AAPS News April 2015 – Making Disaster Bipartisan


Volume 71, no. 4 April 2015

When it appears that Democrats have lost the battle to socialize medicine, the Republicans ride to their rescue.

ClintonCare was defeated in Congress when people found out what was in it and who was behind it. Then the Republican Congress, which was elected largely because of opposition to ClintonCare, enacted the Health Insurance Portability and Accountability Act (HIPAA), with much of its wording imported directly from the Clinton Plan. Saying “HIPAA” generally refers to the rule-laden pretense of protecting privacy, but the law also incorporates the criminalization of medicine (especially errors in medical billing) and the security rules for electronic health records (EHRs). Republicans also passed the back-up strategy, the State Children’s Health Insurance Program (SCHIP), and, with the Balanced Budget Act of 1997, the notorious Clinton-Gingrich sustainable growth rate (SGR) formula for keeping Medicare solvent.

AAPS News is repeating itself, but so is history (www.aapsonline.org/judicial/aapsvclinton.htm).

Physicians have endured costly audits or paid huge fines—or gone to prison for coding errors. Millions of patients have had their EHRs breached. But there is no thought of going back.

Prominent players still include Lois Quam of United Healthcare and other managed care executives; the Robert Wood Johnson Foundation; information technology vendors; Planned Parenthood; and academic medical centers. Eric Holder, Clinton’s deputy attorney general, declined to prosecute health care guru Ira Magaziner (http://tinyurl.com/pcvwrda) for perjury, and as attorney general has not held Obama appointees to the law either.

Bill Clinton at least did not call secrecy “transparency,” and the federal district court in D.C. ordered opening the meetings of the Clinton Task Force on National Health Care Reform to the public (http://tinyurl.com/khnfq89).

Judge Royce Lamberth is again ordering the executive branch to preserve and release documents, as he did then (http://tinyurl.com/pmn3265). The Clinton Working Groups provided a truckload of documents to the National Archives, but some floppy disks were blank, and some important leaders claimed not to have generated any documents. Hillary’s current e-mail practices are of the same character.

SCHIP is about to expire. Republicans will probably renew it. If the U.S. Supreme Court rules subsidies illegal on federal Exchanges in King v. Burwell, Republicans propose to continue them for a transition period—like COBRA, which is from HIPAA.

At the moment, Democrats own ObamaCare. Republicans seem likely to buy into its socialist redistribution principle. Will they rescue America from ObamaCare’s control over American medicine, or extend it into the foreseeable future and thus set it in stone (IBD 3/16/15, http://tinyurl.com/mzmcyud)?

Kick the Can, Round 18

As doctors face the accumulated fee cuts of 21% from the postponed SGR implementation date, pressure mounts for a repeal-and-replace fix, or at least another delay. As usual, a “must pass” bill comes with riders that otherwise might not pass, this time an extension of SCHIP. The proposed Boehner-Pelosi deal (see p 2) would have a pretend partial “pay for,” over 10 years.

It would be “unfair to allow families to lose their coverage,” write Senators Orrin Hatch (R-UT), Lamar Alexander (TN), and John Barrasso (R-WY) (Wash Post 3/1/15, http://tinyurl.com/nc2ghb5). They are speaking of loss of subsidies, not the Administration’s back-room deal allowing insurers to cancel contracts if subsidies are lost (http://tinyurl.com/mthd26t). Representatives Paul Ryan (R-WI), Fred Upton (R-MI), and John Kline (R-MN) propose to “support Americans in purchasing the coverage of their choosing” with advanceable, refundable tax credits (subsidies)—continuing the popular “safeguards” that destroy insurance, such as no limits on preexistings or lifetime coverage (WSJ 3/2/15, http://tinyurl.com/kkns8e5).

Republicans want to “protect Americans harmed by the administration’s actions,” but apparently not Amity Shlaes’s Forgotten Man, who pays the taxes, compliance costs, and interest.

Delaying cuts, extending benefits, promising solvency—someday—all perpetuate the price controls of Medicare, the government dependency in ObamaCare, and the addiction to deficit spending. It’s a full employment program for lobbyists, a sword of Damocles for American medicine and industry, a prescription for an endless game of kick the can to future generations.

