AAPS News July 2015 – Medicare at 50


Volume 71, no. 7

Medicare, Title 18 of the Social Security Act, was signed into law by President Lyndon Baines Johnson on July 30, 1965.

A fundamental transformation of American medicine began.

So did the consequences that AAPS predicted from the outset: accelerating costs and government controls.

“The Medicare system has been a major catalyst in the destruction of our profession,” writes AAPS president Richard Amerling, M.D., who outlines the development of the regime of price controls (J Am Phys Surg, summer 2015). Government was pushing managed care as early as 1974 in the HMO Act. There is no evidence-based economics involved: price controls have consistently had the same dismal results for 40 centuries, explains Thomas DiLorenzo.

Medicare Is Not an Entitlement

Senior citizens constantly assert that they have a right to whatever they need from Medicare because they were forced to pay into it throughout their working lives. They were promised lifelong care—by politicians. However, in 1937 the U.S. Supreme Court found in Helvering v. Davis that Social Security, and by extension Medicare, was constitutional only as a tax, not as insurance (AAPS News, January 2011 and June 2011)—rather like the Affordable Care Act (ACA) as decided in NFIB.

“Even though the Medicare Part A card is labeled ‘Health Insurance,’ the [U.S.] Supreme Court held long ago that Medicare is not insurance, but rather a tax on one segment of the population to pay the bills for another segment,” explained the late Edward Annis, M.D., former AMA president. “Similarly, Social Security is a tax on today’s wages to pay a pension to those retired at age 65, or even at age 62. No insurance contract exists for either of these programs” (J Am Phys Surg, spring 2003).

When the program becomes insolvent, beneficiaries do not even have the right to line up as creditors in bankruptcy court.

It now seems inconceivable that Congress would ever decide that retirees do not have the right to claim the labor of other persons, even though they paid money—to someone else. But there is precedent—before the 1860s, slavery was legal, clearly constitutional, and widely rationalized. But it ended, after 620,000 soldiers died and the economy of the South was destroyed. Slavery came to an earlier, peaceful end in the British Empire, which levied taxes to compensate slave owners for loss of their “property.”

In lands with a Judeo-Christian heritage, slavery is understood to be evil. But we use a different word for taking an unearned share from the fruits of others’ labor. In 1935, opponents of Social Security called it “Socialism,” writes Leonard Kirschner, M.D., M.P.H. (“Happy Anniversary, SS, M&M, ADA, & ACA,” Round-up, Maricopa County [Ariz.] Medical Society, March 2015). In 1965, opponents called Medicare “Socialism.” ACA was signed into law on Mar 23, 2010. “I don’t believe I need to recount the battles leading up to the passage and subsequent battles to repeal and replace. Opponents, when not talking about ‘Death Panels,’ even called it ‘Socialism,’” writes Kirschner.

Socialism has gone down too. In the U.S.S.R., it took 75 years, and the legacy of destruction and misery continues.

An Escape Strategy

The Titanic could not be saved (AAPS News, October 2011). But denial prevailed when the “unsinkable” ship hit the iceberg. The first lifeboat launched with only 28 places out of 65 filled. It is thought that many people were reluctant to leave the ship, not believing that they were in imminent danger. The ship had enough lifeboats for only 33% of passengers and crew. This was legal because the requirement was based on tonnage, not passenger capacity. Still, 472 spaces were unused. Only nine people were plucked out of the water after the ship sank, and only six of them survived (http://tinyurl.com/pzd2uqc).

Medicare is effectively pitching patients and physicians overboard. Raymond Kordonowy, M.D., inventories 18 forces that work against patients, including an increase in claims denials—some automatic, some apparently random and arbitrary—and constant risk of “claims fraud” accusations due to impossible documentation requirements.

Joel Strom, D.D.S., of Doc Squads notes that dentists have three options: sign up with Medicare, opt out, or do nothing. With the first two, patients can get Medicare payment for oral biopsies, medications, sleep apnea appliances, etc. Despite being painted as the bad guy when patients can’t collect, he has chosen to do nothing, to avoid being captured by Medicare.

