Americans covered by insurance, estimated to
be 161 million. But the grievance and external review provisions
of the Senate Republican bill would apply only to the 48 million
Americans who are enrolled in self-insured plans covered under
the ERISA laws. Calling the Senate Republican bill a sham,
President Clinton has vowed to veto it.
The White House knows that the managed care mess is a good
political issue, and it has the bonus of furthering the nonstop
effort to expand federal regulatory control over American
medicine. It must not be forgotten for a nanosecond that this has
been the central White House interest since it launched its
major-temporarily ill-fated-program for universal government
control in 1993.
In the face of withering White House criticism, the Senate
Republicans did mount an effective and united opposition to the
Administration-backed bill. It s easy to understand why. Health
policy is one of those areas where the iron law of unintended
consequences goes berserk. There are now 43 million Americans who
do not have medical insurance coverage. The Democratic bill would
increase costs by about 6% ($72 billion over 5 years), according
to the Congressional Budget Office (CBO). For every 1% increase
in premiums, approximately 200,000 Americans lose their medical
coverage. A related concern is the impact of mandates and
litigation on employers and their willingness to offer medical
coverage. This legislation promises literally an explosion of
litigation. Lawyers would do a lot better than doctors under this
bill. If they are going to be faced with yet another ream of
costly mandates, or worse, if their plans are going to be subject
to suits, or they themselves are subject to suits, they may very
well drop coverage altogether. The Democratic bill would also
duplicate what a lot of states are doing: 37 states, for example,
have passed mandates for broader ob/gyn coverage, and a 2-day
hospital stay for mastectomies is mandated in 19 states.
In the House. The House of Representatives, which was
supposed to vote on its version of the legislation before the
August recess, failed to do so. Speaker Dennis Hastert (R-IL) has
been unable to forge a consensus because the leading doctors in
the House-Reps. Greg Ganske (R-IA), Charles Norwood (R-GA), and
Tom Coburn (R-OK)-have been dissatisfied with the leadership
draft bill. Most recently, Norwood signalled his intent to forge
a compromise bill with Rep. John Dingell (D-MI), one of the
leading proponents of compulsory government health insurance.
Rep. Dingell's negotiations with Tom Bliley (R-VA), chairman of
the House Commerce Committee, failed because of Dingell's
dissatisfaction with the Republican liability provisions.
The House Republican situation is unenviable. Unlike the
Senate Republicans, who demonstrated remarkable political unity
in the face of the floor challenges by Senator Ted Kennedy and
others, the House Republicans have no such unity or partisan
discipline. Recall that Speaker Hastert is working with a 5-vote
partisan margin. Any defections among his troops spells political
defeat. Rep. Coburn, an obstetrician, has said that the two big
items for him are "an external appeals process with teeth," and
the right of doctors, rather than insurance companies, to define
"medical necessity." Without these two provisions, it s curtains
for the House Leadership bill. Coburn has told the press he can
bring 25 to 30 House Republicans with him. So, the revolt of the
doctors has thrown the Republican leadership into a policy
tailspin, as they are desperate to find some way to thread the
legislative needle to avoid what many Capitol Hill observers see
as a political disaster looming on the horizon. There are nine
physicians and four dentists in the House of Representatives, and
they are clearly driving the debate. One exception is Rep. Ernie
Fletcher (R-KY), a family physician, who thinks his medical
colleagues have been promoting wrong-headed legislation- chock
full of government mandates and regulations-that will simply make
the current situation worse.
A Fresh Start? In the waning hours of the Congressional
session, Reps. Coburn and John Shadegg (R-AZ) announced yet
another effort to forge a compromise measure. This would, in
fact, be two companion bills. One would deal with the issue of
patient protection in managed care. The other would focus on
expanding choice and access, and dealing with the problems of the
uninsured. In an August 6 statement to the press, Speaker Dennis
Hastert announced his support for the proposal.
The key elements of the Coburn-Shadegg proposal are:
- Medical professionals will make decisions about medical
necessity. Any time that a patient is denied coverage,
that patient will have access to a timely independent
appeal. Doctors, not HMO officials, will have the final
- Patients will have the right to choose their own doctor,
whether or not that doctor is part of an HMO, and they will
also have a right to access to the "nearest" emergency room
when they are in need of care.
- Patients will have a right to sue HMOs if they make
decisions injurious to the patient.
- Women and children will have a right to access to
obstetricians and gynecologists without going through a
"gatekeeper" first; and children will have access to
pediatricians as primary care physicians.
- Patients will have increased medical choices through
expanded medical savings accounts and tax deductions.
Coburn and Shadegg are also proposing to help the uninsured
through provisions not yet developed. (It is well known that Rep.
Shadegg, like House Majority leader Dick Armey (R-TX), is a keen
proponent of tax relief to folks who do not get health insurance
through the place of work.)
An Intellectual Mess. This clearly describes the
Congressional debate, regardless of one's opinion of specific
provisions in the various versions of "patient protection"
legislation. Consider the House Republicans. Their recent
political turmoil is rooted in a fundamental confusion,
demonstrable ever since 1994, and painfully evident in the vast
federal regulatory expansions that they have enacted-against
their stated antiregulatory agenda-with the Health Insurance
Portability and Accountability act of 1996 (the Kassebaum-Kennedy
bill) and the notorious Balanced Budget Act of 1997, a leftwing
policy analyst s dream come true with its dramatic expansions of
HCFA s authority. From the legislative record, quite distinct
from their almost libertarian rhetoric on the subject, it is not
at all clear what agenda they want to impose on Americans. Then,
again, Americans themselves don t seem to register a consensus on
the topic, except they know what they are emphatically against:
the Clinton Plan and heartless HMOs. Consider also the
situation in the Senate. The Senate "liberals" say they want
doctors, rather than insurance administrators, to make the key
decisions about what is "medically necessary" for patients: a
perfectly reasonable, if unoriginal, idea, and an indication of
precisely how crazy the current employer-based system has become.