The Reckoning

The reality that politicians refuse to discuss is that the game cannot be continued indefinitely, not even by confiscating all wealth and enslaving future generations.

According to the U.S. government’s own numbers, the current net worth of the U.S. is minus $60 trillion, writes Simon Black (http://tinyurl.com/nebeuvr). That counts all assets (every acre of land, every drone, every drop of oil in the strategic reserve,…) and subtracts all liabilities. This debt can never be repaid. The U.S. has depended on trust in its banking system and the dollar’s status as the world’s reserve currency, but now the UK, Germany, France, and Italy are joining the new China-led Asian Infrastructure Investment Bank (AIIB).

H.Res. 41, which passed in January, (http://tinyurl.com/lc9hmt8), states that the federal government should not bail out state and local pension plans. Ignored by the press, the “whereases” admit that the federal government is bankrupt.

Boehner-Pelosi SGR Repeal

Still under negotiation, the Boehner-Pelosi proposal would “pay for” $70 billion of the $200 billion cost over 10 years.

Most “savings” would come from lowering income thresholds for means-tested Medicare programs, or by increasing premiums for higher-income beneficiaries. Restrictions on first-dollar coverage by Medigap plans are also proposed.

Boehner would rely on Democrats’ votes to pass the bill over objections of “Tea Party” Republicans. More than 750 medical societies have endorsed the bill.

The SGR Repeal and Medicare Provider Payment Modernization Act of 2015 (H.R. 2, based on H.R. 1470) would create two conversion factors in 2026. Advanced payment model participants, such as practices in accountable care organizations, would get a 1.0% increase each year. Providers who don’t qualify for those models would get a 0.5% increase each year (http://tinyurl.com/kqldh3z).

The bill would also consolidate the electronic health records (EHR) meaningful use, Physician Quality Reporting System (PQRS), and the value-based modifier programs into a merit-based incentive payment system (MIPS) in 2019. The MIPS would grade providers based on quality, resource use, clinical practice improvement activities, and meaningful use of certified EHR technology. The clinical practice improvement activities category, for example, would include subcategories for expanded practice access, population management, care coordination, beneficiary engagement, and participation in an alternative payment model.

The bill would require doctors to receive at least 25% of their Medicare revenue through an Alternative Payment Model by 2019–2020 (http://tinyurl.com/k3blpmg).

Senator Harry Reid (D-NV) expressed concerns that the bill might write into law existing restrictions on abortions at community health centers (http://tinyurl.com/m8b5qxe).

United Healthcare, the biggest U.S. insurer, is aggressively pushing a provision to give it the right to create regional pricing for itself in the lucrative federal employees market. Such “healthcare gerrymandering” would give it a big advantage over competitors who would have to use nationwide averages (Washington Examiner 3/23/15, http://tinyurl.com/pxackh2).

Proposed GOP Budget

The 10-year budget proposal unveiled by Senate Budget Committee Chairman Mike Enzi (R-WY):

  • Is projected to reach balance by 2025 (a “down payment” on campaign promises to erase deficits by the end of the decade);
  • Repeals the Affordable Care Act (ACA);
  • Assumes that $2 trillion from ACA’s tax increases continues to flow into the Treasury (http://tinyurl.com/o5yt3h7);
  • Block grants Medicaid and food stamps;
  • Cuts $431 billion from Medicare, the same as Obama would, but by a different method—without the change from a guaranteed benefit to premium support as proposed by the House.
  • ♦ ♦ ♦

    “If the 2001 tech wreck was a jump off a thirty-meter platform and the 2008 financial crisis was a plunge off the cliffs of Acapulco, the end of this multiple-absurdity mania of manias will be a swan dive from the top of the Empire State Building into a two-foot wading pool.”
    Robert Gore, cited in James Cook Market Update, January 2015