For patients, Parts B and D are beginning to look like a means-tested welfare program, writes Merrill Matthews (Forbes 3/26/15). Seniors can opt out of those, but are enrolled in Part A unless they forgo all Social Security benefits. One of the health sharing ministries, Samaritan Ministries International, allows Medicare-eligible people to participate if they have a moral objection to Medicare, shown by refusing Social Security. We are not aware of any insurance alternatives.

Medicare could be phased out for younger people, but if they put their “contributions” into a private account that they own, where will the money for current retirees come from? The nation arguably should compensate them, through taxes, for their prior involuntary payments. Socialist morality, however, seems to demand that everybody go down with the ship.


In his June 1950 inaugural address as president of the AMA, Elmer H. Henderson, M.D., said: “American medicine has become the focal point in the fundamental struggle which may determine whether America remains free or whether we are to become a socialized state.” He led a campaign that collected $3.6 million from American physicians to fight President Truman’s program for national health insurance—an “Old World scourge” that would “seriously endanger” the health of the New. He was a proponent of “private support for medical schools, to forestall possible Government subsidies, and of increased use of voluntary health plans.” He died in 1953 at the age of 68 (obituary in New York Times 7/31/1953).

AMA 2015

Resolutions from the 2015 annual meeting of AMA:

  • Assessing Older Physicians. In a vote without debate, AMA agreed to convene groups to plan how to assess the physical and mental health of older physicians, and evaluate their patient treatment. One-fourth of U.S. physicians are older than 65; they may need “help” in deciding when to retire.
  • No Informed Consent for Vaccines. AMA will deploy its lobbying power to help end religious and personal exemptions to mandatory childhood vaccines.
  • Transgender Soldiers. The AMA gave unanimous approval to a resolution stating that “there is no medically valid reason to exclude transgender soldiers” from military service. Current rules are “out of date with respect to the medical consensus about gender identity.” There are an estimated 15,000 transgender persons now serving. [In May 2014, the ban on Medicare coverage for gender reassignment surgery was lifted, and nine states are considering bans on insurance discrimination against such treatments. Most individuals spend $30,000 to $40,000 on the surgery.]
  • Silencing Dissent. The AMA will “look at creating ethical guidelines for physicians in the media, write a report on how doctors may be disciplined for violating medical ethics through their press involvement, and release a public statement denouncing the dissemination of dubious medical information through the radio, TV, newspapers, or websites.” The action was directed at “quack MDs” like Dr. Oz, half of whose recommendations are allegedly based on no evidence or contradict “best available science.” But actions include encouraging patients to file lawsuits or medical board complaints against doctors who promote something that “seems dubious” in the media. “Evidence-based” medicine is now an ethical imperative. “This is a turning point where the AMA is willing to go out in public and actively defend the profession,” said medical student Benjamin Mazer, who was involved in crafting the resolution (http://tinyurl.com/p8svgxz).
  • Public Health. Nine new policies include child-resistant packaging for energy drinks, labels on sunglasses stating level of UVA and UVB protection, labels on hand-held electronic devices using headphones or ear buds warning of dangers of using them in public because they impede hearing, addressing the epidemic of prescription drug overuse, setting minimum age for purchase of e-cigarettes at 21, and banning artificial trans fat in foods (http://tinyurl.com/ocyy6b7).


Can you opt out? Can you afford not to? Do it before spending $50,000 on ICD-10 and borrowing to survive the revenue loss during the transition. http://tinyurl.com/o8b7bzf

Proposed Amendment to the Bylaws

WHEREAS: The Association of American Physicians and Surgeons (AAPS) was founded in 1943 in order to defend and protect the patient-physician relationship and promote the highest possible ethical standards of private medicine; and

WHEREAS: These standards or principles are set forth in the official AAPS Principles of Medical Ethics, developed by and agreed to by its Members; and

WHEREAS: It is reasonable to require any candidate for leadership position in the AAPS to be familiar with and support the AAPS core principles and have some basic knowledge as to how the organization functions; and

WHEREAS: The Nominating Committee has been charged by the AAPS Board of Directors to select candidates for Officers and Board of Directors membership who meet all of the following requirements: (1) Membership in AAPS for at least four (4) years; (2) Attendance at a minimum of three (3) annual assembly meetings; and (3) Support of the AAPS Principles of Medical Ethics.

