And what better cover than the appearance of accommodating opponents by a year’s delay in the employer mandate, suggests Lee Vliet, M.D.
Even if the [Un]Affordable Care Act (ACA) is ultimately repealed, it has already accomplished much of its purpose, writes AAPS Director G. Keith Smith, M.D.
Recruitment
The Administration is looking far and wide for help in encouraging enrollment: actors, NFL football players, baseball players, librarians, mayors, city councilmen, AARP members. The Department of Health and Human Services (HHS) is making available $54 million in grants to the navigators provided for in §1311 of ACA. The Los Angeles Unified School District will get $990,000, and the Univ. of Calif., $1.25 million. Planned Parenthood is on a long list of organizations, many of which are described as “community organizers,” to get a grant.
Navigators will have ready access to information in the federal Data Hub—without need for a background check. The Hub has been called “web-based, one-stop shopping for prying into people’s personal affairs.” The system is ripe for fraud and abuse, privacy violations, and identity theft, stated Rep. Diane Black (R-TN) (LifeNews.com 7/25/13).
While insurance agents and brokers might be qualified to perform the function, no one will be allowed to profit by signing up people for specific plans. To become a navigator requires just 20-30 hours of online training. Intense competition is expected for the jobs, with pay estimated at $20-$48 per hour. (Washington Post 4/10/13).
Providing information in a “culturally and linguistically appropriate manner to the population being served by the exchange” is one of five main duties. Specific populations are targeted, as on Spanish-language radio.
Along with smaller websites, ehealthinsurance.com has functioned as a health insurance exchange for a long time. But states have backed off from commitments to include such private exchanges in the mix, at least at the start.
On July 2, the Obama Administration created “one of the broadest and deepest advertising networks they could have imagined” to spur enrollment in the exchanges, according to Douglas Holtz-Eakin: employers. (Galen.org 7/9/13)
Delaying the Employer Mandate Until Post Election
Strictly speaking, the Administration is not exactly postponing the employer mandate, but rather the data submission requirements needed to enforce it. This includes information on who is offered health coverage, who declines it, the price at which it is offered, and the employee’s pay. “We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments…. Accordingly, … these payments will not apply for 2014.”
The delay applies to insurers also. Without this information from employers and insurers, the IRS will not be able to prove that an individual did not obtain coverage. But the Administration has not chosen to explicitly extend the same logic to delay individual responsibility payments (Robert Book, Forbes 7/8/13).
Likewise, the government will not be able to verify eligibility for subsidies. So it will simply accept attestations about income: the “honor system.” There is the potential for a later clawback, but this is not available for those who do not file a tax return. The Administration is “deliberately encouraging tens of billions of dollars in waste, fraud, and abuse” to enroll enough Americans to make repeal politically impossible (Avik Roy, Forbes 7/6/13).
With this “deviously brilliant” two-pronged move, “there is an unambiguous incentive now for employers to stop providing health insurance, prepare to pay the penalty, and send their employees to the exchanges instead,” writes Holtz-Eakin. “They now have a year to make the transition.”
Effects on Employment and Insurance
The one-year delay will not affect the perverse incentives of the employer mandate: (1) to hire fewer full-time workers; (2) to offer “unaffordable coverage” for which penalties are lower; (3) to hire illegal immigrants or workers from high-income families who are not eligible for subsidies. The ACA tags low-income workers with a scarlet “S” for subsidies that lead to employer penalties (Avik Roy, Forbes 7/11/13). The U.S. is becoming a “part-time nation,” as employers scale work weeks back to 30 hours, or even 25 hours to provide a cushion. The largest labor unions are complaining that ACA is shattering not only their health benefits but also “the 40 hour work week that is the backbone of the American middle class” (Galen.org 7/24/13).
If enough employees drop out of plans, the employment-based system may collapse because of inability to meet insurers’ minimum-participation requirements (R. Book, Forbes 7/12/13).
Obama’s hostile takeover of health insurance is also taking down industry and medicine, and its selective enforcement threatens the rule of law: a signature achievement indeed.
New York: Triumph, or Warning?
According to the Jul 16 NY Times, the health plan cost for New Yorkers is set to fall 50%. “This demonstrates the profound promise of the Affordable Care Act,” states Elisabeth Benjamin of the Community Service Society of New York.
