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Association of American Physicians and Surgeons, Inc.
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Gervais Eye Clinic Robert P. Gervais, M.D.
215 S. Power Rd., Suite 112
Mesa, Arizona 85206-5236
(480) 981-1345

Statement to the Secretary's Advisory Committee on Regulatory Reform, public hearing in Phoenix, AZ, March 18, 2002

First, the facts:

Medicare shut down the surgi-center on December 26, 1999.

All violations were corrected by changing words on paper.

The cost of the consultants required to effect the changes was approximately $28,000.

The surgi-center was shut down for a period of 17 months because Medicare would not do a reinspection.

The effect on the physician was that he was unable to earn any net income from his practice for a period of 24 months.

Patients were deprived of access to a treatment facility offering highly personalized care. The alternative is a large-volume facility utilizing optometrists for all pre-op and post-op care, or treatment in a hospital at much higher cost to Medicare.

The power of Medicare bureaucrats to close down cost-effective small facilities on an arbitrary and capricious basis, with no accountability, threatens access of patients to prompt, personal treatment, and removes a source of healthy competition on both price and quality from the marketplace. It deters physicians from making such investments in the future, and prospective physicians from entering a medical career.

Permitting such actions is rational only if the intention of Medicare is to contain expenditures during the coming demographic explosion of Medicare beneficiaries by limiting the supply of medical services.


  1. Once a facility is licensed, it cannot be closed or excluded from Medicare simply because of a violation of a regulation that was not in effect at the time of approval, or because of a change in the interpretation of a regulation or enforcement policy. Medicare payments may be withheld only if:

    a. The facility receives instructions in plain English as to what changes are required, such that a high-priced consultant is not needed simply to understand the requirement;

    b. These requirements are applied consistently to all similar facilities;

    c. A reasonable period of time is permitted to come into compliance, say several months at a minimum, depending on the amount of work that is required;

    d. Reinspection is completed promptly, within 10 days of a request, and any remaining failures are again stated in writing, in plain English, so that there will be no ambiguity about what the facility must do to reach compliance;

    e. The agency is able to produce documentation of improved patient outcomes resulting from the change in regulations, by methodology determined to be scientifically valid by independent, qualified statisticians.

  2. All regulations of ambulatory surgery facilities should undergo an independent review. Those which impose a significant cost burden (more than 1% of the cost of providing treatment) that cannot be demonstrated to improve patient outcomes should be rescinded, unless specifically required by statute. A comprehensive report should be made to Congress of the cost of statutorily mandated regulations and the lack of benefit attributable to same.

Robert P. Gervais, M.D.
March 18, 2002