AAPS News January 2017 – Death, Taxes, and Entitlements


Volume 73, no. 1  January 2017

Now that they have no excuse, except lack of a filibuster-proof majority in the Senate, Republicans may renege on the promises that returned them to power, including repeal (not tweaking) of the [Un]Affordable Care Act (ACA).

Forgotten are those hurt by ObamaCare, as by losing their insurance, who voted the Democrats out. Repeal will hurt those who have become dependent on their ObamaCare privileges (“entitlements”), and they may vote the Republicans out.

As John Goodman explains, citing economist Robert Frank, “People view losses and gains asymmetrically. For example, you have to pay them twice as much to give up a coffee cup they possess as they would have paid for the cup in the first place. Even though the people who are benefiting from Obamacare probably didn’t vote for the people who gave it to them in the last few elections, they might well go vote against any politician who takes their benefit away” (http://tinyurl.com/gmdpfue).

And what will the government need in order to “give” benefits? Taxes, of course. Goodman’s plan, “The World’s Greatest Healthcare Plan. Ever,” being introduced by Rep. Pete Sessions and Sen. Bill Cassidy as the Healthcare Accessibility, Empowerment, and Liberty Act, explicitly does not repeal ACA taxes. Other  “replacement” proposals begin with repealing ACA, presumably including the $1 trillion in tax increases, but where will they get the revenue for their own subsidies (“tax credits”)?

One idea is to create a “piggybank” to set aside money that would be “saved”—i.e. not spent—by repealing ACA. “It’s not clear how or if such a maneuver would work,” writes Paige  Winfield Cunningham (http://tinyurl.com/jagtfgu).

The bill proposed by Tom Price would limit the amount of the tax exclusion for health insurance—the equivalent of a Cadillac tax on blue-collar workers (http://tinyurl.com/zjhdgkx). The Price bill would also restore the $800 billion that ACA cut from Medicare, states Goodman, whereas Paul Ryan’s “A Better Way” would keep these cuts in place and repeal the increase in the Medicare payroll tax on high earners.

Ryan, like the others, nonetheless promises to “protect” Medicare for today’s seniors and “strengthen” it for future generations—even though it is admittedly “unsustainable” (http://tinyurl.com/h6rt7mn). This magic will be done by phasing in improvements such as “quality reporting and paying for value.”

Why not say “mission accomplished”? Almost all congressmen voted for the Medicare Access and CHIP Reauthorization Act (MACRA) that is already making this monumental change. MACRA is essentially a mechanism for physicians to ration care. It “saves” Medicare by destroying it (see http://aapsonline.org/comments-on-final-macra-rule/).

Preventing Loss of Insurance          

Many Americans lost their insurance because it did not meet ACA requirements for “minimum essential coverage.” This provision can’t be repealed in budget reconciliation, which requires only a majority vote, because it is not recognized to affect revenue or taxes. Yet this misleadingly named mandate, which really means comprehensive coverage, is the most important driver of excessive costs and spending —and for relatively little benefit.

The single most important step to reform is to move away from comprehensive coverage as the single financing model. Routine expenses should be funded out of income; predictable expenses (including much end-of-life care) by savings and credit; and massive, unpredictable expenses by insurance (http://tinyurl.com/jjns5er). Failure of Republicans to understand this is one reason people will lose—drop— “insurance” if their taxpayer subsidies are withdrawn and coverage mandates continue.

Although it is claimed that 52 million Americans could be denied insurance without ACA (Wash Post 12/12/16), only a net 2.2 million gained private coverage during the first 2 years of full implementation, 2014-2015 (http://tinyurl.com/jco7wmj).

The Pre-existing Dilemma

To prevent a rise in “uninsurance,” the AMA and many Republicans demand that plans not discriminate against people with pre-existing conditions, though such plans are not insurance.

If ACA were repealed except for the popular pre-existing provision, its actual cost would become apparent, and the insurance market would collapse even faster, predicts Michael Cannon (http://tinyurl.com/ht5nudz). The ACA individual mandate, an idea first proposed by Republicans, needs to be harsher to force the 10% of the young and healthy persons who are in the small individual market to pay the huge costs of the chronically ill.