What the ACA does is to make the NY insurance market marginally less insane. Its combination of guaranteed issue with no mandate left it with only 17,000 individual policies in the entire state. Standard HMO rates for an individual are currently about $1,500/month in Manhattan! So now ObamaCare—with its guaranteed issue and trivial mandate—may bring that premium down to “only” $500-600/month. And it will hide that still-very-large number from those who are eligible for subsidies. So while the per-patient subsidy tab to the federal government will be huge— much, much larger than in other states, “all these rosy Obamacare assumptions in New York and elsewhere are based on one of the underlying and more dubious premises [that] those in adequate-or-better health making in the range of $2,000 per month will actually pay as much as one month’s income for health insurance,” writes Robert Hertzka, M.D., past president of the California Medical Association.
“The health law’s success rests on the young,” write Christopher Weaver and Louise Radnofsky (WSJ 7/25/13). But it removes the incentive to buy coverage as a hedge against later denial for a pre-existing condition, writes Andrew Puzder (WSJ 7/21/13). With the “firewall” of the employer mandate gone, and the individual mandate possibly unenforceable as well, “there is nothing to prevent an upward spiral of premiums, higher taxpayer-funded subsidies, and more people being uninsured,” writes Robert Book (Forbes 7/12/13).
At present, almost one in three workers under 30 decline employer-sponsored coverage, and one in four people eligible for Medicaid don’t sign up, writes John Goodman (Forbes 7/10/13).
ObamaCare Accomplishments
- Hiring Freeze: 41% of small businesses aren’t hiring. That’s the only way to control costs when the government tells you what the cost of an employee must be, writes Herman Cain.
- Taxing the Poor: The excise tax on “Cadillac” plans reduces the tax subsidy from 51% to 11% on higher-income workers’ health insurance benefits, while lower-wage workers see their discount coupon converted into a 25% penalty (Chris Conover, Forbes 6/5/13).
- Individual Insurance Cancelled: Persons who planned to keep their catastrophic insurance and pay the tax are getting cancellation notices from their insurer. Tens of thousands of such notices have been sent (John Goodman’s Health Policy Blog). “The individual market is gone,” writes Ralph Weber.
- CBO Estimates “Twice as Wrong”: The employer mandate was supposed to supply $10 billion of the $48 billion needed to expand coverage in 2014. Our ability to calculate the error in CBO estimates is limited by inability to predict selective enforcement, writes John Graham (Forbes 7/27/13).
AAPS President Featured in Wall Street Journal
Our president, Juliette Madrigal-Dersch, M.D., of Austin, TX, gets top billing in a Jul 28 feature in the Wall Street Journal entitled “More Doctors Steer Clear of Medicare.” An online slide show of Dr. Madrigal’s third-party-free practice is included.
Dr. Madrigal treats cancer patients free. “I couldn’t do that if I took Medicare. It’s considered an illegal enticement.”
CMS told the WSJ that in 2012, 9,539 doctors were opted out of Medicare, compared with fewer than 4,000 in 2009.
1814 All Over Again?
In 1812, Congress decided to do something very expensive—without enacting taxes to pay for it. Left undefended, the White House was burned to the ground by the British (Martin Merritt, Physicians Practice, 7/14/13).
Obama Taxes and Subsidies
Buried deep in ACA is the fact that in 2018, subsidies for private health insurance are going to increase at the same rate that Medicare spending will supposedly be allowed to grow—slightly faster than national income. Yet insurance premiums will likely grow twice as fast as workers’ income, states John Goodman (Townhall.com 3/16/13).
If total worker compensation is considered, those who work for a small firm and get a subsidy will have a net cash income 143% more than those who work at an identical job in a large firm subject to the employer mandate (Chris Conover, Forbes 7/17/13).
ACA contains 21 tax increases, about half of them targeting households that earn less than $250,000. The increase currently estimated by the Joint Committee on Taxation, $1.058 trillion, is double its original 2010 estimate of $569 billion (Economic Policy Journal 3/13/13).
Declaration of Surgical Independence
Referring to Principles of Surgery and of Common Sense, classically trained surgeons have issued a Declaration concerning the obligation to alter or to abolish forms of education that are destructive of patient care (Leo A. Gordon, M.D., General Surgery News, July 2013). Governing bodies of education, they complain, have “obstructed the orderly flow of patient care” and made surgeons “dependent on the will of the compliance officer,” among many other abuses.
AAPS Calendar
Aug 10. Thrive Not Just Survive XVIII, Minneapolis, MN.
