Tax Equity, Private Contracting, and Quality Medical Care

Joseph Scherzer, MD
Article Type: 
November/December 1998
Volume Number: 
Issue Number: 

Physician incentive to behave in a traditional fashion as a firm, patient advocate, is waning for many reasons — some functional, and some intentional. For example, managed care has devised a novel payment system for contracted physicians called capitation that actually reverses the normal incentive for providing treatment. Under capitation, a “provider” is paid a flat fee (perhaps 50 cents) per “covered life.” The capitated doctor is paid in advance by such a company — even if he does not treat a single patient over the course of a year. He actually loses money if he provides “too much” medical care.

We have created a huge and very expensive “industry” of attorneys, medical organizations, coding experts, and insurance bureaucrats who make decisions concerning how much to pay physicians — while being handsomely rewarded for doing so. The Health Care Financing Administration (HCFA), in concert with the AMA and other groups, annually revises voluminous books that doctors must use to code insurance forms for each and every service rendered. (Virtually every insurance company recognizes these same codes and requirements — making HCFA, which also administers Medicare and Medicaid, the “flywheel” driving the rest of the insurance industry.)

Instead of attending conferences designed to improve their medical or surgical skills, modern doctors are spending their time and money on courses about these “Evaluation and Management” coding guidelines and documentation requirements, in a heroic effort to try to ensure payment for services. In truth, these criteria constitute an impossible maze that no physician can adequately negotiate. At the same time, physicians now face civil and criminal prosecution for insurance fraud should they fail to adhere to these constantly evolving guidelines! (Doctors can be fined $10,000 for each and every “improperly” coded claim — de minimis. We can thank every U.S. senator for facilitating this predicament, by way of a unanimous vote for the Kassebaum-Kennedy Bill.)

At a recent conference held by one of these new “coding gurus,” the physicians in the audience were actually told the nurse rather than the doctor should be obtaining the history on every patient, since it is no longer economically feasible for doctors to be “Dr. Marcus Welby” and talk to their patients! I wish every patient — along with his or her legislators — could have been present to hear this!

We were also informed that HCFA, apparently in an attempt to avoid physician rancor by openly cutting back further on payments for routine office visits, has devised a devilishly clever technique to achieve the same goal. It has redefined the coding yardsticks for office visits, effectively “downcoding” most of them to minor level visits  with significantly decreased reimbursement. No wonder we were told not to bother talking to our patients! I imagine many patients will soon find their doctor needs to reschedule them for another session if they bring more than one minor problem at a time to his attention.

If a physician downcodes a bill for an office visit, HCFA considers it de facto fraud and abuse (as an “enticement” to seek additional services). I daresay the lay reader would perceive that HCFA is guilty of this very same duplicity.

Million of dollars as well as valuable time that should — and could — be devoted to health care, are being squandered on extraneous matters and middlemen of various persuasions. As long as third party payers are involved in bottom line decisions, things will only deteriorate, and patient care will suffer. This will be the case whether it is a managed care organization or the government that pays the bill: third party payment for medical services is fostering a “one size fits no one” system.

Can patients and doctors alike extricate themselves from the stranglehold of government and the managed care industry? Yes, if we press for tax equity in order to provide ourselves with private and personal tax-free medical savings accounts paired with low premium, high deductible, catastrophic insurance coverage. This is the only insurance mechanism through which patients will be free to determine the quality and quantity of medical care that they, not their insurer, would choose. If physicians pretend to work because insurers pretend to pay them, while these same payers dream up schemes that serve to drive competent people out of the medical field, neither patient nor doctor will be well served.

Finally, we must insist on being able to privately contract with any doctor of our choice, irrespective of our insurance. Maintaining the option of private care is the most important safeguard against universally rationed care under universal “coverage.” A government that would prohibit such freedom has abrogated its moral authority to label health care a “right.” We must guarantee this right for Medicare patients — for as Medicare goes, the rest of us shall follow.

Dr. Scherzer is a dermatologist in Scottsdale, Arizona. His address is 10900 North Scottsdale Road, Suite 502, Scottsdale, AZ 85254.

Originally published in the Medical Sentinel 1998;3(6):220-221. Copyright © 1998 Association of American Physicians and Surgeons (AAPS).






No votes yet

It is now legend the AAPS legally lanced the secret task force and pulled its secrets...into the sunshine. It destoyed the Health Security Act.

The Oath of Hippocrates
and the Transformation of Medical Ethics Through Time

Patients within a managed care system have the illusion there exists a doctor-patient relationship...But in reality, it is the managers who decide how medical care will be given.

Judicial activism...the capricious rule of man rather than the just rule of law.

The largest single problem facing American medicine today is the actions of government...

The lessons of history sagaciously reveal wherever governments have sought to control medical care and medical practice...the results have been as perverse as they have been disastrous.

Children are the centerpiece of the family, the treasure (and renewal) of countless civilizations, but they should not be used flagrantly to advance political agendas...

Prejudice against gun ownership by ordinary citizens is pervasive in the public health community, even when they profess objectivity and integrity in their scientific research.

The infusion of tax free money into the MSA of the working poor give this population tax equity with wealthier persons...

It was when Congress started dabbling in constitutionally forbidden activities that deficit spending produced a national debt!

Does the AMA have a secret pact with HCFA?

The lure of socialism is that it tells the people there is nothing they cannot have and that all social evils will be redressed by the state.

Canada's fatal error — Health Care as a Right!

The Cancer Risk from Low Level Radiation: A Review of Recent Evidence...

...Moreover, the gun control researchers failed to consider and underestimated the protective benefits of firearms.

Vandals at the Gates of Medicine — Have They Been Repulsed or Are They Over the Top?