Volume 66, no. 4, April 2010


The functional equivalent of Single Party government is determined to ram through Obama’s “healthcare reform,” even if it has to violate all the rules. The Slaughter Amendment to “deem” that the Senate bill passed without the House having to take a vote on it, plus abuse of the budget reconciliation process to avert a filibuster in the Senate, are being attempted now. The outcome is uncertain at the time of this writing.

Democrats are willing to risk their congressional majority to “get it done,” knowing that dependence on government for medical care is almost certain to keep “progressives” in power indefinitely. Even if a new Congress could repeal the bill after the 2010 elections, Obama will still wield a veto. Thus, many are looking for grounds for a constitutional challenge.

Is the Individual Mandate Constitutional?

An individual mandate is essential to proposed reform. Funding depends on forcing the young and healthy to pay enough to subsidize high-risk individuals, and insurance industry support depends on the prospect of millions of unwilling new customers.

“Mandatory insurance is unconstitutional,” write attorneys David B. Rifkin, Jr., and Lee Casey (Wall St J 9/18/09). If Congress can “tax” someone for being uninsured, it could also tax anyone who failed to follow an order of any kind, they argue.

If the mandate “falls within Congress’s power to tax and spend, no other constitutional authority is necessary,” writes Jack Balkin of Yale Law School (N Engl J Med 2/11/10). He compares it to a penalty tax, like the one for not filing your tax return promptly. It also fits under the Commerce Clause, he believes. The uninsured are not “simply doing nothing.” Rather, they are self-insuring, as by relying on their families for financial help, and substituting such activities for paying premiums to health insurance companies. The cumulative effect, he asserts, “undermines Congress’s regulation...of health insurance markets.”

The same government that tells family farmers what they can grow on their own property—because of the potential cumulative effect on the price of wheat—and that is trying to construe an appendectomy as an interstate affair, has permitted all 50 states to erect barriers to the interstate sale of insurance. That is precisely the type of barrier that the Commerce Clause was meant to tear down, writes Judge Andrew Napolitano (Wall St J 9/15/09). What we have is “raw abuse of power for political purposes,” he says.

A constitutional challenge to the individual insurance mandate is very unlikely to succeed, Balkin concludes. The Supreme Court “would have to reject decades of precedents. It is very unlikely that there are five votes on the current Court for staging such a constitutional revolution.”

State Nullification

More than 30 states are considering measures to keep health insurance optional; 26 involve a state constitutional amendment. The bills are being tracked by the National Conference of State Legislatures (www.ncsl.org). This is part of a nationwide movement to assert the 10th Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The 10th Amendment, as well as the enumerated powers, become “useless surplusage” when any power is stretched too far, argues Rob Natelson (www.tenthamendmentcenter.com).

Also, states have standing to join suits challenging the individual mandate, writes Florida Attorney General Bill McCollum in a Jan 19 letter to congressional leaders. Congress may not compel action through laws that “‘pass the point at which pressure turns into compulsion’ in areas it cannot otherwise regulate.”

Arguing that “nullification laws are pure political theater” is Timothy Jost of Washington and Lee law school (N Engl J Med 3/11/10). “Our only civil war was fought over whether national or state law was ultimately supreme.” He warns that “if individuals successfully resist accepting responsibility for being insured, there will be no way of expanding affordable coverage in a system that depends on private insurers.” That would mean more government insurance, which “may not be the result resisters want.”

Jost thinks that Virginia, the first State to pass a law prohibiting mandatory insurance, will someday be as much embarrassed by it as by its resistance to federally forced school desegregation, led by “demagogues such as the late Senator Harry Byrd (D-VA).”

“It is still about the morality of equal treatment for all,” Jost writes. Until this utopian state is achieved, there is apparently no limit to the exercise of federal power.

Does the Constitution Matter?