Sept 25-28, 2013. 70th annual meeting, Denver, CO.
ACTION OF THE MONTH
Invite a medical student to our 70th annual meeting in Denver.
Full scholarships are available!
Apply at http://aapsonline.org/scholarship.
Like King James II, President Suspends Law
A key grievance that lead to the Glorious Revolution of 1688 was King James II’s assertion of the monarch’s absolutist right to dispense with parliamentary statutes that he disliked. The very first provision of the English Bill of Rights of 1689—the most important precursor to the U.S. Constitution—declared that “the pretended power of suspending of laws, or the execution of laws, by regal authority, without consent of parliament, is illegal.”
Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.”
“With the exception of Richard Nixon, whose refusals to spend money appropriated by Congress were struck down by the courts,” writes former U.S. Circuit Court judge Michael McConnell, “no prior president has claimed the power to negate a law that is concededly constitutional.” He notes that ACA’s employer mandate contains no provision allowing the President to suspend, delay, or repeal it (WSJ 7/8/13).
Attorney Lawrence Joseph filed a notice of supplemental authority in AAPS v. Sebelius concerning this issue.
Updates on NPI and Opting Out
Lawrence R. Huntoon, M.D., Ph.D., supplies the following information from MLN Matters Number SE 1311:
CMS has finally clarified that “physicians/non-physician practitioners [NPPs] who have never enrolled in Medicare are not required to enroll in Medicare before they can opt out of Medicare” (p 3). If you have not billed Medicare for more than 12 consecutive months, your Medicare number is deactivated and you have the same status as not being enrolled in Medicare. Certain physicians and NPPs who enroll only for the purpose of ordering and referral are exempt from the 12-month deactivation rule (Number SE 1034).
A physician need not have a National Provider Identifier (NPI) to opt out; however, if a opted-out physician orders anything for a Medicare patient or refers a Medicare patient, the contractor must require the physician to supply not only an NPI but birth date and Social Security number as well. Dr. Huntoon notes that these two items are all that is needed to commit identity theft.
Requiring an NPI to fully practice medicine for patients enrolled in Medicare is the equivalent of a federal license, Dr. Huntoon writes, although there is no federal authority to create such a license—that is a function of the states, and this usurpation is forbidden by the Tenth Amendment to the U.S. Constitution.
Lack of an official CMS affidavit form has led some Medicare contractors to make up their own requirements for opting out, and to refuse to process a physician’s opt-out affidavit unless an NPI is supplied—despite a clear statement in MLN Matters that an NPI is not required.
“If Medicare regulations governed shoe-tying, we would all be required to walk with shoelaces of one shoe tied to the other.”
♦ ♦ ♦“The patient is no longer the patient; the government is the patient…. The person on the examining table is now just a game piece, like the Monopoly thimble, moved around…as an excuse to grow the government’s power.”
Richard Maybury, Early Warning Report, June 2013
RAC Audits Cost Hospitals Millions
In 2010–2013, Recovery Audit Contractors’ denials of hospital claims worth $157 million were overturned on appeal. Some 72% of completed appeals favor hospitals; 75% of RAC appeals are still incomplete. A majority of hospitals (63%) spent more than $10,000 in first quarter 2013 responding to RAC requests, and 10% spent more than $100,000. Medical records requests increased from 721,000 in the last quarter of 2012 to 1 million in first quarter 2013 (BNA’s HCFR 6/12/13).
Billings Clinic in Montana told the Senate Finance Committee that it pays internal staff about $240,000 per year to manage RAC audits and appeals, plus $500,000 to an outside contractor to help with medical necessity reviews (HCFR 7/10/13).
Extrapolation Audits on the Rise
Now that the HHS Office of Inspector General has joined the RACs and the zone program integrity contractors (ZPICs), extrapolation audits, which apply the error rate found in a sample of your claims to all of them, are on the rise, because of the huge potential recovery rate. A $10,000 overpayment in a claims sample can be extrapolated to $10 million. Be aware that a pattern of ignoring documentation requests can open you to a highly invasive ZPIC audit (Medical Practice Compliance Alert 6/24/13). If hit with an extrapolation audit, a practice is well advised to hire a statistician to examine the sampling process (MPCA 7/7/13).
Risks of Cloud-based Electronic Medical Records
Since providers are ultimately responsible for HIPAA violations, they must audit vendors’ performance. For example, ask how the vendor segregates data from various providers to prevent “domino destruction” or “data peeping,” and how it disposes of data at the end of the contract (MPCA 6/24/13).