    Perils of Entrenched Socialism

  • Resistance to Reform: A proposal for a few minor economic reforms in France, such as permitting stores to open 12 Sundays per year instead of only five, has provoked death threats against its originator, Emmanuel Macron, minister of the economy. Every change is seen as the “thin edge of a wedge,” writes Theodore Dalrymple. No matter how small commercial privileges may be, “their abolition always leads to conflict between those who benefit from them and those who must pay for them” (City Journal 3/18/15, http://tinyurl.com/p6zpb3u).
  • A Tax on Shadows: A town in Italy has proposed taxing an owner whose store has an awning that casts a shadow on public property for using the public property. To avoid high sales and value-added taxes needed for entitlements, welfare, loafing workers who can’t be fired, and an obese government, many financial transactions in Italy are now conducted in cash, writes Craig Cantoni. There is talk about putting a limit on cash transactions.
  • War on Cash: Michel Sapin, France’s minister of finance, has rolled out eight new restrictions on use of cash. Maximum cash payments have been reduced from 3,000 to 1,000 euros. Although the pretext is fighting terrorism, Simon Black suggests that the real reason is to keep people’s savings trapped in banks. If people decide to withdraw money rather than accept negative interest rates from undercapitalized banks, the banking system would collapse (http://tinyurl.com/npewbb2). In the U.S., banks may not permit withdrawal of $5,000 in cash all at once. Assistant attorney general Leslie Caldwell pressed banks to “alert law enforcement authorities about the problem” of suspicious customers who withdraw $5,000 or more so that police might “seize funds” or “initiate an investigation” (http://tinyurl.com/onuly4f).
  • Too Powerful to Criticize: After 60 years of the National Health Service monopoly in Britain, incompetence is taken for granted. Even an atrocious scandal such as a systematic cover-up of baby deaths does not lead to calls for an overhaul, writes Dan Hannan, a British member of the European parliament (Washington Examiner 3/9/15, http://tinyurl.com/qzjzw7u). There is an alliance of interest groups who benefit, hard-line leftists, and the vast majority of change-averse people whose experiences were on the whole satisfactory. Hannan sees such an alliance developing in the U.S. “This is your last chance to strangle Obamacare at birth; flunk it, and you won’t get another.”
  • Inadequate Services: A study by the Fraser Institute found that more than 52,000 Canadians left the country to obtain non-emergency medical treatment in 2014, a 26% increase compared with 2013 (Canada Free Press 3/17/15, http://tinyurl.com/nndvo22).
  • AAPS Calendar

    Jun 5, 2015. Thrive, Not Just Survive XXII and
    Jun 6, 2015. Board of Directors meeting, Raleigh-Durham, NC.
    Oct 1-3, 2015. 72nd annual meeting, St. Louis, MO.
    Sept 22-24, 2016 73rd annual meeting, Oklahoma City, OK.


    Free yourself and your patients from the SGR, the MIPS, the breach of medical records by insurers and their business associates, and predatory insurance premiums. Go 3rd party free.

    Plan B for ObamaCare

    Although the Obama Administration has denied having a contingency plan in the event that the U.S. Supreme Court rules for plaintiffs in King v. Burwell, Rep. Joe Pitts (R-PA) told HHS Secretary Burwell he had learned of a 100-page Plan B. She “responded with a classic non-denial denial, stating that she was not aware of the existence of such a document,” writes Avik Roy.

    The plan involves encouraging states to declare that they are subcontracting the management of an insurance exchange to HHS, thereby “establishing” an exchange as per the law. The statutory text of Section 1311 of ACA does specify that “a State may…enter into an agreement with an eligible entity to carry out 1 or more responsibilities of the exchange,” but that such an agreement must meet a number of specifications that the federal exchange may not meet.

    If the IRS had never taken the action it did in 2011 to allow subsidies to flow through Obamacare’s federal exchange, Roy writes, dozens of Republican governors might have set up exchanges in their states because they wouldn’t want to turn down the “free” federal money. That’s the reason 10 GOP governors gave for expanding Medicaid, the developed world’s most dysfunctional healthcare system. “The President was scared that his law would be more vulnerable if he let states decide what was best for them” (Forbes 3/16/15, http://tinyurl.com/lp4ny57).

    Stage 3 Meaningful Use

    The proposed rule for stage 3 meaningful use of EHRs specifies new criteria for qualifying for Medicaid incentive payments, and also for avoiding Medicare payment adjustments. All eligible entities will have to attest in stage 3 by 2018.

