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

Volume 64, No. 2 February 2008


To practice the profession of medicine in the United States today, one needs permission from the government.

Without a license from a politically appointed agency, years of training and service are wasted. Today, that license can be revoked arbitrarily, ruining lives and depriving patients of a trusted and sometimes unique source of care.

Faced with a Kafkaesque, unaccountable regime of administrative law, physicians dare not speak out.Therefore, AAPS has taken the unprecedented action of bringing action as an association against the Texas Medical Board (TMB).

In a case filed in the U.S. District Court for the Eastern District of Texas, Texarkana Division, AAPS seeks declaratory and injunctive relief to "end the pervasive and continuing violations of constitutional rights of its members."

Following up on testimony presented to the state legislature on Oct 23, 2007 (transcript and recordings posted at www.aapsonline.org ), AAPS asserts that the TMB abuses process in allowing anonymous complaints; operates with improper conflicts of interest; has arbitrarily rejected the decision of an administrative law judge; breaches the privacy of targeted physicians; and retaliates against those who speak out.

Sources of anonymous complaints include physician competitors and insurers who do not wish to pay claims.

Chief disciplinarian Keith Miller, M.D., who resigned from the TMB (AAPS News, November 2007), possibly to avoid testifying, served as a plaintiff's witness in up to 50 malpractice cases during his tenure on the TMB, without disclosure to the public, and may have even generated malpractice cases by improperly disciplining physicians.

Physicians can supposedly appeal unfair rulings from informal settlement conferences, but the threat that TMB will disregard a favorable decision and retaliate with harsher penalties deters physicians from exercising their rights.

The requested relief could prevent imminent future injury and enable AAPS members to redress past injury by reopening tainted proceedings.

The AAPS lawsuit is the first time the TMB has been sued over abuse of power, according to its general counsel Robert Simpson (Abilene Reporter News 12/27/07).

An article in the Houston Chronicle generated a large number of public comments, some hostile to physicians, but many supportive: "The Board has a quota they try to meet and have shown themselves willing to falsify information...to achieve their goal," stated one. "If you're a patient and don't think this affects you, you're wrong" there's increased cost, decreased access, and intolerance for patient noncompliance.

One physician writes to AAPS that he left Texas because of concern over the large number of formal investigations and disciplinary actions every single month. "At its current pace every physician in Texas will be disciplined for something."

Historical Reflections on Licensure

Today, it is a matter of dogma that licensure is essential to protect the public from quackery, incompetence, false advertising, and embezzlement. Decades ago, AAPS had a Committee of Correspondence to debate the question of licensure, and at a meeting in New Orleans, Herb Titus presented the case that licensure amounted to an unconstitutional grant of a title of nobility. It is now considered heretical even to consider an alternative.

At the 1992 annual meeting in Scottsdale, long-time AAPS member Murray Feldstein, M.D., reported that most licensing boards in America had been abolished by the middle of the 19th century. Medical care was appalling, but patients were free to visit cultists or sectarians, whose unscientific practices were often less harmful than more orthodox but also unscientific treatments. Irregulars fell out of favor as medicine improved, without government help. "Competition works!" Feldstein said.

When licensure became important, around the turn of the 20th century, it was initially under the control of organized medicine. Perhaps it helped protect the public; certainly it restricted competition and drove up fees.

This government-conferred privilege, however, comes with a price. At first, licensure was based on competence and ethical behavior. Then, Massachusetts tied it to acceptance of Medicare assignment, and a federal district court decided that to pass constitutional muster, a requirement only need "bear a rational relationship to a legitimate state purpose" (see p. 3).

"In other words, with the license to practice medicine comes the duty to serve state-dictated goals," writes Henry Mark Holzer (J Legal Med 1990;11:201-220). Worse, the appeals court in this case determined that the ban on balance billing was simply a "rule," and licensees needed to obey the rules. " Rules' are rules,' no more, no less," he explains.

Who Makes the Rules, Who Decides, and Who Benefits?

To use Holzer's term, physicians are in a state of license servitude. In some states such as Wisconsin, Florida, and Pennsylvania, they can be delicensed for failure to pay enough to a malpractice compensation fund. But some rules are not specifically legislated; "unprofessional conduct" can mean almost anything. Physicians must satisfy the Board, which may simply acquiese to the whim of staff or dominant members.

With secret proceedings, lack of due process, and absence of oversight, boards can end careers of doctors targeted for innovative therapy, failure to use politically favored therapies, or threatening the revenues of less popular doctors while disingenuously invoking "public safety."

To truly protect the public, board processes must be open to public scrutiny. Texas, now the subject of the most complaints, could set a precedent for reform elsewhere.

Does Licensure Reduce Quality?

