by Jane M. Orient, M.D.

In normal times, the relationship between patient and physician has been based on an implicit, voluntary understanding or contract. Is it possible that a physician’s relationship with a Medicare-eligible patient must now be codified in a legal document meeting narrow specifications defined by the federal government? And can it be in these United States of America that such a relationship is altogether forbidden unless (a) the physician swears to forgo all reimbursement from the only insurer of the patient population in greatest need of his services or (b) the service provided is “unnecessary” but not “unwarranted”?

The absurd state of affairs with Medicare is highlighted by a series of remarkable occurrences:

In 1997, Congress enacted a law (Section 4507 of the Balanced Budget Act) to assure exception (a) as an improvement on the previous situation in which private contracting was deterred by intimidating notices from Medicare carriers. To take advantage of the exception, physicians are supposed to formally opt out of the program even though they may never have agreed to opt in.

Next, United Seniors Association (United Seniors v. Shalala) filed suit to have Section 4507 declared unconstitutional, asserting that it effectively prohibited private contracting on a case-by-case basis, as well as to enjoin the Department of Health and Human Services from “in any way impairing Plaintiffs’ freedom to contract privately for health care services” (1).

In July, 1999, the U.S. Circuit Court for the District of Columbia found for the defendant but declared exception (b) (2). Based on the oral argument, this was not unexpected. The Court proceedings reminded this observer of the Lord High Executioner’s song in Gilbert and Sullivan’s Mikado: “And I am right, and you are right, and everything is quite correct.” Both sides declared victory, the Court seemed to breathe a sigh of relief at not having to adjudicate any serious Constitutional issues, and the Wall Street Journal applauded in a lead editorial (3).

It is doubtful that Medicare could have been enacted had Americans foreseen that it would mean compulsory dependency upon a bankrupt federal program for all “necessary” medical care, regardless of personal resources. Such a situation is thoroughly unAmerican; indeed, it is more characteristic of a totalitarian Marxist society, in which all are impoverished in preference to allowing anyone to better himself through his own efforts.

Has the unthinkable truly come to pass? And are Americans content with the tiny sliver of freedom acknowledged in this Court decision, although even that is clouded by the potential for the government to declare a treatment “unwarranted”?

Congress has never enacted a law explicitly repealing the assurances in Sections 1801, 1802, and 1803 of the Social Security Act. The Courts have never explicitly found that a person forfeits his right to use his own property to protect his own life as soon as he becomes entitled to federal “insurance” (although they have accepted the parties’ stipulation to the functional equivalent of this situation). The Department of Health and Human Services (HHS), acting through the Health Care Financing Administration (HCFA), has nevertheless acted as though these things had indeed happened.

An excellent scholarly review of congressional ineptitude and HCFA’s weaving and dodging is found in John S. Hoff’s monograph, Medicare Private Contracting: Autonomy or Paternalism (4). This book is a “must read” for anyone seeking to penetrate the fog created by HCFA’s “phantom policy” on private contracting. (I disagree with the review published previously in The Medical Sentinel; I found the book lucid, accurate, and right on target in its analysis.)

As Hoff recognizes, Section 4507 is an “exception to nothing.” Yet, as he also points out, few physicians have been willing to treat Medicare-eligible patients privately. For example, on the first annual AAPS Medicare Patient Freedom Day in 1995, counsel for the Florida Medical Association warned physicians that they might be subjected to both civil and criminal penalties if they dared to treat a Medicare patient for $1 without filing a claim (5). To a physician who “confessed” to this activity, HCFA responded that “[p]ursuing sanctions in such a case would be an inappropriate use of the Medicare program’s scarce administrative resources” because “the beneficiary was unlikely to have been harmed since she was charged only $1″ (6).

So what now? The position of AAPS since 1965 has been that physicians ought to refuse to participate in an immoral and unconstitutional program. Many physicians adhered to this policy by declining to sign a participation agreement but giving patients the documentation they needed to file for their benefits. A critical change, in my view, occurred with the requirement that, as of September 1, 1990, physicians file Medicare claims for all covered services (even those sure to be denied because the patient had not met the deductible). An attempt to repeal this requirement was made in 1990 (7), but it failed. At this point, simple repeal would accomplish nothing because HCFA, with the assistance of the AMA, immediately increased the complexity of the claims-filing process; it is now probably impossible for most patients to file a claim without assistance. Space for narrative diagnoses was eliminated in 1991 (8). A strict liability standard for coding was established by the Eighth Circuit in Anesthesiologists Affiliated v. Sullivan in 1991 (9).

Most patients and physicians are now trapped. Even “nonparticipating” physicians participate to some extent unless they only treat patients who do not receive Medicare reimbursement. HCFA is relentlessly trying to increase its authority over all medical care. Neither Congress or the Courts have shown the slightest inclination to stop the gradual encroachments on the right to seek or offer private medical care.

Nevertheless, life, liberty, and property are unalienable rights. Moreover, they are recognized by the U.S. Constitution. Those who exercise and defend these rights can, and ultimately will, prevail. Victory, however, will not be won by simply sending a lawyer into a courtroom pleading for a narrow exemption, while accepting the basic assumptions of the program.