When constitutional questions are raised about reform proposals, the elephant in the room is—Medicare. A better analogy might be the Enemy’s planet in the science fiction story Ender’s Game by Orson Scott Card. Attacking that planet—where the brains of the Hive reside—is forbidden, but winning the war is impossible until that is done. Proponents of “reform” sometimes even proclaim that if their ideas are unconstitutional, then so is Medicare. If the government can force Americans to depend on a Ponzi scheme for medical care in their senior years, is there anything it cannot do? Social Security was known to be unconstitutional when it passed, writes AAPS past president Kenneth Christman, M.D. (J Am Phys Surg, spring 2010). This precedent is destroying American medicine, he writes.


Taking Back Congress

“It is fine to complain about those who would do evil,” wrote Tom Bethell, quoting Arthur Robinson. “But it is best to win”—i.e. to beat the enemy (American Spectator February 2001).

America needs strong, principled candidates to run for Congress, not just opportunistic lawyers who’d enjoy the prestige. First-time physician candidates who have been called to our attention by AAPS members include:

Washington ophthalmologist Arthur Coday, M.D.: “We’re going to drive a spike through the head of a government takeover of healthcare” (www.codayforussenate.com).

North Carolina ophthalmologist Dan Eichenbaum, M.D.: “The Constitution is written in English. You don’t need an interpreter to understand it” (www.drdan4congress.com).

Cardiologist Steve Mehta, M.D., who makes housecalls by airplane in rural Arizona, is for permanent tax relief and free-market solutions in medicine (www.mehtaforcongress.com).

Ophthalmologist Rand Paul, M.D.: “The Federal Government must return to its constitutionally enumerated powers and restore our inalienable rights” (www.randpaul2010.com).

Speakers at AAPS meetings have filed to run for Congress:

Star Parker, founder of the Center for Urban Renewal and Education (CURE), is running in Los Angeles County, one of the bluest in the U.S. (www.urbancure.org).

Arthur Robinson, Ph.D., of Oregon is taking on one of the most entrenched enemies of free enterprise, to stop the progressives’ assault on freedom (www.artrobinsonforcongress.com).


AAPS Survey on Access to Care

Of 518 physicians responding to our 2009 survey on access to care, 4% reported being not enrolled in Medicare; 21%, opted out; 59%, participating; and 10%, nonparticipating. Of the opted-out physicians, 57% will make an appointment for a new Medicare-eligible beneficiary within a week, and 71% within a month, not much different from those who are “in” Medicare (45% and 73%, respectively). About 19% of opted-out and 10% of par/non-par physicians do not see new Medicare-eligible patients. New non-Medicare patients have slightly better access to Medicare doctors: 52% can get an appointment within a week, 86% within a month, and only 2% not at all. Established patients get only slightly prompter service in all categories.

Comments were received from 189 respondents. All the remarks on opting out were favorable. For example: “It is such a feeling of relief.” “Cancelling my Medicare and Medicaid numbers 10 years ago was the best move I ever made.” “Thank you for helping me opt out. I do not make much income but am able to spend adequate time with patients.” “I opted out and now see more than 65 [allergy] patients for cash. They are happy and I am happy.” “Since I opted out I have more work than I can handle…. Only one patient left my care… My collection rate is 96%.” “Since I opted out of Medicare 8 years ago, the number of Medicare beneficiaries in my practice has increased, [although] one-third of patients who call decide not to see me because of financial concerns.” “ I sleep better already!”

None reported being happy with Medicare. “I am quitting at age 40.” “Medicare clerks drove me crazy.”

Full results are posted under “surveys” at aapsonline.org.


Physicians Dropping Out

AAPS survey figures are comparable to those reported by the Physicians’ Foundation, which found that in 2008, 12% of physicians had closed their practices to Medicare, and more than 33% were not accepting Medicaid (Peter Ferrara, Heartland Institute Policy Study 123, August 2009).

Additionally, there has been a steady decrease in physician work hours over the past decade, temporally and geographically associated with decreased fees. A 5.7% decrease in hours worked by nonresident physicians is the equivalent of losing 36,000 physicians from the work force (JAMA 2/24/10).