The freedom to contract the right of individuals to decide what services to buy and at what price is one of the fundamental rights of man, argues Sue Blevins of the Institute for Health Freedom (Cato Policy Analysis No. 246, Dec 15, 1995). Licensure restricts that freedom. While the justification is always public protection, the lobbyists who push for imposition or strengthening of licensure laws invariably represent the occupation in question, not its customers, observed Milton Friedman.

"I am myself persuaded that licensure has reduced both the quantity and quality of medical service.... It has forced the public to pay more for less satisfactory service," he wrote.

Dr. Feldstein argues that licensure laws, by restricting supply, are at the root of the medical cost crisis. They also hamper the introduction of better technology. To what effect?

Undoubtedly people are spared injury when incompetent physicians are denied a license. Today how many are injured because they are unable to afford or find a physician? Are the numbers greater or lesser? The question at least merits further study. It is amazing that when it comes to clinical trials physicians will accept only the statistically significant results of randomized, prospective, and double blinded experiments. Yet, in matters of politics they will accept whatever seems in their interests.


Solo Practice to Be Scrapped in Birmingham

In the center of England's second largest city, the Heart of Birmingham primary care trust proposes abolishing 76 existing general practices and replacing them with 24 branded units, each predicted to see up to 15,000 patients a year. The idea is to copy the franchised expertise of fast-food restaurants. GPs are fiercely resisting the change, which is claimed to have the "overwhelming support" of the public (Telegraph 11/13/07).


Where Nobody Hires Anybody

After leaving his paid job as a university professor in 1991, Roger Scruton had to learn how to induce people to pay for his skills. He discovered that "employing others, if conducted according to the rules of the welfare state, is a great mistake." Under socialist morality, the employment contract is more sacred than the marriage vow. One has to pay an employee for not working just as one does for the "occasional spasm of industry." A worker who is dismissed has a thousand grounds for suing, thus getting the employer to set him up for life.

Very soon I came to see that the only person you can reliably employ is either someone old enough to retain the marks of that pre-socialist morality according to which you were paid for what you did rather than what you promised, or else someone self- employed. And in our neighborhood in England,... nobody is employed by anyone else, and...everybody is employed by himself.... [N]obody retires. The few young people easily find work, providing they are willing to take the risk of it and register themselves as self-employed (American Spectator, Nov 2007).

The welfare state has made older people redundant before their time, and young people unemployable. The path back from error is never easy, but Europe may yet survive.


Fiscal Notes

For the 11th year in a row, the U.S. Government Accountability Office (GAO) was unable to express an opinion on the consolidated financial statements of the U.S. government because of serious material weaknesses.

"If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up," said Comptroller General David Walker.

There was some progress: GAO can now state an opinion on the 2007 Statement of Social Insurance.

As of September 30, 2007, the federal government's fiscal exposures totaled $53 trillion, up $20 trillion since 2000 a burden of $175,000 for every American, Walker said.

WellPoint, UnitedHealth, and Coventry report blockbuster profits from their government revenue (AM News 11/26/07).

CMS has issued a proposed National Coverage Determination (NCD) that Medicare will not pay for cardiac CT angiography a better, safer, faster, cheaper method for patients not enrolled in clinical trials.

According to an MGMA cost survey, the multispecialty practice cost was $56/relative value unit (RVU) in 2005. Revenue in 2005-2007 was $47/RVU from worker's compensation, $38 from Medicare, and $27 from Medicaid.

The Massachusetts plan touted by Gov. Romney in an ABC presidential debate will cut provider payments by 3-5%.

"There is no justification to be paying more than Medicaid rates," said Commonwealth Care CFO Patrick Holland.

Except of course to obtain access to care. One reason providers endorsed the plan was a promise of greater pay than they received from Medicaid (Consumer Power Report 1/2/08).

For all the fiscal strain, politicians have an ace in the hole, notes Arthur Robinson: www.moneyfactory.gov. People elsewhere in the world make things for us, and we send them output from that factory in return. Now that much of America's printing is being outsourced to countries where industries are not being taxed and regulated into bankruptcy (and can even use unrecycled paper), we could increase productivity by having the Chinese manufacture both the goods and the money. The only drawback is that they might use the money to buy our remaining assets....


Quality Improvement and Quality

"My practice...needs a full-time nurse and receptionist dedicated exclusively to quality-improvement initiatives. We've been marked down for patients not having had appointments, immunizations, or tests that they have in fact had.... Checking the accuracy of the information used against us is a full-time job.... The notion that any of these programs actually improves the quality of care is speculative and debatable" (Vonnegut M. N Engl J Med 2007;357:2652-2653).

The Massachusetts Precedent

The state's promise to provide medical care amounts to an obligation to shift the burden of payment to somebody other than the beneficiary: to the taxpayers in general, or to certain groups such as physicians. Licensure is a key component of the state's ability to impose on physicians.