REFERENCES

(1) Brown, KM, Northam, FM, Memorandum of points and authorities in support of plaintiffs’ motion for a preliminary injunction, United Seniors Association, et al., v. Donna Shalala, U.S. District Court for the District of Columbia, civil action no. 97-3109.

(2) United State Court of Appeals for the District of Columbia Circuit, United Seniors Association, et al., v. Donna Shalala, No. 98-5142, decided July 16, 1999.

(3) Anon., Wall Street Journal, July 29, 1999, p. A26.

(4) Hoff, JS, Medicare Private Contracting: Paternalism of Autonomy, Washington, DC, AEI Press, 1998.

(5) Ault, TA, Director, Bureau of Policy Development, Health Care Financing Administration, letter to physician, Nov 8, 1995.

(6) Thrasher, J, memorandum to Donald C. Jones, Executive Vice President, Florida Medical Association, July 14, 1995.

(7) Medicare Claims Filing. AAPS News 1990;46(10):2.

(8) No Words Please. AAPS News 1991;47(4):2.

(9) “Strict Liability” for Codes. AAPS News 1991;47(10):3.

            The current vision of Universal Health Care being proposed involves large sums collected from taxpayers and sent to Washington D.C. where it is doled out by government officials to pay bills that are generated by physicians, hospitals, pharmaceutical companies and other purveyors of health care services.  That’s an unnecessarily cumbersome and circuitous way to fund the vision.

            Why not cut out the middle-man?

            For those wealthy enough to pay taxes:

            If you spend a dollar on health care, you deduct it directly from your taxes.  Instead of sending money to the IRS and having a government agency pay it out to health care providers, you just don’t send it to the government in the first place, but pay directly to the provider.

            This plan means that choices are as varied as the imagination of the public because you simply choose your provider on your own, paying with money that otherwise would go to the IRS.  There is no government health Czar, simply a direct payment to the provider by taxpayers.

            It means we don’t have to change the basic employer-based system we have now, and any employer who wants to provide health insurance can do so (and really has no incentive to discontinue the benefit), but it means that those unable to obtain insurance through their employer will be able to divert money currently slated to go to the IRS to cover the cost – again, not fundamentally different in result than running the money through the IRS and back through a big government agency charged with distributing money to providers or subsidizing insurance for all.

             For those not wealthy enough to pay taxes:

            As to people too poor to pay any taxes (a vanishingly small segment of the population), several answers arise.

            First, we should allow your neighbor to pay your bill and take the tax credit.  Again, if the idea is “universal coverage” and if taxpayers generally are going to pay for all the care anyway, then there’s every reason to let providers just find a taxpayer willing to directly pay a health care bill without running the money through the IRS and through a government bureaucracy.

            Over time, of course, any provider with a modicum of common sense will develop a data base of supporters willing to pay the provider for free services to indigents in exchange for getting the tax credit associated with doing so, and – again – all we are doing is having taxpayers pay the costs of health care without the IRS getting in the middle.

            Second, we prohibit providers whose practice is qualified to receive tax credit payments from turning down any patient simply because the patient is unable to pay, essentially leaving in place the existing “emergency room” treatment model.  Providers who violate this law, would be removed from eligibility for tax credit payments – a penalty so huge that no one would likely try to violate the law.

            That should cause little concern because there is really no incentive to pose as “too poor to pay.” By posing as unable to pay, no one would get a single dollar more in their pocket.  The money withheld from a provider by posing as too poor to pay would instead go to the IRS.  So, with this plan, the number of those claiming to be unable to pay is likely to be much smaller than it is today.  Plus, as indicated, because any taxpayer can pay any other person’s health care bill with money otherwise slated to go to the IRS, most providers will have a data base of taxpayers willing to pay the bills of others.  And, finally, to the extent that fails, providers will soon learn on average what it costs to provide the free treatment to indigents, and that will get built into the price for the tax-credit payors, and so we will have taxpayers with money paying the entire treatment costs for everyone, but – again – without the IRS and a government health Czar in the middle.

            Because this does nothing more than send taxpayer money to health care providers for appropriate medical care, it won’t cost any more than the Universal Health Care envisioned by the most caring Americans.  Indeed, by cutting out the middle-man, it saves billions in annual administrative costs along with the waste and mismanagement inherent in every large organization. 

            This plan also avoids the essential fear many Americans have of any Universal Health Care system administered by the government, which is: control by an unaccountable bureaucracy over health care decisions.  This plan by-passes governmental control over health care entirely. 

            This will provide what is essentially “free” universal health care to all Americans.  This plan also meets President Obama’s pledge of reforming health care without raising taxes on the middle class.  The plan could increase the federal deficit, except that President Obama already indicated in his September 8, 2009 speech to the joint session of Congress that universal heath care could be funded mostly by eliminating waste and fraud in the existing Medicare/Medicaid programs; so, if we just address that, this could be deficit neutral, and this plan has the advantage of costing nothing to fund a large federal health care bureaucracy, something inherent in other forms of Universal Health Care.

            Funding Universal Health Care with a simple tax credit thus accomplishes the core goal of its most fervent proponents without any of the problems associated with existing proposals.  For that reason people of all political persuasions should embrace the idea.

By John S. Mills, Tacoma, Washington