    Despite physicians’ complaints, CMS is doubling down on criteria for care summary exchange at transitions of care and patient record sharing, and adding new objectives: e.g., more than 25% of patients must “actively engage” with their EHR, and a message using the EHR secure messaging function must be sent to 35% (Medscape 3/20/15, http://tinyurl.com/nsmmye8).

    Constant Compliance

    The Office of Inspector General is getting another $80 million to find fraud and abuse, and the Office of Civil Rights another $4 million to conduct HIPAA compliance audits and investigate complaints of discrimination.

    For purposes of the anti-kickback law, the definition of “referral” is being expanded to situations in which a referral relationship is not obvious to a physician. “A lot of doctor gatekeepers are being indicted” (Medical Practice Compliance Alert 3/2/15).

    To prepare for a meaningful-use audit requires a lot of data physicians may not know they need, such as date-stamped screenshots and a full-blown security risk assessment (MPCA 2/16/15).

    Many physician practices, especially small and medium-sized, are likely not in full HIPAA compliance. Less than two-thirds of surveyed practices provided annual compliance training to staff, and of those, only 65% had evidence of such training (ibid.). Ignorance could prove very costly.

    Being a Medicare or Medicaid provider or HIPAA-covered entity is increasingly complicated and dangerous.

    New Record for Government Secrecy

    Last year, the Obama administration set a new record for censoring government files or outright denying access to them under the U.S. Freedom of Information Act (FOIA), according to an analysis of federal data by The Associated Press (AP).

    It also acknowledged that in nearly 1 in 3 cases its initial decisions to withhold or censor records were improper under the law —but only when it was challenged.

    Its backlog of unanswered requests at year’s end grew remarkably by 55% to more than 200,000. It also cut by 375, or about 9%, the number of full-time employees paid to look for records, to the fewest number in five years.

    The government’s figures covered all FOIA requests to 100 federal agencies during fiscal 2014. Citizens, journalists, businesses, and others made a record 714,231 requests. The U.S. spent a record $434 million trying to keep up. It also spent about $28 million on lawyers’ fees to keep records secret.

    In e-mails obtained by AP about who pays for Michelle Obama’s expensive dresses, a sentence blacked out in one part of the document, but not another, under a law protecting private information such as Social Security numbers, read: “We live in constant fear of upsetting the WH [White House].”

    AP chief executive Gary Pruitt wrote: “The systems created to give citizens information about their government are badly broken and getting worse all the time” (http://tinyurl.com/q68j2af).

    EPA Lied about FOIA Request, Judge Rules

    Judge Royce Lamberth warned the U.S. Environmental Protection Agency (EPA) not to discriminate against conservative groups in the way it responds to open-records requests. While he said he couldn’t prove that officials intentionally destroyed documents, he described as “absurdity” the way the EPA handled a FOIA request from the Landmark Legal Foundation and then the court case stemming from it. EPA admitted that it had misled the court about how it went about searching for documents.
    Landmark’s 2012 request sought to discover what outside groups EPA spoke to when developing rules. EPA slow-walked the request, Landmark sued, and the issue has been in court ever since. While strongly rebuking the agency, Judge Lamberth declined to impose sanctions for spoliation, stating that Landmark could not prove intentional bad faith (http://tinyurl.com/myt2rzj).

    Who Is Trying to End Vaccine Exemptions?

    Using the “crisis” of measles cases traced to exposure at Disneyland, legislators in a number of states are trying to end religious and philosophical exemptions to vaccine mandates. Citizens who successfully opposed such a law in Oregon tracked the funding of NACCHO (the National Association of County & City Health Officials), a group that they call “one of the most powerful anti-vaccine choice groups in the country.” Most of NACCHO’s revenue is from government grants, most prominently from the CDC. Also, 7 of NACCHO’s 11 priorities come from CDC. Of most concern to advocates of vaccine choice is the policy statement calling for a comprehensive immunization program for all stages of life (“cradle to grave”). CDC recommends 72 vaccinations between ages 19 and 65 (http://tinyurl.com/qy5t75d).