Some 80% of Americans have guaranteed issue in the group market (employer plans), Medicare, Medicaid, or the military, where it is less problematic because getting coverage is not the only reason to join the group. Before ACA, 35 states had high-risk pools, joined voluntarily by 225,000 of about 2-4 million eligibles. Even 4 million is “a safety net problem, not a reason to blow up the health insurance system for the other 98%” of Americans, writes Merrill Matthews (http://tinyurl.com/zyx9wet).

One way to end entitlements is as inevitable as taxes. U.S. life expectancy seems to be shifting downward. Dr. Gene Dorio writes: “In the past, more than 90% of my geriatric ICU patients eventually returned home.” Now many are steered prematurely to hospice, where treatment is stopped, sometimes without a doctor’s order or discussion (http://tinyurl.com/hwgarv2).


NEJM Article Attacks Tom Price

Thousands of progressive AMA members have signed a petition protesting AMA’s support of Dr. Tom Price to head the Dept. of Health and Human Services (HHS). Also, Sherry Glied, Ph.D., of New York University and Richard Frank, Ph.D., of Harvard wrote a scathing Perspective on him entitled “Care for the Vulnerable vs. Cash for the Powerful” (NEJM online 12/21/16, http://tinyurl.com/h8uj43m). Price is concerned about the economic well-being of physicians. He supports the right of physicians to balance bill Medicare patients and to negotiate with insurance carriers without violating antitrust laws. He wants to reduce regulatory burdens; repeal costly federal mandates such as ACA’s “essential health benefits”; block-grant Medicaid; allow interstate purchase of insurance. And he also supports other policies favored by AAPS. Glied and Frank contrast him unfavorably with former physician HHS secretaries Bowen and Sullivan, who greatly expanded Medicare and federal intrusion into medical practice. (Both were sued by AAPS.) These authors equate bigger government with care for the poor and health of the public.


VA Gives APRNs Direct Access to Patients

In final regulations billed as a victory for nurse practitioners, who have doubled in number to more than 200,000 in the past decade, the Dept. of Veterans Affairs is permitting full practice authority for advanced practice registered nurses (APRNs) to provide primary care and related services to veterans without clinical supervision by physicians. APRNs will be permitted to make diagnoses and initiate and manage treatment plans, including prescribing medications (http://tinyurl.com/hg7r6r3).

AAPS directors caution that such “physician extenders” are often mistaken for physicians by patients, who are not aware of the differing levels of training: “We believe it is in patients’ best interest to be informed of the qualifications of the clinicians who will be providing their medical care” and that “patients have the right to withhold consent to be treated by non-physicians” (see http://aapsonline.org/aaps-statement-philosophy-regarding-non-physician-clinicians/).


21st Century Cures Act

This Act, passed with bipartisan and AMA celebration, might be dubbed the “Beau Biden Cancer Moonshot Act.” Vice-president Biden’s son died of brain cancer in 2015. (Rep. Tom Price voted no because the bill creates a new mandatory spending program.) The bill allocates $1.8 billion for cancer research.

The Citizens’ Council for Health Freedom presented 12 reasons for “no” votes (http://tinyurl.com/gpke3st), including no consent for disclosure of patient data or its use in research; a new $80 million bureaucracy; a new, non-consented national neurological surveillance system, including genetic data; and the potential to reduce payments for noncompliance with protocols.


“Have you ever found in history, one single example of a nation thoroughly corrupted that was afterwards restored to virtue? …And without virtue there can be no political liberty…. Will you tell me how to prevent luxury from producing effeminacy, intoxication, extravagance, vice and folly?”

                John Adams, letter to Thomas Jefferson, 1819



Is your practice part of the Wedge of Freedom?

Is your doctor’s practice listed there yet?

See jointhewedge.com.

