AAPS News September 2010 – Doctors Taxed Enough Already


Volume 66, no. 9

The first Doctors’ TEA Parties spanned the nation on Saturday, Aug 7, calling for the repeal of ObamaCare, and telling the nation that in endorsing the Patient Protection and Affordable Care Act (ACA), the AMA does not speak for physicians.

The largest event, in San Diego, which attracted a crowd of 750 to 1,000, was organized by AAPS members Wayne Iverson, M.D., an internist, and Adam Dorin, M.D., an anesthesiologist. Internist Alieta Eck, M.D., spearheaded the New Brunswick, N.J., event, and AAPS president George Watson, D.O., the one in Kansas City, Mo. (www.doctorsteaparty.us). The smallest event may have been seen up close by the largest number of people. AAPS past president Tamzin Rosenwasser, M.D., gathered a small group with signs on a busy street corner in Valparaiso, Ind., near the Porter County Courthouse. An estimated 6,000 people saw them from passing cars. Of a steady stream of pedestrians, about half would converse; all but three or four were on our side.

Who’s Out of the Mainstream?
Some of the leftist media’s coverage refers to tea partiers in general as a “fringe” group, and their protests as a fad. In contrast to some “outrage” at the interim AMA meeting in Houston, the mood at the annual meeting in Chicago was described as “passive,” as we move into the implementation phase.

A JAMA commentary states: “Antagonism to reform in the months, even years, after it is enacted is often fierce and vitriolic; but is has a half-life” (Fox DM, Markel H. JAMA 2019;303:1749-1750). In 1965, AMA leaders managed to placate members who took the “extreme” position of proposing to boycott Medicare—then many of them became accustomed to the financial benefits.

This time could be different. According to a Rasmussen poll, 70% of “mainstream voters” believe that ACA is bad for the country (Consumer Power Report #233, 8/5/10). And in Missouri, more than 70% of the voters favored a proposition that would prohibit the government from requiring residents to buy coverage or penalizing them if they don’t. Missouri State Senator Jane Cunningham, who led the effort, spoke in San Diego. Freedom of Choice in Health Care Acts have also been enacted in Virginia, Georgia, Idaho, and Louisiana, and have been proposed in 36 other states (Inside ALEC, July 2010).

Some 120 North Carolina physicians have opted out of Medicare since January 2010, and AAPS member Leah McCormack, M.D., now president of the Medical Society for the State of New York (MSSNY), plans to terminate all Medicare and managed-care contracts as soon as possible (AM News 7/19/10).

In San Diego, AAPS director Richard Amerling, M.D., encouraged physicians to sign the Physicians Declaration of Independence, and patients to find a doctor who will care for them without relying on government. He pointed out the nearby cancer survivor’s park: something not to be found in Britain or Cuba.

ObamaCare is a wrecking ball for American medicine, he said, and the medical profession is the last line of defense against the state rolling over individual rights. The clearest indicator of the Administration’s intentions is the recess appointment of the socialist technocrat Donald Berwick to head Medicare.

Though Berwick finds the British National Health Service (NHS) to be “such a seductress,” the NHS is undergoing “its most radical reorganization…since its inception in 1948”—in a direction opposite to Berwick’s. The idea is to shift control of medical decisions from a centralized bureaucracy to doctors and patients. “Liberating the NHS,” explained health secretary Andrew Lansley, would permit a radical simplification and the removal of layers of bureaucracy. Opponents of the change said that putting doctors in charge would be “like getting your waiter to manage your restaurant” (NY Times 7/24/10).

The NHS is also cutting joint replacements, cataract surgery, and services to dying cancer patients (Telegraph 7/24/10).

“The labor unions and the bureaucrats are…apoplectic about the loss of some of the bureaucratic jobs that have swallowed up most of the money from a tripling of the NHS budget since 1998, writes Grace-Marie Turner (NRO 7/27/10), who spoke in N.J.