In explaining “why doctors are abandoning Medicare,” C.L. Gray, M.D., founder of Physicians for Reform, writes that “physicians will not be bullied into bankruptcy.” He also cites Washington’s increasingly hostile posture toward physicians. One physician spent a year and $100,000 fighting a bounty-hunter’s allegations of “fraud,” e.g. use of a chemical stress test instead of a cheaper treadmill—in a double amputee (FoxNews.com 1/14/10).

A general surgeon asked: Can I afford to not take Medicare? Given that Medicare was 15% of his income, 50% of his patient volume, and 70%-80% of his time, his answer was: Yes!

Family physician Douglas Campbell, M.D., of Prescott, AZ, decided to “reject the cubicle life and career.” Opted out of Medicare, he charges $50 for a 15-minute office visit. Some patients would rather drive 3 hours to Phoenix, stay overnight in a hotel, and pay the Medicare copayment—but that’s their choice.


Following the Numbers

Government debts, as a percentage of GDP: Greece, 124.9%; Italy, 116.7%; Belgium, 101.2%. U.S., 93.6%; Portugal, 84.6%; Ireland, 82.9%; UK, 80.3% (GCOR, March 2010).

In the U.S., personal debt rose from 65% of income in 1980 to 125% now. The poverty rate in the U.S. is higher than in any other industrialized nation. Home values have lost $13 trillion, and pension plans $5 trillion (ibid.). China dumped $34.2 billion of Treasuries in one month, the largest Chinese liquidation of U.S. debt on record. The U.S. auctioned off $126 billion in Treasury notes and bonds in a single week—the most in U.S. history. The average maturity of U.S. debt hit 49 months, the lowest in nearly three decades, in late 2008. Attempts to increase that to 84 months are running into the highest interest-rate premium ever; that’s one reason the cost of servicing U.S. federal debt is about to quadruple to $840 billion per year (Martin Weiss, Safe Money Report, March 2010).


AAPS Calendar

June 25-26. Workshop, board of directors meeting, Atlanta, GA.

Sept. 15-18. 67th annual meeting, Salt Lake City, UT.

Sept. 28-Oct. 1, 2011, 68th annual meeting, Atlanta, GA.


Medicare Coverage Inferior

According to a declaration filed in a lawsuit asserting the right of seniors to opt out of Medicare Part A without losing their Social Security benefits, Gabrielle Kotoski, president of Medical Communications Management Group, writes that “medical services/benefits under Medicare are inferior to medical services/benefits individuals are willing to pay for themselves (Hall et al. v. Leavitt). Moreover, Medicare is fiscally insolvent.

Because of Medicare’s controls, threats, and limitations, physicians are increasingly hesitant to offer some services, and beneficiaries might not even learn about some of the options.

“For many,” she writes, “the National Provider ID requirement was the final straw because it enables the government to more closely monitor all future physician behavior and prescribing, forcing compliance with government dictates and enabling punitive action.”

In her own city, Albuquerque, NM, only four of the many primary care physicians are accepting new Medicare patients. Two of them are nearing retirement, and two are new in practice.

Under pain of losing tens of thousands of dollars in Social Security benefits, seniors are forced into a “second tier, government controlled health care program.”


Prosecution Ends with Suicide Pact

After 2 years of fighting accusations of fraud related to allegedly unnecessary cataract surgery, Indiana ophthalmologist Philip Gabriele, 44, and his wife and office manager Marcella, 43, were found dead of gunshot wounds (Ocular Surgery News 3/10/10).

In an open letter sent before his death, Dr. Gabriele explained that once a criminal indictment is filed against a physician, his medical career is ended, even if he is later exonerated. His resources had been exhausted, after providing the assistant U.S. attorney with “copious evidence negating his constantly shifting, ill-conceived and unsupported theories.” He felt that his purpose in life had been to help people see. “Seeing that our medical work in this regard is done, our last act hopefully will open the eyes of the country to a federal legal system that entails far too much power to local officials without appropriate oversight….”