A Third-Level Ponzi Scheme

Most Ponzi schemes get stopped at the second level when the perpetrators are caught. Social Security started as a forced savings program (level 1). Affluent Americans would get lower returns, to help the poor, but each generation would pay for the people of that generation. Level 2: Congressmen spent the “contributions” to get re-elected, left IOUs in the “trust fund,” and used the payments of the second generation to pay benefits to the first. “Investment for retirement” was then called a “social contract.” Level 3 (deficit financing): In the wrecked economy, young people’s contributions are inadequate to fund the system, so Congress is borrowing money that will be repaid, if ever, by generations yet unborn (Access to Energy, November, 2016).


Economic Vital Signs

  • National Leveraged Buyout (LBO): The result of all the stimulus and low interest rates has been a financial engineering binge that has “strip mined upwards of $15 trillion of cash flow and balance sheet capacity from American business.” Capital investment for growth is down 35% since the turn of the century. The economy is weighted down by $35 trillion in excess debt (David Stockman’s Contra Corner 11/23/16).
  • Tax Collections Slump: In the last quarter of FY 2016, federal tax receipts of $797.9 billion were down by 0.5% compared with the same period in 2015. Adjusting for 2% inflation means an economy “sinking below flat line” (Contra Corner 10/18/16).
  • Default as Policy: For 35 years, the official U.S. fiscal policy has, in effect, been default on debt. The sacred inflation totem of 2% annually means that in 30 years investors would get back 54.5 cents in inflation-adjusted money per dollar of principal on a U.S. Treasury long bond. “The Fed is an engine of default and random redistribution…that is destroying the savings function, which is the ultimate engine of capitalist prosperity” (Contra Corner 9/2/16).
  • World Governments Should Default: Governments of the U.S., Japan, Europe, and dozens of other countries have a gigantic mortgage on their next two or three generations. The EU lacks the power to tax, but the European Central Bank has the power to print. The euro is doomed, writes Doug Casey. “It’s better to have a controlled demolition, rather than waiting for [the overleveraged and unstable] financial system to collapse unpredictably” (http://tinyurl.com/z339x9h).
  • Work Force Dropouts: In the 1960s, nearly 100% of men between the ages of 25 and 54 worked. Now only 88% do. One in six prime-age men has no job and is not seeking work—it’s worse than in the Great Depression (Contra Corner 9/9/16).


AAPS Calendar

Jan 27, 2017. Thrive Not Just Survive XXV, Orlando, FL.

Jan 28, 2017. Board of Directors & FL chapter, Orlando, FL.

Oct 5-7, 2017. 74th annual meeting, Tucson, AZ.


Physicians Oppose Mandatory Vaccines

Physicians for Informed Consent (PIC) was founded recently in response to California’s SB277, the most expansive mandatory vaccine law in the U.S, which eliminates all non-medical exemptions.

In addition, the Medical Board of California gained increased authority to investigate complaints that physicians may not be following the standard of care with regard to this bill and ABX2 15, the End of Life Options Act.

Most physicians are not well-informed on how to evaluate patients for medical exemptions, states founder Shira Miller, M.D.

PIC (physiciansforinformedconsent.org) has provided information about SB277 to more than 300 families, and more than 100 hours of legal guidance to physicians. According to its Dec 20 press release, “PIC is committed to protecting the rights of parents to make medical decisions for their children, and safeguarding doctors’ professional responsibility to act ethically and in the best interests of their individual patients.”


Facts on Out-of-Network Billing

More state legislatures are considering bills like California’s AB72 on “Surprise Billing” (see AAPS News, November 2016). The Florida College of Emergency Physicians (FCEP) is urging policymakers to first investigate reimbursement policies of insurance companies. “The few balance bills that exist in Florida result from unwillingness by insurers to contract for fair and reasonable payment to medical providers, such as emergency physicians,” stated Rebecca Parker, M.D., president of the American College of Emergency Physicians (ACEP). Four out of five big insurers have been sued for illegally manipulating what is deemed “usual and customary” medical charges, which determine what they are obligated to reimburse. For the 12% of Florida emergency patients who were treated out of network, the average amount paid by a patient was $49 (http://tinyurl.com/hsm3gd4).