NOW THEREFORE BE IT RESOLVED: that Article III, Section 8, of the bylaws be amended by the insertion of the following sentence immediately after the sentence ending in “Secretary and Treasurer”: “The minimal requirements for all nominees, including nominations from the floor, for officers and board members (see Article VI, Section 2) shall be: (1) Membership in AAPS for at least four (4) years; and (2) Attendance at a minimum of three (3) annual meetings of the assembly; and (3) Stated support of the AAPS Principles of Medical Ethics.”

Resolutions, Nominations

Resolutions must be received by Aug 1 to be considered at annual meeting (send to [email protected]).

The Nominating Committee submits the following slate:
President-elect: Michael J. A. Robb, M.D., Phoenix, AZ
Secretary: Charles McDowell, M.D., Johns Creek, GA
Treasurer: W. Daniel Jordan, M.D., Atlanta, GA
Directors: Curtis Caine, M.D., Chattanooga, TN; Janis Chester, M.D., Dover, DE; James Coy, M.D., Lady Lake, FL; Robert Emmons, M.D., Burlington, VT; Kristin Held, M.D., San Antonio, TX; Caryl Hyland, M.D., Spanish Fort, AL; Kenneth Jago, M.D., Canton, GA; Thomas Kendall, M.D., Greenville, SC; and Tamzin Rosenwasser, M.D., Venice, FL.

AAPS Calendar

Oct 1-3, 2015. 72nd annual meeting, St. Louis, MO.
Sep 22-24, 2016. 73rd annual meeting, Oklahoma City, OK

♦ ♦ ♦
“G.K. Chesterton warned against ‘the modern and morbid habit of always sacrificing the normal to the abnormal.’ That is liberalism in a nutshell, and it will always find more things to sacrifice on its altar of abnormality.”
Joseph Sobran, Oct 10, 2000

Pain Doctor Acquitted

Dr. Joseph Zolot and nurse practitioner Lisa Pliner, indicted in 2011 on charges of overprescribing opioids to six patients between 2004 and 2006, were found not guilty by a jury. They faced potential consecutive sentences of 20 years on each count. Harvey Silvergate, a civil-liberties litigator, warns doctors not to take comfort from this “aberration,” which probably resulted from prosecutors’ failure to “flip” Ms. Pliner to get her to testify against her boss in return for leniency. The two share a special kinship: both came to America as Soviet refuseniks (WSJ 6/13-14/15).

A 2005 survey showed that only half of chronic pain patients are prescribed adequate pain relief. The government still declines to clarify prescribing guidelines, which it withdrew shortly before the trial of William Hurwitz, M.D. (ibid.). That trial was followed in AAPS News, February 2005 inter alia—see index at aapsonline.org/news.php.

Fraud and Audits

  • Record Enforcement Sweep. In the largest crackdown ever, 243 persons were arrested Jun 18 for $712 million in alleged false billings. (Wash Post 6/18/15). ACA appropriated an additional $350 million to enforcement efforts (USA Today 6/18/15).
  • 95% Conviction Rate. The Medicare Fraud Strike Force charged 353 defendants in FY 2014, obtaining 304 guilty pleas and 41 convictions at trial, with prison sentences averaging more than 50 months (BNA’s Health Care Fraud Report 5/27/15).
  • $70 Billion in Overbilling? For years, federal officials have waged a secret legal battle with UnitedHealth Group, the largest insurer in the rapidly growing Medicare Advantage industry, which collects more than $150 billion a year for treating 17 million patients. Officials noted that “risk scores” rose much faster for Medicare Advantage than fee-for-service patients, suggesting widespread gaming of the system (http://tinyurl.com/ojotj47). The “automated risk fiddlers” may have committed “said fraud” amounting to $70 billion over 5 years, writes Barbara Duck. CMS is re-running risk scores back to 2008. It is likely to deduct from future payments, and United is likely to take money from current claims to back charge old claims, an accounting nightmare for physicians (http://tinyurl.com/pjcl6wb).