In San Diego, Sharron Angle, who is running for Harry Reid’s Senate seat, called for ousting incumbents and limiting the reach of government. Iraq veteran and congressional hopeful Nick Popaditch commended doctors who were able to take a blind man (me) to a sighted man” and promised to defund ObamaCare and the czars. In N.J., Anna Little, Republican challenger to Rep. Frank Pallone, said ObamaCare is “not just tyranny; it’s immoral” and called for its repeal.

The Ruling Party v. the Country Party
Rasmussen notes that in contrast to mainstream Americans, 80% of the “political class” thinks ObamaCare is good for the U.S. The “ultimate Ruling Class publication,” Politico, writes that “68% of Washington elites said that the anti-tax tea party movement is a ‘fad’ and that it will ‘go away soon.’ Only 26% of the rest of the country agreed” (CPR, op. cit.).

The only serious opposition to the arrogant Ruling Party, writes Angelo Codevilla, is not the Republican Party but what might be called the Country Party: Americans who believe in self governance and equality under the law. While the ruling class holds most of the cards, “a two to one numerical disadvantage augurs defeat” (American Spectator, July/August 2010).


ACA, Dependence Economics, and the Way Out

As Angelo Codevilla explains (see p 1), “laws and regulations are longer than ever these days because length is needed to specify how people will be treated unequally.” ObamaCare (ACA), for example, codifies bargains between the government, parts of the healthcare industry, States, and large employers. It is “a template for the ruling class’s economic modus operandi.” The money taken from citizens in taxes and mandatory insurance premiums is money that they might have used for medical care. They might be dissatisfied with what the “system” gives them in care, but in giving up their money, they surrender their power to choose and become dependent on all the boards and commissions that they also pay for and that raise the cost of care.

Although the vast majority of doctors opposed the law, the AMA’s leaders supported it. The millions of dollars flowing to the AMA from the government contract for codes keep them in line.

If it manages to defeat the Ruling Party in elections, the heterogeneous Country Party must not succumb to the temptation to enact its own wish list into law regardless of the Constitution, through partisan majorities supported by interest groups that gain from the law. Rather, it must use legislation as a tool “to remove obstacles, to instruct, and to reintroduce into American life ways and habits that had been cast aside.” It needs to hold discussions around the country on why even the noblest purposes should not be allowed to trump the Constitution.


Medicare Liabilities Wiped Out?

According to the 2010 Medicare Trustees Report, $51.5 trillion of the $106.8 trillion of unfunded liabilities of Social Security and Medicare reported in 2009 for an infinite time horizon were wiped out with the signing of ACA. It shows “how the Affordable Care Act is helping to reduce costs and make Medicare stronger,” said a White House statement (Wall St J 8/9/10).

Even the $6.2 trillion decrease in Medicare’s 75-year liabilities is “unbelievable,” writes John Goodman (www.john-goodman-blog.com 8/10/10). Medicare’s chief actuary Richard Foster apparently agreed, as he took the unprecedented step of issuing a companion analysis that repudiates the previous 280 pages. The trustees’ estimates “do not represent a reasonable expectation for actual program operations.” They assume a 30% cut in payments to physicians in the next 3 years and a continued decline thereafter. Cuts in payments to hospitals, skilled nursing facilities, and others will make one in seven unprofitable by 2019.

“There is no more effective cost control device…than the simple expedient of denying people care,” Goodman writes.


Millions of Healthcare Jobs to Be Lost

Because of price controls and costly regulations, ACA is expected to cause the loss of millions of U.S. healthcare jobs by the end of the decade, predicts Ralph Weber. Insurers have started signing up overseas hospitals in an effort to increase the supply of personnel and facilities needed to cope with burgeoning demand. In 2008, Deloitte estimated that between $228 billion and $600 billion annually would be lost to the U.S. medical economy through outsourcing by 2017. Weber expects U.S. physicians to be largely replaced by lower-cost, low-level order-takers.