Texas Medical Association president Don R. Read, M.D., explains the reason for surprise bills: “That’s what insurance companies want to happen. It’s part of their business plan: make their insurance look valuable.” They want their networks to be small so that patients have to get care out of network. The insurer pays less, and the patient pays the balance; but policyholders aren’t told that. They think their insurance covers all types of care. In Texas, 45% of ACA networks are rated as “x-small” and 27% as “small” by the University of Pennsylvania (http://tinyurl.com/jtmvf9a).


Worst HIPAA Enforcement in 2016

Fines and settlements ranging from $750,000 to $5.5 million plus corrective action plans were imposed in 2016 (http://tinyurl.com/jdfovkd). The violations included:

  • Failure to have a signed business associate agreement on file;
  • Failure to complete a thorough risk assessment;
  • A default setting on a file-sharing application that permitted public disclosure of patient data;
  • Theft of unsecured laptops and an unencrypted thumb drive (one laptop was apparently stolen from an ICU by a visitor);
  • Third-party access to a business associate’s network.

   If a covered entity has the data, it is liable if criminals gain access, as well as for failure to comply with all rules.


Can Feds Mandate Harmful Treatment?

Still pending at the time of this writing is a decision by U.S. District Judge Reed O’Connor in Franciscan Alliance v. Burwell (see AAPS News, October 2016). This challenges the Obama Administration’s mandate that physicians provide transgender treatment to children who desire it, even if the physician believes it would harm the child. The rule is estimated to cost $1 billion, and Medicare and Medicaid will not cover it because HHS experts found the risks were often too high and the benefits too unclear (http://tinyurl.com/j2r6jxu).

Even for those who favor life-changing, irreversible treatments to transgender minors, there is the issue of federal agencies overriding physicians’ medical judgment, placing them in the dilemma of prescribing treatment they believe to be harmful or facing potentially devastating financial loss or even professional ruin.


Licensing Reciprocity in Maryland

Maryland passed Senate Bill 1020, which could serve as a model for expediting licensure in multiple states, without the Interstate Medical Licensure Compact promoted by the Federation of State Medical Board, which has yet to issue a license. It is short and simple and requires Maryland to issue a license to a physician in good standing in another state with substantially similar licensure requirements if that state offers a  similar reciprocal licensing process for Maryland physicians (http://tinyurl.com/gskuoop).


Prescription Drug Overcharging Challenged

The seventh lawsuit in seven weeks was filed accusing insurers and pharmacy benefits managers of adding secret, unauthorized fees to prescription drug sales. Watson v. OptumRX (C.D. Cal., No. 8:16-cv-02106) is a potential class action. The lawsuits claim that if a prescription drug costs less than the copayment, insurers including United Healthcare, Cigna, and Humana “claw back” the difference through a hidden scheme. OptumRX allegedly forbids pharmacists from disclosing this arrangement to patients, or informing them of cheaper alternatives such as paying retail without using their insurance (BNA’s  Healthcare Fraud Report 12/7/16).


Planned Parenthood Referred for Prosecution

On Dec 13, the Senate Judiciary Committee wrote to FBI Director James Comey and Attorney General Loretta Lynch, referring Planned Parenthood Federation of America and several of its business partners for criminal prosecution. When Planned Parenthood national became aware that its affiliates were operating their aborted baby body part programs in violation of Planned Parenthood’s own guidelines, Planned Parenthood covered up for the affiliates and deleted the guidelines, according to the report of the Committee’s investigation. The House Energy and Commerce Committee referred PP Gulf Coast to the Texas Attorney General, citing videos made by the Center for Medical Progress.

Sen. Charles Grassley (R-Iowa) writes: “[T]he facts uncovered raise a reasonable suspicion that these organizations, and/or individuals employed by them, may have engaged in a conspiracy to violate federal fetal tissue law (18 U.S.C. §371)” (http://tinyurl.com/zm6vask).



MOC and Physician Burnout. AAPS has been exposing and opposing the Maintenance of Certification/Maintenance of Licensure (MOC®/MOL) scam for years. Now that the groundswell of anger from physicians on the frontlines can no longer be ignored or managed with yoga and deep breathing exercises, “mainstream” organized medicine has broken its silence. In a “Live Well” letter to members, the president of the American Academy of Neurology (AAN) has recognized the contribution of MOC to physician burnout—of which neurologists have one of the highest rates.