But Senate liberals also want the federal government to decide
the kind and duration of certain medical treatments-such as
mastectomies-that will be mandatory in private health insurance
packages. So much for medical freedom.
And nothing beats Senate Republicans for a public paradox.
These supposed champions of ancient wisdom and morality have
ratified, if only in a backhanded parliamentary way, the "modern"
position that third-party administrators should have priority in
determining what medical treatments are necessary. Whether they
realize it or not, they have put the Senate in a position of
repudiating the central ethical tenets of the ancient Hippocratic
Oath, which holds the patient-physician relationship to be
primary and sacred. So much for traditional ethics. Both sides
are clearly confused, at least on the policy issues. Both are
looking to score political points. Both are demonstrating how
fundamentally inept official Washington has become. And, of
course, both are wrong. The Senate Democrats are exactly wrong if
they think that American medicine will improve if we have more
people suing each other, or if we impose yet another layer of
costly and counterproductive regulation. The Senate Republicans
have got it exactly wrong if they think that we can long maintain
tax policy that favors a monopoly of employer-based health
Then there is the Clinton Administration. Masters of quick-
change artistry. Faster than you can define the word "is," the
Clinton team has managed to change sides with bravado -giving
chutzpah a new meaning-on the matter of managed care.
And nobody-especially the press-seems to be noticing. They are
good; really, really good. Recall when managed care was the magic
bullet of health care reformers in the early 1990s? Indeed, the
Clinton Administration s major 1993 health care proposal-the very
centerpiece of its domestic policy agenda-was designed to set up
managed-care networks all over the country, and control costs by
establishing fixed budgets. But with characteristic political
aplomb, Clinton is jumping in front of the anti-managed care
parade-and conceding in fact, if not in principle, that his
central prescription for "health care delivery" was, well,
perhaps not the best idea after all.
If the regulatory juggernaut continues in September, what
Congress and the Clinton Administration will be doing is not
reform. Rather, they will be locking both doctors and patients
into a highly restrictive system. And the doctors, now so zealous
about regulating insurance companies, will be simply negotiating
the terms of their incarceration.
The chief effect of both approaches, Republican and
Democratic, is to perpetuate a system in which access to medical
insurance is tied to employment, with no patient choice of
benefits, and no rational economic incentives. In a remarkable
response to Rep. Tom Coburn's heartrending recitation of his own
case of a pregnant young woman being denied coverage for an
antiserum to protect her baby against the consequences of chicken
pox virus, Karen Ignani, President of the American Association of
Health Plans, the top trade association for managed care plans,
said that while the HMO's refusal to pay for the injection may
seem "heartless," the problem was "probably created by an
employer s decision not to purchase that benefit" (The
Washington Post 7/27/99).
Of course, the current economic incentives-encouraged by
government policy-are crazy. In what other sector of the economy
could professionals, as a class, be paid more money for rendering
A Curious Exception. The Congress, as nobody in the press
seems to have noticed, is exempting public insurance programs
that they themselves run (Medicare and Medicaid) from the various
patients' bill of rights requirements. For example, if
Congress were to apply the provisions of S.6, backed by the
Clinton Administration, Medicare patients would be able to sue
the Medicare bureaucracy not simply for recovery of the cost of
the benefit, but also for damages for injury from denials of
Medicare coverage-and to take the damages right out of the
personnel budget of the Medicare bureaucracy. Lots of Medicare
claims are denied each year. It would be open season for the
trial lawyers, Clinton's most dependable political allies. We re
talking Fat of the Land here. Just curious.
Likewise, if Congress were to apply these bills to
federal programs, medical necessity would be determined by
doctors rather than federal officials or Medicare
contractors. Many Medicare are denied for the very same
reason that managed care companies deny claims. Senator Kennedy
has not lost his cool on the Senate floor on that one. Moreover,
if we were to speed review of claims denials, why should we
tolerate the hundreds of days required for elderly patients to
wade their way through Medicare s complicated appeals
Needed: A New Policy. The only answer to the current
problems of cost and access and quality is to open up the system
to real patient choice. Instead of suing, you should be able
to fire your poorly performing insurance company, without
punitive tax consequences.
This will only happen if Congress does away with the
monopoly now enjoyed by employer-provided health insurance.
If you don t like your health plan offered by your employer,
Congress says tough luck. It is not forbidden to go outside of
the employer s plan and buy an independent policy, but it is
official U.S. policy to punish you for doing so. You can only buy
such a policy with after-tax dollars, adding perhaps 35% to the
cost of a premium. Worse, if you buy on the individual market,
you also pay all of the administrative costs of the individual
marketing of plans, which can be hideously expensive. Worse, if
you live in a state like Maryland or California, you are cursed
with state legislators who like to play doctor, and who enact all
sorts of mandates.
Unless Congress makes fundamental changes to restore a free
market in medical insurance, this debate will terminate only in
some form of national health insurance.
Robert Moffit is a prominent Washington health policy
analyst and Director of Domestic Policy at the Heritage