Written By: Attorney Jonathan Emord | Posted: Tuesday, July 20th, 2010
The Health Care Reform law is destined to make universally applicable the coverage criteria used by Medicare for Medicare beneficiaries. That is particularly bad news for physicians who value their independent professional judgment, and it is disastrous for patients who expect their physicians to cater to their interests rather than the insurance carrier's. The President's bill makes monopolies out of health insurers, makes them proxies for government "qualified" services, and replaces physician judgment with health carriers' decisions concerning the level, degree, nature, and quality of care to be afforded patients.
The Health Care Reform law mandates use of "qualified" plans. A qualified plan is one that provides a coverage menu that matches federal requirements. Those coverage criteria are already specified by Medicare. The insurance companies administer the Medicare program and serve as proxies for the government. By 2014 all major health insurers in the United States will effectively employ these same coverage criteria for all Americans.
There are many problems with Medicare, not least of which is that it constrains the independent professional judgment of physicians. Medicare causes physicians to focus more on what the Medicare insurance carriers' desire than on what patients' need. That is because if a physician provides a service not covered by Medicare or exceeds the insurance carrier's expectations as to the nature, degree, quality or quantity of service offered, that physician may be audited. Physicians loathe Medicare audits, fear them dreadfully, and seek to avoid them with a vengeance. Medicare audits are costly affairs, requiring physicians to enlist risk managers, coders, and lawyers. The audits focus in minute detail on a random sampling of medical records. A failure to make a contemporaneous entry justifying a treatment, or a failure to justify a treatment adequately (in the subjective view of the auditor), results in a finding by the carrier against the physician, resulting in a demand for reimbursement of Medicare payments. The demand is not limited to the sampled records but is extrapolated out to the presumed universe of all Medicare billings, resulting in sometimes huge reimbursement demands for monies paid to (and usually already expended by) the physicians.
Medicare faults physicians for "overutilization." Overutilization occurs when a physician gives a patient more service than Medicare thinks appropriate. Medicare faults physicians for "underutilization." Underutilization occurs when a physician fails to give a patient the service that Medicare thinks should be given. Medicare faults physicians, after payment has been made, for providing Medicare covered services thought to deviate from conventional standards or statistical norms associated with billing practices by physicians in the same area of practice.
Physicians are forever conscious of the fact that they will be second-guessed by clerks with the insurance carriers (generally having no advanced education in medical science and almost never a medical degree). They have neither the time nor the desire to wrangle with these clerks over the propriety of coverage decisions. If told that a service is not covered or that the extent of service desired exceeds expectations, most physicians simply will not offer the service to their patients. They are forced to make a very ugly decision-to satisfy the carrier and avoid an audit or serve the best interests of the patient and provide the additional care. Everyone from the risk managers and lawyers at the hospital to the agents for the insurance companies to the physicians own colleagues are there to pressure the physician away from delivering service that might offend the sensibilities of the insurance carrier. In the end, the patients suffer. For this reason I like to call Medicare Mediocre care.
In short, Medicare bureaucratizes the practice of medicine. It replaces independent professional judgment with a one size fits all approach to care. Assume for the moment that a person had a massive heart attack, survived, and is scheduled for rehabilitative therapy that the physician thinks should continue for a year. If the carrier finds that the typical length of rehabilitative therapy for a recovering cardiac patient is three months, it is likely that the physician will limit his prescription to three months, thereby avoiding the risk of being viewed by the carrier as an outlier and triggering an audit. The patient is the big loser in this bureaucratic system.
When a medical system is not patient-centric, it is imprecise, hit or miss. It may be that most patients can manage, but what about those who cannot survive without exceptional care? What about those who risk the onset of secondary disease states or no return to complete health because exceptional care was not offered? Medicare and the expansion of Medicare that is to come from the Health Care Reform law makes the needs of the patient and the judgment of the physician secondary to the desires of the insurance carrier, an institution that has a financial interest in finding ways to limit payment for care as much as possible.
The new system thus involves an inherent conflict of interest. It is the insurance carrier's financial interest to limit pay-outs for care. Thus, the carrier aims to construe appropriate care to involve less of it or less costly means to achieve it. Consequently, the best care, the care that a physician would deem most appropriate, is oftentimes factored out of the equation. To ensure payment for a service, a physician must satisfy the insurance carrier's requirements and if those requirements compel less than adequate care, then the physician more times than not will supply that less than adequate care. He must if he intends to succeed in practice. He may well not be able to survive even one Medicare audit, let alone the negative scrutiny that will follow him thereafter if he does not meet the one size fits all standard imposed by insurance carriers.
For the heroic physician, the one who will supply exceptional care and risk the audits, there is a horrific struggle ahead. When Medicare demands reimbursement, it tells the physician that if he does not pay all money demanded upfront, he will suffer an exorbitant monthly interest charge. Moreover, if he fails to pay long before a court adjudicates the issue, he will be blacklisted (placed on a national list of physicians charged with Medicare abuse), will have his tax refunds withheld, and will be at risk of additional audits.
When he appeals, he must first appeal to the insurance carrier, then to another carrier, then to the Social Security Administration's administrative law judge, then to the Medicare Appeals Panel, and only thereafter (assuming no remand to the ALJ) on to a court. This can take the better part of a decade and cost upwards of a million dollars in legal fees or more. The cards are squarely stacked against any physician who would dare provide exceptional care to a patient.
That dreadful system is soon to become universal. We would do well to hope that the state attorneys' general suits or the suits brought by private litigants prevail. In the end we should hope that the composition of Congress changes so that the law may be repealed.
© 2010 Jonathan W. Emord - All Rights Reserved