The General Assembly will consider resolutions on the repeal of ObamaCare and on maintenance of certification, which are posted at www.aapsonline.org/2010am.


More TEA Parties

Donna Campbell, M.D., an emergency physician and candidate for Congress, who spoke at our San Diego event, is organizing a Texas Doctors Tea Party on the capitol steps in Austin, from 10 a.m. until noon on Saturday, Aug 21.

On Sunday, Aug 29, AAPS director Alieta Eck, M.D., is organizing an event at a Jewish deli, especially for observant Jews who were not able to attend the Aug 7 event. AAPS past president Lois Copeland, M.D., and general counsel Andrew Schlafly will be there. Watch the website for details.


Employed Physicians Face Cuts, Liability

At present, just over 60% of New York physicians are in private practice. Because of price controls and increasing compliance costs, more are succumbing to the lure of employment by hospitals. This is not as safe as one might think, warns MSSNY president Leah McCormack. One physician told her of a no-recourse sudden salary cut of 40%; another lost his job when the hospital closed because of bankruptcy. The latter physician was worried about disposition of the medical records and access to them in the event of a lawsuit. Additionally, he lost his claims-made professional liability insurance that the hospital had paid for—and only the hospital can buy tail coverage.

Another risk increasingly faced by contract physicians and those who leave to seek other employment is that the hospital will settle a lawsuit and then sue the physician (AM News 6/28/10).


The Massachusetts “Train Wreck”

Nobody but then-Governor Mitt Romney disagrees that ObamaCare is “essentially identical” to the Massachusetts reform bill he signed in 2006, writes Joseph Rago (Wall St J 7/7/10). A classic “bait and switch,” it was an unrepealable entitlement based on unrealistic premises. The five major insurers in the Commonwealth have lost $116 million, and 235 of 274 premium increases were denied. Now devouring 35% of the state’s budget, healthcare is “squeezing out everything else”—such as schools, roads, police, prisons, and lower taxes, writes Robert Samuelson, (Wash Post 7/19/10).


AAPS Calendar

Sep 15-18. 67th annual meeting, Salt Lake City, UT.
Sep 28-Oct 1, 2011. 68th annual meeting, Atlanta, GA.


Virginia Case Against ACA May Proceed

On Aug 2, U.S. District Judge Henry Hudson denied the federal government’s motion to dismiss Virginia’s lawsuit against ObamaCare, writing: “No reported case from any appellate court has extended the Commerce Clause or the Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce.” The Minimum Essential Coverage Provision “forges new ground and extends Commerce Clause powers beyond its current high water mark.”

Virginia’s Solicitor General E. Duncan Getchell, Jr., argued that “the government can’t draft an unwilling citizen into commerce just so it can regulate him under the Commerce Clause.”

When the Judge asked whether the individual insurance mandate was a tax or a penalty, the attorney for the federal government argued that it was both, even though members of Congress said they specifically did not pass it as a tax, and Obama emphatically denied that it was a tax in a Sep 20 interview with George Stephanopoulos of ABC News. Virginia responded that a penalty for inaction is not a tax of any kind known to the Constitution. A decision not to purchase a product is “a virtual state of repose—or idleness—the converse of activity.”

The power to exact a penalty is more constrained than the power to tax, in that a penalty must be in aid of an enumerated power. “Congress can tax under its taxing power that which it can’t regulate, but it can’t regulate through taxation that which it cannot otherwise regulate.”


What Is Insurance?

In the Secretary’s view, stated through counsel in the oral argument in Virginia, everyone will at some time require medical services, and “consuming services without paying for them is activity, plain and simple.” Without “full market participation, the financial foundation supporting the health care system will fail, in effect causing the health care regime to ‘implode.’” The deputy attorney general for the U.S. cited congressional testimony that “if you do the preexisting condition exclusion and no differential health status, without a minimum coverage type provision, it will inexorably drive that market into extinction.”