Correspondence
More Medicaid Fraud in New York. State officials suspended enrollment in New York’s largest managed long-term care plan for frail elderly and disabled people. Investigators are examining relationships with social adult day care centers that were providing incentives, such as free casino visits or food, to get customers to sign up. What the day care centers received in return remains to be discovered. It’s like watching someone peel back the layers of an onion. More and more fraud is being exposed.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY
ObamaCare as a Black Ops Mission. Despite ObamaCare’s promised transparency, Health and Human Services is the most secretive department in the government. The new rules are a huge black box secret. HHS does not provide coherent answers to questions by a congressional oversight committee. HHS has insurance premium filings for the 34 federal exchanges, but it decreed in a May memo that it would keep them secret until September. Could it be trying to conceal the coming rate shock?
The CBO initially estimated that all the exchanges would cost $5–$10 billion to set up, but California alone has already spent $900 million. The Administration is diverting funds from other federal health problems to help pay for the 100 key activities necessary to set up an exchange; cost overruns are not in the budget.
Another hidden tax: employees who buy insurance on the exchanges will have to buy it with after-tax dollars; before ObamaCare their employers bought it with pre-tax dollars.
Stanley Feld, M.D., Dallas, TX http://stan.feld.com
No Right to Keep Prices Low. A funeral parlor operator is suing the state of Minnesota over the requirement to have a $30,000 embalming room. (Most chains do their embalming at a single site or outsource it.) This would force him to pass the cost along to clients, who can now have a simple funeral for $250—a price that his competitors don’t like at all. Glenn Garvin calls the requirement “a license to kill—competition.” Garvin points out that in the 1950s only one in 20 Americans needed a government permit to do his job. It is now one in three, and growing constantly (Miami Herald 3/11/13). Apply this to the certification of professionals by “nonprofit” and non-governmental companies. Why do we need everything done twice to exclude competition? Those with the certificates require everybody else to support them. The haves tax the have-nots! Medicine is so expensive because everything that touches the patient requires a certificate or two on top of licenses.
Paul Kempen, M.D., Broadview Heights, OH
Gatekeeper Model v. Free Market. Among those in need of remedial free-market training is Dr. John G. Harold, president-elect of the American College of Cardiology, who reportedly said: “Patients are doing [chelation therapy for coronary artery disease] with or without our permission, so it’s important to test.” Permission? Perhaps he meant “blessing,” which is altogether different. I think that patients resent the physician as “permission-giver” even more than physicians resent insurance companies that play this role. How do patients feel about having to come to the office to get permission to refill their blood pressure medicine? Not only do they have to pay for the medicine—they also have to pay for permission to pay for the medicine! Most physicians today, like the academicians who taught them, seem to embrace the paternalistic gatekeeper model. But I suspect that with the free market at work, physicians seeing themselves as “permission granters” would have empty waiting rooms.
G. Keith Smith, M.D., Oklahoma City, OK
Medicare for All. The idea of universal Medicare is absurd. There are separate deductibles, copayments, premiums, and coverage gaps for each of Parts A, B, and D. There are no limits on out-of-pocket spending. This terrible program is “popular” only because nothing else is available to the elderly and it is heavily subsidized by the “rest of us.” If it were universal, there would be no rest of us to pay for it. Anyone who advocates this idea should be given the Medicare shoppers’ guide for a couple of hours and then be required to pass a quiz on what is and what isn’t covered. Failure to pass would mean a lifetime sentence of silence on reform ideas.
Greg Scandlen, Consumers for Health Care Choices
“Public” vs. “Private.” People on the left are so obsessed with “public” vs. “private” and “nonprofit” vs. “for-profit” that they forget that most government programs are managed by private companies, for-profit more often than not. About 70% of Medicaid enrollees are in privately owned plans, and the rest are mainly being managed by private companies.
John Goodman, Ph.D., National Center for Policy Analysis
Luring Away Our Patients. When patients are discharged from our hospital’s emergency room, they get a handout promoting “MyCare.” This is introduced by Texas Health Resources and “select” [read “our”] physicians. Patients receive a temporary password. To use the services, they have to quit their physician and sign up with one of the group. A few decades ago, this would have been considered an unethical attempt to steal patients.
Wayne R. Porter, M.D., Terrell, TX
