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 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, 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 8 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 and 20 retirement plans, to summarize what each entity is doing with funds paid to it by physicians.
In addition to the nearly $1.1 billion in total assets, with $126 million held in related organizations and $140 million in employee retirement plans, the reports show that combined board revenue for 2016 exceeded $300 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.
The Association of American Physicians and Surgeons (AAPS) is a national organization representing physicians in all specialties, founded in 1943.