Informed Consent Rolled Back

Traditionally, informed consent has been sacrosanct in drug trials, the only exception being when consent is impossible to obtain or contrary to a patient’s best interest. The 21st Century Cures Act, intended to expedite approval of new drugs and devices, adds a new exception for studies in which “the proposed clinical testing poses no more than minimal risk”—and it is not clear who gets to define “minimal risk.” Additionally, the bill gives hospitals a financial bonus for administering costly, unproven drugs, if “the public health would benefit from expansion” of their use. It would also encourage more use of surrogate markers, which might not reliably predict patient outcomes. For example, a new drug for tuberculosis was approved on the basis that it decreased bacterial counts in sputum, even though the patients’ death rate, mostly from TB, was four times greater than in the comparison group (NEJM 6/3/15).

Tip of the Month: At least one hospital threatened an AAPS member with loss of medical staff privileges if he opted out of Medicare, and demanded that he sign a statement promising not to do so. The physician questioned the basis for this. The hospital attorney reviewed the bylaws and policies and stated that there is nothing in the bylaws or policies that prevents a member of the medical staff from opting out of Medicare. The chief of staff confirmed that the physician was correct and that those who demanded the statement were wrong. He also said the physician would not be billed by the hospital attorney, and that there is no plan to change the bylaws to outlaw opting out of Medicare.

Physicians should check their bylaws for any language that precludes opting out, or wording such as “must be able to bill federal programs.” Such language constitutes a qualification to be on the medical staff, and should be in the beginning of the bylaws under qualifications. It should not be hidden away in a policy manual, which can be changed by the executive committee.

Expelled: for Warning about Health Risk

After a distinguished 30-year career on the faculty of Harvard Medical School and medical staff of Beth Israel Deaconess Medical Center (BIDMC), urologist Paul Church, M.D., was expelled from the staff for intra-hospital communications concerning risks of homosexual behavior. He also voiced the view that aggressive promotion of staff participation in “gay pride” events was contrary to BIDMC’s mission to promote public health and encourage healthy lifestyles. He was accused of “discrimination and harassment,” though no charge was made that he treated patients differently if they engaged in high-risk sexual practices.

An appeal hearing is scheduled for the end of July. He can at least be accompanied by an attorney, which was not previously allowed (http://tinyurl.com/oavgu69).

“Another shocking case of sham peer review,” writes Lawrence Huntoon, M.D., Ph.D. “Soon physicians ‘in the system’ will have to consult a politically correct App to determine what they can say in educating patients about unhealthy behaviors.”

The use of the Civil Rights Act of 1964 in ways never imagined by its architects is a basic device by which the Few rule the Many, writes Joseph Sobran. In most societies, the ruling elite shares the general moral outlook of the majority. But in today’s America, so alien to our ancestors, the Few not only hate the traditions of the Many, but conduct a relentless propaganda campaign against them (http://tinyurl.com/p4u2z5a).

Hospital Censors Newspaper

The University of Pittsburgh Medical Center has banned sales of the Post-Gazette, Pittsburgh’s major newspaper, in its gift shops because it doesn’t like certain stories, editorials, and cartoons, according to Steve Twedt.

Subjects included UPMC’s treatment of donor organs, its real-estate holdings, and disputes with Highmark. Twedt received the AAPS Shining Scalpel Award for his “The Cost of Courage” series, which detailed how hospitals often retaliate against physicians who speak out in an attempt to eliminate poor and unsafe care.

“Hospitals are becoming ruthless in their attempt to control everything from how care is provided to what information people are allowed to read in their hospitals,” writes Dr. Huntoon.


Still More Government Incompetence. Add the Transportation Security Administration (TSA) to the list of government agencies with an error rate greater than 90%. A covert test found that airport screeners failed to detect weapons and other prohibited items 95% of the time. The IRS has made it easy for identity thieves to access taxpayers’ information—more than 100,000 taxpayers have been exposed. And government-mandated electronic medical records have led to the compromise of millions of records.

