News and Analysis (January/February 2000)

Privacy Matters

Although sacrificing an individual's right to privacy via computerization of medical records for the purported "good of the state" may sound acceptable to federal bureaucrats, apparently ordinary citizens don't agree. In a survey of 1000 Americans, 60 percent said they "would not grant access to a hospital offering preventive care or to an employer who was considering them for a new job; 70 percent would not allow drug companies to access their records for marketing new drugs and health care products." An astonishing 15 percent admitted to giving false or incomplete information to physicians, avoiding care altogether or taking other steps to protect their own personal medical information. As diagnosis in medicine depends heavily on medical history, it is clear that quality of care will suffer as patients become more aware of this electronic destruction of medical privacy and become more reluctant to share their symptoms with their doctors. From the patient's point of view: "Computerization of medical records is seen as the most serious threat to privacy." (MSSNY News of New York, March 1999.)

Medical Necessity Fraud?

New York State Supreme Court Justice Herman Cahn ruled in May 1999 that Prudential Insurance Company's HMO can be sued by patients who have accused the HMO of fraud by "allowing non-physicians to make decisions about medical necessity" (AMNews, July 5, 1999). The HMO allegedly used nurses in conjunction with Milliman & Robertson guidelines instead of physicians to determine medical necessity. Attorney for the plaintiffs is reportedly seeking class action status. This case bears watching as it may have implications for the Medicare program. In 1993, the General Accounting Office published statistics which showed that 90 percent of all Medicare medical necessity decisions were made by Medicare clerks who had only a high school education and no medical training whatsoever. According to the GAO, "the overwhelming majority of these claims are never reviewed by qualified health care professionals" (AMNews, Sept 20, 1993). Inasmuch as Medicare sends these fraudulent claim denials by mail, often crossing state lines, it may be possible that these unqualified bureaucrats and their Medicare organization may be eligible for prosecution under RICO for mail fraud/extortion.

AMA Supports Public-Private Partnerships

The Immediate Past President of AMA, Dr. Nancy Dickey, says "today, as we are challenged by the drive to cut costs, it is imperative for us to leave the status quo of separation [between public and private healthcare] behind."

More collaboration and integration are necessary so that physicians can make the necessary adjustment to population-based medicine (AMNews, July 5, 1999). The AMA wasted no time in promoting the "public-private" partnership [i.e., fascism] as they headlined an article in AMNews extolling the benefits of collaboration between public health agencies, private health care providers [previously known as private physicians] and managed care organizations ("Public-private Partnership," AMNews, July 5, 1999). The plan for public and strategic private partners to spread this health care poison across the nation appears to be a prime goal for the new millennium. The executive director of the American Public Health Association, Dr. Mohammad Akhter, says, "This is the kind of thing we'd like to see across the country."

Furthermore, we are told that the private partner (AMA) has completed its recommendations to the public partner (HCFA) with respect to the new E&M guidelines and the main focus now is to make sure that "physicians receive needed time and resources for implementation and education" (Dr. Randolph Smoak, "AMA proposes E&M changes to HCFA," AMNews, July 5, 1999). This collaboration between public and private partners, of course, would appear to benefit both parties thus assuring public agency control and private profits from the sale of coding books. The only losers will be physicians and their patients.|


Is the Oath of Hippocrates Outdated?

Under the American Medical News heading of "Ethics Forum," Dr. Bob Baker, says "while some of the oath's noble sentiments are applicable to contemporary medical practice, others do not mesh well with the realities of the present" ("Should Oath be a guide for mission statement?" Ethics Forum, AMNews, July 5, 1999). One of the things that the Oath of Hippocrates does not accommodate, of course, is population-based medicine. Dr. Baker tells us that treatment plans "are often drawn up by health care teams following standard procedures and protocols and ever mindful that the abilities and judgments of solitary individuals cannot consistently meet the demands of continuous quality improvement, quality assurance and utilization review systems."