Of course, repealing the actuarial assumptions that have kept the insurance market afloat for 300 years does have consequences.

Insurance, however, is not a necessity for paying for medical care, writes constitutional attorney Dave Roland in testimony in favor of the proposed Alaska Health Freedom Act. A large majority of people would be better off if they saved their money instead of giving it to insurance companies. Following a mandate to buy insurance means “giving up a huge amount of money—as well as a significant amount of autonomy and privacy—committing themselves to a contract for goods and services they do not want, and in some cases may be prohibited from using.”

“Insurance is gambling,” Roland writes, “both for the insurers and for the insured” (Inside ALEC, July 2010).


“In both Britain and America,…people who have committed criminal acts have been acquitted or had their cases dismissed purely because they represent a politically correct cause or belong to a ‘powerless’ victim group…. When ideology replaces the rule of law, the ultimate result will be rule by lynch mob.”
Melanie Phillips, WSJ Europe 7/7/10


What Is Healthcare?

Since insurers will live or die based on whether they can meet the “medical loss ratio” (MLR) requirements set in ObamaCare, the definition of what constitutes a medical expense versus an administrative one is crucial. But “it isn’t easy to draw a bright line, or even a fuzzy one,” says Mark McClellan of the Brookings Institution. What about investments in information technology, for example? Those who didn’t get their desired public option could use the MLR as a proxy for controlling the insurance industry. In the 1990s, an MLR crackdown in Washington State caused the individual market to collapse in 35 of 39 counties. Too bad for those who were promised they could keep their health plan if they liked it (Wall St J 8/5/10).


Pain Doctor and Wife Convicted

After an 8-week trial, Kansas physician Stephen Schneider and his wife were convicted of health care fraud and “illegal distribution of controlled substances.” Federal investigators seized their property, and the auction was announced in the newspaper, even before the jury had a chance to return the verdict, stated AAPS president George Watson, D.O., who testified for the defense.

The U.S. attorney stated that 68 of the doctor’s patients died of overdoses of controlled prescription drugs. The charges included three counts of health care fraud resulting in a death, eight counts of submitting false claims to Medicaid and private insurers, and two counts of money laundering.

“There was no evidence that Dr. Schneider gave pain medications to anyone that he did not believe needed them,” stated his defense attorney, Lawrence Williamson.

One focus of the appeal will concern whether the patients died of overdoses. Many of them were seriously ill. “And we brought in a top cardiac pathologist who testified there was no scientific way to distinguish death caused by overdoses of pain medication in patients who are tolerant of their medications from deaths by cardiac events.”

Williamson also stated there was no evidence of an attempt to defraud. There were simply honest billing errors (BNA’s Health Care Fraud Report 7/14/10).


What Is a New Patient?

When submitting a claim to any insurer, physicians need to be aware of all policies and procedures for each plan, as the interpretations and definitions published in the AMA CPT Manual may not the policies for that insurer. For example, the definitions for new or established patient may vary based upon subspecialty, site of service, tax ID, taxonomy number etc. Physicians may face penalties for noncompliance (Ariz Med Assn 6/18/10).


ZPIC Error Costs Eye Doctor $350,000

A Zone Program Integrity Contractor assessed $4 million in overpayment penalties by erroneously applying E/M codes, which require checking mental status, to eye codes. After 2 years and three levels of appeal, the bill was reduced to $2,810. The appeals process, however, cost $350,000. (MPCA 6/26/10).



Hospitals Drool over Bundled Payments. Hospitals can hardly wait until they are put in charge of the flow of all funds, increasing their already frightening degree of control over physicians.

A hospital newsletter announces: “After years of deliberation and procrastination Medicare has begun a demonstration project of bundled payments for hospital visits…. [O]ne check will be issued (based on the final DRG)…. Payment will be apportioned to those who have cared for the patient….