An editorial in the Nov/Dec issue of Practical Neurology, entitled “MOC and Physician Burnout: Treating the Cause, Not the Symptoms” (http://tinyurl.com/z2sh2lf), recommends “removing effort-consuming tasks, which do not contribute to revenue generation, quality of practice, or patient satisfaction.” It notes that: MOC is costly and of unproven benefit; MOC is highly profitable to specialty boards, e.g. the American Board of Internal Medicine (ABIM), which transferred $6.5 million overseas in 2014; and private payers that require physician participation profit from MOC.

AAN and other medical organizations need to fight the MOC disease at its core by promoting laws that prevent discrimination against physicians who do not do MOC. It should also promote opting out of Medicare and third-party arrangements, which cause most of the burnout-producing stresses.

Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


False Advertising. According to a taxpayer-paid ad from “Bess Evans, The White House,” 72% of Americans who get insurance from Healthcare.gov in 2017 “will be able to find a plan for less than $75 a month.” This is a planned, purposeful, absolute, outright lie. Remember that ObamaCare was the largest tax increase in American history, and was sold by deceit. We must fully repeal this lie and the unconstitutional burdensome taxes.

Craig Wax, D.O., Mullica Hill, NJ


Resistance to Repeal. Politicians are less concerned about government’s intrusion into the lives of millions of Americans than about the loss of $1 trillion in tax revenue. They are addicted to spending money we don’t have on pet projects that help get them elected. Doctors must not abandon their ethical commitment to patients in order to collect a government-guaranteed paycheck.

Robert Sewell, M.D., Southlake, TX


75% Are Losers. Only one-quarter of 333 accountable care organizations got a bonus payment in 2014 (WSJ 6/1/16).

Louis P. Kartsonis, M.D., San  Diego, CA


What Happened to Clinical Skills? As a retired physician and now a patient, I am encountering an insane system. For example, no one took a history from me when my chief complaint was shortness of breath, and the ER physician did not do a physical examination. In another ER, the history I gave was not what the PA put in the record. A friend I accompanied to the ER for frequent severe migraines was told to take more Motrin and was designated a “frequent flyer” in the medical record; her insurer was billed $1,100. We need to go back to “unmanaged care.”

Linda Wright, M.D., Phoenix, AZ


Here’s Where the MACRA Millions Have Gone. A “Dear Healthcare Professional” letter fresh from the AMA is headed: “MACRA has raised questions. The AMA has answers.” Its Payment Model Evaluator will help you in navigating payment models—choosing your pace of participation, how much data you will report in 2017, and which payment system works best. This did not drop out of the sky. It has been in the works for some time.

Any sensible person reading the Dec 25 Medical Economics article (http://tinyurl.com/z9f2ldp) about “the biggest thing that’s hit healthcare payments in a generation” (MACRA) would conclude that the burdens are utter nonsense. I feel my chest tighten as if I am being strangled, but the Quest spokesperson said physicians just need to get with the program. By the way, the value-based score will follow the doctor for 2 years, making it harder to seek employment or obtain credentialing.

Melinda Woofter, M.D., Granville, OH


Don’t Cry for the Insurers. Practicing insurance law, defending insurers, I learned that they always find a way to make money. Their business is making products for people to buy and not use.

Marilyn Singleton, M.D., J.D., Redondo Beach, CA


There Is Nothing to Recommend ACA. Trash it. Stop this talk about covering already known and established medical conditions.  It destroys the foundation of insurance. People with established conditions have to pay more—no free lunch taking money from the healthy. A safety net would use appropriate general funds.

John Dale Dunn, M.D., J.D., Brownville, TX


Abdication of the Legislature. The day the Final Rule for MACRA was handed down, CMS acting administrator Andy Slavitt tweeted: “@kksheld We listened to you.” I find nothing to support Slavitt’s claim. I find only more unprecedented stated intent to legislate via executive agency rule-making. The rule repeatedly says, “We will address x, y, and z in future rule-making.”

Kristin S. Held, M.D., San Antonio, TX

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