Texas, Tennessee, Oklahoma, Georgia, and now South Carolina have passed laws intending to limit licensing boards, hospitals and insurers from requiring the MOC program that is promoted by ABMS and its affiliated specialty societies. Seven more states have taken the partial step of prohibiting MOC requirements as a condition of licensure, and seventeen states have or are considering similar measures to that prohibit MOC mandates.
The following information is posted here to enhance public debate about such existing and proposed laws.
Update 8/31/2018: An ABMS attorney wrote to AAPS objecting to our publication of the “Boards’ Billion Dollar Asset Baby”. To address the ABMS concerns, the report has been expanded with additional information:
ABMS and member Board retirement plan net assets (personal property of Board executives and other employees) of $140.5 million and $9.2 million in retirement plan investment income have been moved from individual Board reports to a “Retirement Plans” page, listing retirement plan Net Assets, Investment Income and both Employer (i.e. Board) and Employee (i.e. payroll deductions) retirement plan contributions as summarized below:
- Retirement Plan Net Assets as of 12-31-16 =$140,500,500
- 2016 Retirement Plan Investment Income = $9,208,800
- 2016 Employer Contributions = $11,500,800
- 2016 Employee Contributions = $3,200,300
Rollovers into the Board retirement plans from previous employers in 2016 were nominal at $185,745, primarily at ABMS where rollover was $104,578. Rollover at ABFM was $20,769 and ABOG, $29,870.
Comments or notable findings from review of ABMS and Board retirement plans, public information available through the Department of Labor, are as follows:
Retirement plan Net Assets of the American Board of Internal Medicine (ABIM) and American Board of Surgery (ABS) are worth more than the Net Assets of the sponsoring Board:
- ABIM’s retirement plan (formed in 1989) is worth $27.7 million, while ABIM (formed in 1936) and ABIM Foundation are worth a combined $13.6 million as of June 30, 2016.
- ABS’s retirement plans (pension plan formed in 1953, 401(k) plan formed in 1993) are worth $12.5 million, while ABS (formed in 1937) and the Surgical Council on Resident Education are worth a combined $7.4 million as of June 30, 2016.
There were $0 Employee Contributions in 2016 at the two largest retirement plans: ABIM and the American Board of Pediatrics (ABP). 2016 Employer Contributions from ABIM and ABP were $2,708,200 and $2,600,000, respectively.
Retirement plans for the American Board of Genetics and Genomics, American Board of Orthopaedic Surgery and American Board of Pathology were not available through the Department of Labor and excluded from the report.
A “Total Liabilities” page was added to the report listing Deferred Revenue, Deferred Compensation and All Other Liabilities by Board, including related organizations, totaling $280.6 million.
Comments or notable findings from review of ABMS and Board liabilities are as follows:
Pre-paid Certification and Maintenance of Certification fees (“Deferred Revenue”) of $196.7 million (70% of all liabilities) serves no apparent business purpose and is a de facto interest free loan from the physician community to the Boards.
ABIM’s profligate spending of their unearned, pre-paid cash was featured in “An American Sickness” by Elisabeth Rosenthal.
The American Board of Family Medicine is reporting “Accrued Pension and Retirement Benefits” liability of $4.8 million as of December 31, 2016.
The American Board of Pediatrics is reporting “Deferred Pension” liability of $8.9 million as of October 31, 2016.
The American Board of Surgery is reporting “Pension Plan Liability” of $8.6 million as of June 30, 2016.
A “Cash, Savings and Investments” page was added to the report listing total cash, savings and investments by Board, including related organizations, totaling $817.0 million.
Included in Cash, Savings and Investments of $112.4 million at the American Board of Internal Medicine and ABIM Foundation as of June 30, 2016 is $35.2 million invested in a non-publicly traded investment partnership.
ABIM Foundation reported $6.5 million in Cayman Island investments through this partnership during the year ending June 30, 2015.
A Top 10 Board page has been added for the new reports listed above: Cash and Investments, Total Liabilities and Retirement Plans.
Updated Summary:
The American Board of Medical Specialties (ABMS) and its partner specialty certification boards claim to be ensuring physician quality with their costly, time-devouring Maintenance of Certification® (MOC) programs. However, an updated review of their public financial disclosures, commissioned by the Association of American Physicians and Surgeons (AAPS), suggests that the main purpose of MOC is to amass wealth for the boards, fund employee retirement plans, and finance pet real estate projects.
The review was compiled by Charles P. Kroll, CPA (Inactive), a healthcare forensic accountant with 25 years of medical industry experience. Mr. Kroll’s 4-year investigation of the largest board, the American Board of Internal Medicine (ABIM), was featured in Kurt Eichenwald’s Newsweek exposé of ABIM and former New York Times reporter Elisabeth Rosenthal’s best-selling book, An American Sickness.
Mr. Kroll’s report includes an analysis of the “Top 10 Specialty Boards Ranked by 11 Key Financial Metrics” to show where the money has been accumulated and spent. The analysis also includes 25 “report cards,” one for the ABMS and each board, including 13 related organizations, to summarize what each entity is doing with funds paid to it by physicians.
Included in the nearly $912.5 million under management by these Boards are $126 million held in related organizations. In addition, the reports show that combined Board (and related organization) revenue for 2016 totaled $297.8 million, and executive compensation totaled nearly $43 million, with CEO compensation exceeding $11 million.
The combined Boards have accumulated $377 million in excess reserves—funds held above 12 months’ estimated future operating expenses, an industry-standard benchmark for financially healthy nonprofits.
Some boards are using assets to fund swank headquarters. The American Board of Pediatrics holds $12 million in real estate and even owns its own 2.8 acre pond. The American Board of Psychiatry and Neurology, leading all boards with excess reserves of $90 million, is constructing a “41,000 square-foot facility [that] will include a glazed floor-to-ceiling wall to the private courtyard with a view of a lake beyond.”
AAPS, the report’s sponsor, has an ongoing lawsuit against ABMS, alleging that it is engaging in illegal anti-competitive behavior to coerce physicians to purchase MOC® products or lose their ability to practice their profession. Patients may suddenly lose access to their trusted physician who declines to participate in MOC® or misses one question too many on a grueling proprietary examination.
Mr. Kroll, research analyst Elizabeth Tremblay, and their team have released a 42-page report and a one-page overview with links to their analysis and the source financial disclosures of each entity.
The Association of American Physicians and Surgeons (AAPS) is a national organization representing physicians in all specialties, founded in 1943.