Now let's see a show of hands: How many of you out there went into medicine to serve the needs of a utilization review system? And what about the stodgy old tradition of patient privacy set forth in the Oath? Well, that, of course, has to be balanced against the needs of bureaucrats and other inquiring minds. "Today's physicians' ability to keep patients' secrets is limited by the needs of third-party payers and by various legal requirements for reporting child and spousal abuse, gunshot wounds, sexually transmitted diseases and so forth."

"So forth," of course, knows no bounds. Dr. Baker suggests looking to organizations like the American Hospital Association for more contemporary, reality-based ethics. We infer from this view that the wide and accommodating path to his "reality" is paved with moral relativism.


Are HMOs being truthful when they tell patients they are committed to quality medical care, or are they really committed to the bottom line instead? This is the crux of the question involving a RICO (Racketeer Influenced and Corrupt Organization Act) suit filed against Aetna U.S. Healthcare which has been accused of "systematically misleading members about the company's commitment to quality care" (AMNews, May 10, 1999). The suit was filed by the Foundation for Taxpayer and Consumer Rights (1750 Ocean Park Blvd, #200, Santa Monica, CA 90405-4938). The group alleges that the company "sacrifices quality in favor of cost savings and uses financial incentives that have the net effect of reducing the quality of care."

In a precedent setting case, on January 21, 1999 the Supreme Court ruled that patients can sue health plans for fraud under RICO. And, in the same month a jury awarded a $120 million verdict against Aetna U.S. Healthcare. The latter lawsuit involved delay of treatment for a patient who later died of a rare cancer known as leiomyosarcoma.

Success in winning the RICO case against the insurer hinges on the plaintiff's ability to show that the insurer was engaged in false advertising and not just legal puffery and also on the demonstration that the patient relied on the company's advertising claims in choosing the plan.

As we all know, however, most HMOs are chosen by employers not by patients. Just another one of many ill effects of employer-based health insurance due to tax discrmination. Senior counsel for the plaintiffs states: "This case is simply about forcing HMOs to publically own up to why they're in business: to make money."

The Cat and Mouse Games in Medicare Fraud?

Did you know that according to a recent government investigation, over 25 percent of Medicare contractors "have been or currently are under investigation for various fraudulent and negligent activity?" (Jack Anderson and Douglas Cohn, "Why Not Fix Medicare Before Saving It?" The Post-Journal, July 23, 1999). Moreover, "according to government investigators, many of the corporate fraud units are incompetent and often turn to fraud to hide their mistakes and astounding laziness."

You may recognize some of the "tricks" that were uncovered in the investigation of these crooked Medicare carriers as they are the same ones AAPS has been documenting for years. They include such things as deleting whole batches of Medicare claims, turning off Medicare phone lines, hiding files and "falsifying documentation and reports to HCFA regarding performance." The annual contractor evaluation reports (ACERS), in fact, are set up so as to encourage carriers to commit fraud by allowing them to essentially "evaluate" themselves and dupe HCFA in the process.

HCFA, of course, fully aware of this situation allows itself to be duped. According to Representative Tom Bliley (R-VA), "The contractors are able to dupe HCFA Contractor Performance Evaluators because HCFA routinely gave them advance warning about the dates of any reviews and about the records the agency wanted to review." Despite the 25 percent figure of Medicare contractors under investigation, "watchdog" HCFA was only able to detect 3 with "integrity problems." Congress has tried to investigate but when they ask HCFA and Medicare contractors for detailed financial information and reports, "the answers so far are deeply disturbing" according to Representative Bliley. And, how much money has been lost via these crooked and/or incompetent Medicare contractors? Well, nobody really knows. According to the deputy inspector general at HHS "It's impossible to tell how much has been lost to taxpayers."

And yet, the Associated Press (July 17, 1999) reported that the GAO and the Inspector General of HHS have documented the lack of integrity of these Medicare contractors and in fact, six of these contractors have paid at least $235 million in civil and criminal penalties since 1993.

This edition of News and Analysis was written by AAPS president-elect, Lawrence R. Huntoon, MD, PhD. It appeared in the
Medical Sentinel, January/February 2000, Volume 5, No. 1, pp. 8-9. Copyright©2000 Association of American Physicians and Surgeons.