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

of the
to the
Subcommittee on Courts and Intellectual Property
of the Committee on the Judiciary
U.S. House of Representatives
Submitted by Jane Orient, M.D.
March 16, 1999

My name is Jane Orient, M.D. I am a practicing internist from Tucson, Arizona, and serve as the Executive Director of the Association of American Physicians & Surgeons ("AAPS").

AAPS is a nationwide organization of physicians that is devoted to defending the traditional patient-physician relationship. AAPS eschews all business revenue, so that membership dues constitute virtually all of AAPS's funding. AAPS frequently testifies before Congress and has succeeded in landmark litigation including AAPS v. Clinton (concerning the Health Care Task Force) and U.S. v. Rutgard (concerning Medicare prosecutions).

AAPS respectfully submits this testimony to urge this Subcommittee to reject H.R. 354 due to its adverse impact on medical care. AAPS regrets that this Subcommittee did not view this patient issue to be sufficiently important to allow my live testimony.

The medical treatment of a patient is often dependent on the quality of the data available about such patient. We have neither the time nor the resources to conduct new tests every time a patient needs treatment. Both cost and the need for prompt treatment preclude the duplication of medical tests. Patients and their physicians must be able to obtain efficient access to their medical records in order to ensure high quality medical care.

The medical data market is growing by a billion dollars per year. It entails data about patient conditions and data about treatments rendered. It includes profiles of physicians and coding systems that physicians must use to be paid for services rendered. It encompasses prescription data and hospital usage data. All of this data is important to patients, and to their physicians in rendering treatment.

Certain special interests would like to claim exclusive rights to this valuable data. They would like to sell it at enormous profits. They would like to exclude their competitors from accessing this data.

Unfortunately, the AMA is one of those special interests. Now dominated by business activities, the AMA would like to sell its data at enormous profits and limit competition. The AMA thereby adds unnecessary costs to physicians and patients, who bear the charges. Physicians must bear the costs of royalties to the AMA for manuals, software, and seminars for the Current Procedure Terminology (CPT) system, which is imposed on physicians by force of law.

Yet H.R. 354 does exactly that. It creates a new federal right of HMOs and other corporations to exclude patients and their physicians from medical records. It creates a new federal right of the AMA to exclude physicians and others from medical coding systems necessary to comply with applicable law.

H.R. 354 Section 1402 expressly states that "[a]ny person who extracts ? all or a substantial part, measured quantitatively or qualitatively, of a collection of information gathered, organized, or maintained by another person ? so as to cause harm to the actual or potential market of that other person" shall be subject to severe criminal and civil penalties. As a practicing physician, I can assure you that physicians "extract ? all or a substantial part" of medical data dozens of times each day, to the harm of the potential market of managed care organizations. Often physicians must extract all of the medical records of a patient before providing significant treatment.

Moreover, H.R. 354 Section 1405(b) preempts the state laws that ensure legitimate access by patients and their physicians to their medical records. State laws governing and allowing extraction of such medical records are omitted from the lengthy list of state laws that are not preempted. Section 1405(b) does refrain from preempting "access to public documents," but fails to add "access to medical records" as well.

The result of these Sections will be a race to build medical databases in order to exclude others from those databases. The corporation that controls the patient data will control the patient, and patients' ability to select their own physician will be far more limited than it is now. The widespread frustration that patients express about managed care, on Election Day and otherwise, will become far worse under H.R. 354.


This absurd result, embodied in H.R. 354, was flatly rejected by the federal Court of Appeals for the Ninth Circuit in August 1997 (Practice Management Info. Corp. v. AMA). That appellate court ruled that the AMA's demand for royalties for a database that HCFA exclusively requires by law constituted "misuse" by the AMA of its rights.

Lo and behold, two months later this bill was initially introduced as a legislative fix for the AMA, and six months later the AMA was providing the key testimony in support of this bill.

The AMA conveniently omitted from its testimony how the Court had harshly criticized its conduct, and denied the AMA enforcement rights. Undaunted, the AMA insisted in its testimony on a further benefit in H.R. 354 to maximize its control over the database. Initially the bill only applied to extractions of a "substantial" portion of the database. The AMA demanded and obtained dilution of this requirement to include "qualitative or quantitative" substantiality, thereby leaving open the possibility that extraction of only a few important records would be criminalized. With the penalty of 5 years in prison terrorizing patients and their physicians, no one will dare take a chance in extracting any data whatsoever.

Other misinformation about H.R. 354 is the claim that it does not create ownership rights in databases. It does create the right to exclude access by others, which is considered the most important right of ownership. This bill would allow HMOs and other corporations to exclude physicians from accessing medical records necessary to treat their patients. This bill would allow the AMA to exclude physicians from accessing Medicare codes necessary to comply with federal law. This bill would impose a prison sentence of 5 years and a fine of $250,000 if any physician trespassed upon this new federal right. Any hairsplitting distinction between this federal right to exclude and legal ownership is disingenuous.

The introduction of this bill by Congressman Coble expressly referenced medical information, and yet some claim that this bill does not affect medical data. But the bill carefully excludes many types of data from its scope, from telephone directories to stock quotes to news reports. Expressio unius est exclusio alterius. Medical data should be expressly excluded along with the others.

In conclusion, Mr. Chairman, I am grateful for this opportunity to explain the adverse impact of H.R. 354 on medical care. Voters' concerns about their medical care have resounded loud and clear in recent elections, beginning in 1994. This Subcommittee should reject H.R. 354 as a special interest bill that would be detrimental to the public's access to quality medical care.