The government’s “smoking gun” was an undercover agent in whom Dr. Gabriele had confirmed an optometrist’s diagnosis of “incipient cataracts.” His advice: return in one year.

AAPS should warn physicians that participation in Medicare or Medicaid exposes them to risk of baseless prosecution, character destruction, and even death, writes member Jeffrey Liegner, M.D. The measly payment offered by the Central Authority is well below any prudent threshold, he states.


“There was a society of men among us, bred up from their youth in the art of proving, by words multiplied for the purpose, that white is black, and black is white, according as they are paid. To this society all the rest of the people are slaves…. “It is a maxim among these lawyers that whatever has been done before, may legally be done again: and therefore they take special care to record all the decisions formerly made against common justice, and the general reason of mankind. These, under the name of precedents, they produce as authorities to justify the most iniquitous opinions….”
Jonathan Swift, Gulliver’s Travels, Chapter 32


AAPS Appeals Case Against TMB

The lower court having dismissed AAPS v. TMB (see AAPS News, February 2008) for lack of standing, AAPS has appealed to the U.S. Circuit Court of Appeals for the Fifth Circuit.

AAPS argued that the Texas Medical Board (TMB) violates the due process rights of physicians through the manipulation of anonymous complaints, and asked for declaratory relief. The standing issue could have been resolved by the examination of actual complaints, some 100 pages of evidence that the TMB has in its files. The court failed to order even this minimal discovery.

One of the issues is whether an association can be denied standing to sue on behalf of its members on the basis that some of the members would not necessarily benefit from the relief sought, say because not all are licensed in Texas. The brief is posted at www.aapsonline.org.


More Prosecutions Anticipated

Government enforcers are looking for more ways to recoup money from healthcare fraud actions. These include more False Claims Actions by states and more misdemeanor prosecutions of individual corporate officers and executives.

Under the responsible corporate officer (RCO) doctrine, anyone with the authority to end noncompliant conduct can be held liable for failing to do so, whether or not they knew of the wrongdoing—even if it occurred in say China, where the officer has little control over day-to-day operations.

A growing focus of concern is promotion of off-label uses of drugs or devices, as through Google links (HCFR 2/10/10).

Physicians could be charged under the False Claims Act under the theory that a lapse of quality establishes a lack of medical necessity, thereby rendering a claim false. Services are “unreasonable” if “below the standard of care”—and are in fact valueless if not detrimental. If a service is worthless, then it is as if no service had been provided. This is an “incentive for providers to tighten quality standards.”

“Billing for medical blunders adds insult to injury.” Filing a claim for a “never event” or a “hospital-acquired condition” (HAC) could result in worse than nonpayment.

HACs include pressure sores, catheter-associated urinary infections, falls, poor glycemic control, surgical site infections, and deep vein thrombosis (BNA’s HCFR 3/10/10).


Anti-Trust Relief Denied

A jury in Houston, TX, rejected antitrust claims against Memorial Hermann Healthcare System brought by a group of physicians whose hospital failed in 2007. Houston Town and Country Hospital argued that it could not secure managed-care contracts because Memorial Hermann threatened to retaliate against any insurers that did business with the physician-owned upstart. The jury concluded that there was not enough evidence of a conspiracy, though there clearly was evidence of a strategy to raise rates or terminate entities that did business with the big hospital’s competitor. In a settlement with the Texas Attorney General, Memorial Hermann agreed to a 5-year prohibition of the contracting practices at issue, while denying that it had ever engaged in them (Modern Healthcare 3/11/10).