The precedent for the constitutionality of licensure dates to an 1889 case, Dent v West Virginia. Dent was indicted for practicing without a license under a 1882 law, after being denied a certificate from the state board of health. His medical college was deemed not "reputable," and he had been in practice in W.V. only since 1876, not for 10 years prior to 1882. He claimed that the statute unconstitutionally deprived him of his vested right to practice medicine, the only means of support for himself and his family. The U.S. Supreme Court upheld Dent's conviction, ruling that the law "was intended to secure such skill and learning in the profession of medicine that the community might trust with confidence those receiving a license under the authority of the state."

In Schware v Board of Law Examiners, Justice Black underlined the authority of the states, under the Tenth Amendment, to legislate to protect health, safety, and morals.

"Leaving aside the important question of whether the state's imprimatur on a professional's skill and learning is the best way to protect the public from incompetents," writes Prof. Mark Henry Holzer of Brooklyn Law School (op. cit.), "the qualification criteri[on] traditionally has been the only requirement imposed on the medical license."

The statute tying licensure to a ban on balance billing was challenged by the MMS and the AMA in Massachusetts Medical Society v Dukakis. Not only did the Court rule that relationship to the fitness to practice was not the appropriate standard, but that it wouldn't matter even if it were the standard. The state could permissibly determine, in law, that providing "cost-contained services to the elderly is a necessary part of what it means to be fit and capable to practice," wrote the judge.

"This opened the door to endless other servitudes," notes Prof. Holzer, based on the doctors' "monopoly" to practice. The U.S. Supreme Court refused to review the affirmance by the U.S. Circuit Court of Appeals.


FSMB Wants More Power for Boards

If the Federation of State Medical Boards has its way, physicians will have to meet onerous requirements to prove their competence each time they renew their licenses. Moreover, they will have to document participation in "quality assessment" programs in their practice. Those who take time off from practice will face an expensive re-entry procedure, such as hiring monitors for their practice and undergoing "evaluation by a formal assessment program." (See www.fsmb.org and AAPS News, March 2007).

Specialty societies would make windfall profits from selling recertification materials.

In comments submitted to FSMB, AAPS suggested: "If medical licensure boards are perceived as doing a poor job, then their performance should be assessed." Legislatures should establish a standing oversight committee to set ethical and performance standards, and assure that the board is meeting them. Expectations include respect for physicians' rights, use of competent investigators, truthfulness, transparency, and reasonable penalties.



Would doctors be protected against unwarranted licensure actions or sham peer review under socialized medicine if they speak out against the government to advocate for patients? Pharmacist Jeffrey Fudin thinks that "the government will destroy their careers." At least, he says, "that's what they do in the [Department of Defense] and [Veterans Administration] health care systems." The Office of Special Counsel, the agency that is supposed to protect whistleblowers has become, he states, a covert agency that spends millions of dollars to assure that federal whistleblowers have almost no chance to win a case. See, www.VAWBC.com, www.vawhistleblowers.com, and AAPS News, December 2006).

California recently passed a law intended to protect medical staff members from retaliation for filing formal complaints against hospital facilities for subpar treatment or conditions. This extends a law that previously applied only to patients, nurses, and "other health care workers."

The California Hospital Association fears that the law could hamper peer-review proceedings. But Gregory Abrams, former legal counsel for the California Medical Association, says that hospitals could stop an unwarranted lawsuit against peer review through the anti-SLAPP (Strategic Lawsuits Against Public Participation) law. This law prohibits filing actions to chill free speech on public issues, and the California Supreme Court has held that peer review serves this public function.

The law also gives the court the discretion to block doctors' discovery requests for peer-review-related documents while the hearings are proceeding (AM News 1/14/08).


Drug Database Aids Medical Board

Since the Prescription Drug Monitoring Program became operational in Alabama in 2006, it has been checked more than 30,000 times by doctors, medical licensure boards, and law enforcement. This tracks all prescriptions for scheduled drugs, class II through class V. Checking is not required, but is an option for a doctor or pharmacist who becomes suspicious about patients' "doctor shopping" for drugs. Most queries are by physicians; medical regulatory boards made 1,881 requests between January 2006 and September 2007.

"When you see where someone is writing more prescriptions than anyone else, you have reason to wonder," said Larry Dixon, executive director of the Alabama Board of Medical Examiners. The database has expedited ongoing investigations; no charges have been filed yet (www.privateofficer.com).


NPI Required on Medicare Claims by March 1

Doctors who file electronically must include their NPI, along with any older IDs, on all Medicare claims by March 1. Those who send paper claims to clearinghouse to file electronically on their behalf must also comply.