    Rebuilding the Berlin Wall in American Medicine. We know where all of those pieces of the wall went after the Berlin Wall was torn down. They will be used to trap physicians. The government created a hated unsustainable payment methodology, and now offers to rescue physicians by substituting an even worse payment methodology, which essentially creates virtual bionic physicians. Arms, legs, mouth, and brain are virtually wired to central government control. Physicians are being incorporated into the Borg, and being told that resistance is futile. Centralized control mechanisms are being streamlined. Individual “non-compliance” cuts in fees (such as those tied to “meaningful use” of electronic health records [EHRs] and the Physician Quality Reporting System) are being bundled into composite large cuts in fees.

    The mainstream press reports: “The government set a timetable…to extinguish ‘Medicare’s fee-for-service’ system…” And “fee for service is on its way to extinction.” It includes the liberal spin of paying for quality not quantity. The government Medicare program, which gets questions about its own program wrong 96% of the time, will no doubt tell us what qualifies as “quality.” It is clear that socialists in and out of government view fee-for-service and independent physicians as “bugs” that need to be exterminated for the good of society.
    Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY

    ObamaCare Bans Insurance. ACA requires insurers to sell coverage to the ill and injured—people who have never paid a dime into the plan. It bans pre-existing condition exclusions, and with it health insurance. Instead, we have mandated third-party payment of medical bills, albeit at a higher price and deductible. The ACA’s prohibition on denying coverage to the already-sick has become the law’s strongest hold on a compassionate American public. But it’s dangerous because it’s the essence of national health care. Keeping health plans in place merely gives the public the sense that nothing has changed. But it has. Americans typically arrive in a “pre-existing condition desert” because of employer-sponsored coverage and family insurance plans. There is a way out, a way back to freedom (http://tinyurl.com/n89wne9).
    Twila Brase, R.N., Citizens Council for Health Freedom

    Homo clinicus. Clifton Meador describes an evolving new species (http://tinyurl.com/pzqxeu5), one characterized by an obsession with personal health. He knows his cholesterol level within 10 milligrams percent, and never goes more than 12 months without medical contact. It’s a bizarre, destructive trend.
    Tom Emerick, Fayetteville, AR

    Price Transparency Works. Even without cost sharing, a study group with access to cost information incurred 20% lower costs for labs and imaging than a group that did not. Evidence is piling up that when people can control their own funds, they do a much better job in spending the money wisely than any third-party payer has done in the past 50 years. Note that in the U.S. only 13% of total health spending is out of pocket, one of the lowest rates in the industrialized world (http://tinyurl.com/p5fm3xg).

    The reason we don’t have price transparency is third-party payment. It will only happen when consumers demand it, and they won’t demand it until they control the money.
    Greg Scandlen, Consumers for Health Care Choices

    The United Healthcare Model. United doesn’t care about humans, only numbers and making its CEO wealthier; it has a big stock buyback plan. Its history goes way back. Hillary Clinton hired United’s Lois Quam in 2008, right after the big Dept. of Justice derivatives lawsuit against it. United models our healthcare as if we were bots running through a stock exchange interacting with algorithms. It even fired Johns Hopkins, so that patients who bought their plan through an Exchange can’t go there.
    Barbara Duck, Orange County, CA – http://ducknetweb.blogspot.com/

    “Home Invasion” Clinical Evaluations. Now Medicare and commercial insurers are sending nurse practitioners into the homes of patients they identify as clinically complex to gather data and provide pseudo-care. Can they be sued?
    Craig Wax, D.O., Mullica Hill, NJ – http://ip4pi.wordpress.com

    Reward for Compliance. We have met the second annual White House deadline for EHRs. These cost me an extra 2–3 hours per day for 3 years. For more than 2,000 hours, we collected an extra $8,500. In the future, I will accept a 2%, 5%, and then 10% cut in Medicare payments—and keep patient records confidential.
    Del Meyer, M.D., Carmichael, CA

    Illness Generator. Evidence-based medicine (EBM) is a loaded gun pointed at clinicians’ heads. The drug industry and EBM set about legitimizing illegitimate diagnoses and then widening drug indications. The billion prescriptions a year in England, up 66% in one decade, do not reflect a true increased burden of illness or an aging population, just polypharmacy supposedly based on evidence. The drug industry’s corporate mission is to make us all sick, however well we feel. EBM screening programs are the combine harvester of well-being, producing bales of overdiagnosis and misery (http://tinyurl.com/qe8z6sz).
    Malcolm Kendrick, M.D., Macclesfield, England

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