The Purpose of PECOS. CMS states that PECOS (Provider Enrollment, Chain, and Ownership System) “is an important part of CMS’s strategy to reduce Medicare fraud and make sure that the Medicare program...is paying for legitimately ordered and medically necessary supplies.” This is pure ruse. Opted-out physicians, who take no Medicare money, are the least likely to commit or benefit from Medicare fraud. It is rather an attempt to force all physicians to enroll in the government-run program, so that they can order diagnostic tests and supplies for their patients.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


Deductibles and Risk. The individual perception of what constitutes a “risk” that needs to be “insured” varies. But at some point down the scale the cost of insurance becomes prohibitive because from the perspective of the underwriter the “risk” becomes a “predictable loss.” Then the insured will be upcharged to the point that they would be better off financing the loss in some other way. A person who can’t handle a deductible that constitutes a predictable loss also cannot afford the insurance premiums to transfer that loss to the carrier—unless the carrier is shifting the cost to other insureds who are at lower risk.
Frank Timmins, Dallas, TX


Reality. We hear incessantly about “political reality.” But politicians are dealing in fantasy and avoiding the reality that the country is broke. Reality must be dealt with at some point—if not now, then later, on a much more emergent basis.
Tamzin A. Rosenwasser, M.D., Lafayette, IN


Home Visitations. Under the Senate “healthcare reform” bill passed on Christmas Eve, about three-quarters of American parents are deemed unable to care for their children without the supervision of Leviathan. These include homes where: the mother is not yet 21; anyone smokes; a child has low student achievement, developmental delays, or disabilities; or someone is serving or previously served in the armed forces.
Jim Vanne, Aurora, IL


True Reform. Republicans can’t dance on reform because they have two left feet. For example, they suggest fighting fraud by having agents entrap physicians with bogus patient visits. What we need is reverse engineering. Simplify Medicare by repealing regulations in the order the reverse of their implementation. Elected Republicans need to stick to Reagan principles.
Wayne L. Iverson, M.D., San Diego, CA


Double Standard of Care. Remember the President’s evasive double talk when asked about care for his family. He wants them to get “the best that is available.” But an amendment to rescind congressional and executive branch exemptions from the structure of care in the “reform” bills was defeated. At least their hypocrisy is transparent. Washington’s version of the Golden Rule: “Do unto others, and then cut out.”
Richard Boronow, M.D., Brandon, MS


People Pay Too Much for Insurance. How did $13,000 a year for insurance become a “fact”? I’m working with a lawyer whose family will pay $18,000 if he keeps his COBRA coverage. With the HSA-compatible coverage offered by his firm, he would pay only $4,200. He let an insurance broker and an HR person determine his insurance coverage. They are not in a position to represent his best interests—only he himself is. Educate people you care about!
Janice Michaud, Manhattan Beach, CA


The Most Cost-Effective Deductible. A $25,000 deductible reduces the traditional premium by about 60%. A $50,000 deductible reduces it by another 10%. It seems as though $25,000 is the best bang for the buck. Who knows why commercial insurers do not offer these alternatives. It should be possible to develop innovative ways to fund the first $25,000–$50,000.
Don Levit, Sugar Land, TX


Fair Prices Are Not Always the Same. Say that I have had a busy day, with customers back to back. If you want me to mow your lawn today, I will have to do it after 8 p.m., bring floodlights, and delay my family weekend getaway. So I will only do it for $100. But if you’ll wait until Monday when I have only two clients, I’ll do it for $50. There is nothing wrong with this model, as long as I tell the customer before I start. If the customer knows the price and agrees to it, he is obligated to pay. If he doesn’t, the supplier of services should issue him a 1099 for forgiven debt. Why shouldn’t the same principles apply to medical care?
Ralph Weber, C.L.U., Paso Robles, CA


Stark Laws. We don’t have Stark laws for car sales, home repairs, or appliances, to accuse companies of selling us things we don’t need. So why for medical care? It’s because the patient is not policing the transaction. A good comparison is corporate travel policies. Companies may dictate which airlines or hotels their employees may use, because the company is paying. More often, the company dictates the amount that can be spent, and the employee has to pay for the “balance billing” out of his own pocket.
Gerry Smedinghoff, Phoenix, AZ