“Now more than ever physicians MUST optimize their documentation to achieve maximum reimbursement.” For example, the hospital states that “Altered Mental Status and Mental Status Changes are weak reasons for admission. Consider a diagnosis of “possible” or “probable” Cerebral Atherosclerosis (437.0)….” But from a neurologic standpoint, altered mental status is a compelling reason for admission. Sending a confused patient out to fend for himself is medical malpractice, in my opinion.

The hospital bureaucrats who produced this newsletter, recommending an acceptable diagnosis and differential diagnosis, clearly should not be allowed to practice medicine. Cerebral atherosclerosis is a chronic condition that would not, by itself, produce altered mental status—but infection and subarachnoid hemorrhage might, though omitted from the hospital’s list.

The bureaucrats who use electronic records to track diseases are likely to see an epidemic of “cerebral atherosclerosis,” caused by perversions related to third-party reimbursement policies.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


Death by 1,000 Paper Cuts. Private physician practices may soon be extinct, captured by the regulatory state and the need to have economies of scale to process the red tape. It has happened to just about every other profession, with the exception—surprise, surprise—of the legal profession, which is protected by lawyer legislators. If §9006 of ObamaCare is not repealed, sole proprietors like me will have to issue 1099s to every company that sold them $600 or more in goods or services. I’d have to issue a 1099 to Southwest Airlines, Marriott, Qwest, Verizon, National Car Rental, Office Max, Kinko’s, Cox, and FedEx.
Craig Cantoni, Scottsdale, AZ


A Honeymoon Period? When the government takes a heavy hand in an industry, the changes won’t usually come all at once. Politicians need public support for major legislation, so they generally ensure that the system is pretty functional—for the first few years. So it’s pretty typical for those involved to think things are getting better—before they get worse. Dr. Ed Annis, AMA president right before Medicare passed, told me that doctors used to say, “Ed, I agree with every thing you said about the problems a government-run system could cause. But I have to tell you, I’ve never had it so good because all those patients I was seeing for free I’m now getting paid for.” Within a relatively short period of time, the tensions begin as the government tries to keep costs down. That’s when the price controls and rationing begin—as is now happening in Massachusetts. At some point, doctors and insurers start dropping out. We shall see whether the current level of physician support for the Massachusetts plan starts to decline.
Merrill Matthews, Ph.D., Coppell, TX


Trapped in the Medicare Cage. Nothing is going to happen unless physicians find that it costs them money for the privilege of seeing Medicare patients. Then they will stop seeing Medicare patients, or they will get out of Medicare altogether and contract privately. In places like Naples, Florida, a lot of physicians are already doing this. Cardiologists this year have already take a huge hit in their fees. In Camden County, 39 had not paid their dues as of May—but I have not heard of one who is not seeing new Medicare patients. A young businessman who tremendously objects to ObamaCare told me that no one on Medicare has a right to challenge the bill because Medicare is on an unsustainable financial course and because it is socialized medicine, for which the seniors are having the working population pay. There is a floor and the socialists are going to take it as low as they can.
Louis Keeler, M.D., Cherry Hill, NJ


CME—Another AMA Cash Cow. I found I could not claim continuing medical education credit for lectures I had given or articles I had written without an AMA certificate. The AMA charges $50 per credit hour claimed, with a 4-week turnaround, or $100/hr for an expedited (2-day) decision. An article published in a Medline-indexed journal is worth 10 hours, so I’d have to spend $500 to $1,000 to get credit for my own work!
Martha E. Leatherman, M.D., San Antonio, TX


Tool of Enslavement. Regarding the “enormous unaccountable bureaucracies,” the next tool in the arsenal of the meddlers is the cyberbureaucrat called the electronic medical record. Even the AMA and various specialty societies are voicing concerns about the ominous requirements. I am told that some officials who cannot be named have openly opined in various hearings that the reporting requirements for EMRs should be complex with high reporting thresholds, in order to discourage physicians from switching back to paper.
Scot M. Silverstein, M.D., Philadelphia, PA

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