Though some doctors complain that transition to the new system has become a bureaucratic nightmare, as claims are rejected owing to mismatches in personal information between new and old identifiers, CMS is unlikely to delay the deadline.

Physicians who have been using both old and new identifiers should try filing some claims with the NPI only.

One solo, incorporated physician had to re-enroll in Medicare to get a group PIN. He might miss the deadline because of a re-enrollment backlog (AM News 1/14/08).



New Sham Peer Review Tactic. In my talk at the annual meeting, I showed a slide depicting a consigliere (legal counselor) leaning over and advising the godfather regarding an issue of immunity as related to their business.

The caption: "I know it looks like a bullet hole in his forehead, but if we call it peer review' they can't touch us."

An attorney in the audience informed me that hospitals are beginning to employ "physician investigators" whose job it is to "investigate" allegations against other physicians. They do their own "peer review" and submit a report with recommendations for "corrective" action.

My education in sham peer review is ongoing. Nothing hospitals do, however bold and aggressive, to exert control over physicians surprises me. My slide isn't too far off.
Lawrence R. Huntoon, M.D., Ph.D.


Government Improving Our Lives? Do people believe that attorneys general are disinterested observers, saints trying to make things better for people by imposing ever more insane process requirements on arrangements that have evolved over hundreds of years and generally have good reasons?

Those who believe that probably also think that we have a market system in medicine. I think a better explanation for AGs' behavior is that they saw that Guiliani had a very successful career after he practically invented the perp walk and exploited the RICO statutes to go after people like Michael Milken on technical violations of increasingly arcane securities laws. The template is clear: Pick a rich target. Gin up some charges. Start a media firestorm. Campaign as the champion of the common man. Propose a government agency to rebuild the wrecked landscape that your self-serving campaign created.

Investigate any business up one side and down the other and there will be some "criminal" finding based on some email somewhere. When the AG can subpoena records to "look" for criminal activity, anyone who angers a government official becomes a potential target.

[Now apply this to licensure boards....]
Linda Gorman, Independence Institute, Golden, CO


On Anonymous Accusations. Prior to the French Revolution, the nobles filed "lettres de cachet," which were sufficient accusatory letters to the throne to allow arrests to be made without disclosing the name of the accuser. It appears that the Texas Medical Board thinks this system is OK because "less than 2% of complaints are anonymous." The TMB needs to learn that in this country the accused is supposed to be able to face his accuser; otherwise cross-examination is precluded.
Robert L. Weinmann, M.D., President UAPD 1989-2006


TMB Destroys 50-Year Career. A surgical scrub technician who had been discharged from the Army with a bad back asked me for pain medication. I had seen him doubled up with pain, and I was sure his pain was genuine. He said it was difficult to see his HMO doctor. I gave him several scripts for previously prescribed codeine. He said the medication enabled him to work a little longer before he had to have two crippling operations that rendered him totally disabled. Community First, his HMO, reported me to the TMB for not keeping records: my first infraction in a 50-year surgical career.

At my so-called hearing, I was permitted to say only two things: my name, which they couldn't take away, only tarnish, and "yes, ma'am" when asked whether I understood the rude lecture given by a colleague. I was not allowed to present copies of records of the patient's surgery, nor to present my case on my own (the cost of an attorney was prohibitive).

My penalty was 40 additional hours of CME (I did 100). Also, I had to pass a medical legal test on which I scored 63. I was told I could repeat the test but would have to appear before the board again. In the meantime, I had a life-threatening heart attack, so I voluntarily surrendered my license. They said there could be no appeal.

I had no intention of appealing, but even murderers get the chance to appeal. My name was published in the board newsletter as being guilty of poor medical treatment on the basis of this one case. I have no regrets that I am no longer a part of the medical profession. I would discourage anyone from going into the profession, since I would not want anyone else to go through the humiliation and disrespect accorded me by the board. If my health improves enough to permit travel, I will leave Texas, my lifelong home, and never look back.

It is too late for me, but I truly hope something can be done to protect practicing doctors. Investigation of the board is long overdue. The hearing I received was truly un-American and a farce. Thank you, thank you, thank you.
Marcus B. Dalkowitz, M.D., San Antonio, TX


Board Malfeasance. Problems with physicians' discipline are not limited to Texas. Texan physicians and their patients have unprecedented courage to expose this dangerous situation. State medical boards, set up to protect the public from unqualified practitioners, have become, owing to lack of any external oversight and accountability, state-sanctioned sanctuaries for incompetence and malfeasance. They are actually putting the public in grave jeopardy. Thousands of patients are being denied access to quality medical care as a result of ill- conceived attempts to correct past errors of excessive leniency. Additionally, rampant corruption flourishes owing to lack of checks and balances.... [from letter to Gov. Rick Perry].
Walter Borg, M.D., Monica Borg, M.D., Lafayette, LA