The response to government incompetence is to give the bureaucracies more money. And when imposing “value-based” initiatives and “merit incentive programs” on physicians, the bureaucracies routinely exempt themselves.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY

Doctors Need to Act. Unless doctors start acting instead of just emailing, venting, and threatening slowdowns, nothing will change. How many have actually formulated a plan to opt out of Medicare and insurance? Most seem to be waiting for someone else to do the hard work and set the table for them. Opt out, set your own table, and invite your own guests. Third parties are not welcome at your table. If you wait, you will be the meal.
Steven Horvitz, D.O., Moorestown, NJ http://www.drhorvitz.com/

Not Required by Meaningful Use—Yet. From Nancey K. McCann, Director of Government Relations, ASCRS/ASOA: “I confirmed the requirements regarding ownership of guns, gender identity, going to church, etc.—are all part of the Office of the National Coordinator proposed rule for what EMRs need to be able to capture. There is no requirement included in the proposed Meaningful Use 3 proposed rule.” This Office is the government’s healthcare information technology central authority, also known as HealthIT.gov. This is a subtle distinction. Once in the requirements for the EMR, they’ll end up in MU eventually.
Jeffrey Liegner, M.D., Sparta, NJ

The “Unavailable Care Act.” If Mississippi expands Medicaid, most patients would be put in the “CAN” managed-care plans run by Magnolia or UnitedHealth. Most private physicians refuse to accept CAN because it so often refuses to pay after imposing a blizzard of paperwork on the physician to “preclear” treatment. The state cannot afford even the supposedly limited 10% expansion. We already see Washington backing down on commitments, as money is siphoned away to help offset cost increases in other programs brought on by fine-print ObamaCare requirements.
John Hey, M.D., Greenwood, MS

MU, PQRS, Etc. Unquestionably, the Medicare Access and CHIP reauthorization Act (MACRA or HR2) allows CMS to rank/score doctors using its own quality determination methods, and these scores will be used to adjust physician payment. Yet every single quality measurement the government has implemented recently has been an absolute disaster in practice.
Rocky D. Bilhartz, M.D., http://bilhartzmd.com

Intrusion Called “Research.” The 21st Century Cures Act, which just passed unanimously in the Energy and Commerce Committee (http://tinyurl.com/nqnptr5), defines health data research as part of health care operations. Thus, all health information will be accessible to government and corporate entities for any “research” related to public health or health care operations, including profiling, tracking, and analysis of patients and doctors. The bill prohibits EMRs from interfering in such research, and no consent (and no refusal) would be required (or allowed).
Twila Brase, R.N., Citizens’ Council for Health Freedom http://cchfreedom.org

Modern Medicine Loses Its Soul. In the Baconian paradigm, nothing matters that cannot be measured or quantified…. This [materialistic] approach has yielded…astounding benefits to mankind…. And as the material successes of biomedical science multiplied, the mechanistic metaphor was adopted by the practicing physician as well. Over the last 100 years, the medical profession, with the help of government, academia, and big business, has turned Western medicine into a “health care delivery system” where biological material is the input, and health the hoped-for output. Accordingly, the noble medical enterprise must now be pursued in the most efficacious, safe, efficient, and accessible manner. Standardization has become its prime mode of operation.
The only wrinkle, of course, is that the raw material under process is a person…. Ill-suited for the assembly line, that person is now protesting…. Meanwhile, the massive delivery system, wobbling on a foundation of faulty mechanistic assumptions, threatens to collapse at any time (http://tinyurl.com/ojnhfee).
Michel Accad, M.D., http://alertandoriented.com

EMR Destroying Medicine. Most doctors are now coding for pay. There are companies that make money deciphering ICD-10 and CPT codes. Doctors preoccupied with Meaningful Use don’t have time to conceptualize the patient’s case and communicate with others. Patients who want to see their record get a disjointed spreadsheet of lab data, not a coherent analysis of their condition.
Lee Beecher, M.D., St. Louis Park, MN

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