Physician Retirement Planning Basics

As the tax year ends, it’s time for physicians to think about retirement planning. To help, I asked wealth manager Scott Wisniewski to offer some tips.

Martin Merritt: What types of retirement savings plans are available?

Scott Wisniewski: The type of plan available to a physician will depend on his employment status.  For those that are W-2 (taxes withheld by an employer), a 401(k) may be an option for saving for retirement.  Physicians that are self-employed and receive 1099 income as an independent contractor have more options for contributing to retirement such as a SEP IRA, solo/individual 401(k), profit sharing plan, and cash balance plans.

MM: What are the advantages/drawbacks of each, especially concerning the amounts available to contribute each year?

SW: Below are the IRS’ annual limits for contribution amounts in 2013 and 2014:

W2 employees:
401(k)/403(b): $17,500 (or $23,000 if age 50 or over)

SEP-IRA: Lesser of 1) 25 percent of compensation, or 2) $51,000 (for 2013; $52,000 for 2014)
Solo 401(k): Combination of 1) 100 percent of compensation up to $17,500 for 2012 and 2014; or $23,000 if age 50 or over and 2) employer contributions up to 25 percent of compensation as defined by the plan (for self-employed individuals, compensation is defined as net earnings from self-employment after deduction both one-half your self-employment tax, and contributions for yourself). Total contributions, not counting catch-up contributions, cannot exceed $51,000 for 2013 and $52,000 for 2014. 

Cash Balance Plan:
Below are illustrative 2013 plan year contribution limits for combination plans under near optimum conditions:

*Different amounts will result for each plan combination, depending on normal retirement age, interest rates and credits, employee group demographics, and benefit levels for non-highly compensated employees.

A consideration: A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that the limits on elective deferrals are by person, not by plan.

As you can see, the plan limits can vary.  The advantage of all of the plans is that contributions are made tax-free, therefore the higher the contribution the lower taxable income will be.  Also, the account grows tax-free.  On the other hand, you can’t access the funds before age 59.5, except for some limited circumstances, without paying a 10 percent penalty (plus the taxes due).  Also, depending on which plan you participate in, the calculations can be complex. 

Consulting with a tax adviser and financial adviser is recommended. 

The most complex of all is a cash balance plan.  The average physician probably won’t benefit from one simply because they don’t make enough. 

For self-employed individuals establishing a plan, the investments held within the account must be self-selected or consultation with a financial adviser should occur.    

MM: How much should a physician contribute?

SW: It will vary based on a number of factors such as age, income, debt, risk appetite, current standard of living, etc. 

What is certain is physicians get a late start to the retirement game.  Because they typically do not start earning relatively higher levels of income until their early thirties, their retirement goals call for a higher contribution rate.  It is not rare for a physician to contribute more than 20 percent to 30 percent of her pre-tax income toward retirement. 

Attempt to build a portfolio that equates to 20 times your annual income pre-retirement.  We find many physicians are unaware of the considerations that must be accounted for when making retirement projections.  Most individuals aren’t armed with the information as to how much needs to be contributed and what end (portfolio) value specific assumptions will achieve (age, investment returns, volatility, contribution rate, etc.).  A competent financial adviseradviser should be able to compute different outcomes that will assign a probability to each scenario.

Be aware that the more that is contributed toward tax-deferred retirement accounts the lower taxable income will be.  If a physician’s federal and state marginal income tax rate is 40 percent, and his annual income is $250K per year, contributing $50K toward a SEP-IRA could knock $20K off his tax bill.

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‘Serious’ Attempts to Capture Patient Copays at Your Medical Practice

Last week’s discussion of the ethical and contractual considerations when patient copayments are routinely forgiven left on unanswered question: “What efforts to collect coinsurance payments are required of you, in keeping with you obligations to the patient and the insurance plan.” In a recent case filed in Houston federal court, North Cypress Medical Center v. Cigna, 4:09-cv2556, an insurance plan refused to pay between $20 million and $30 million in out-of-network hospital charges because the medical center did not seriously attempt to collect coinsurance payments from patients.

The controversy centered on language in the insurance contract to the effect that Cigna would not be obligated to pay any amount for which the patient was not obligated to pay. At the time of admissions, the medical center informed patients that the patient would remain responsible for any amounts which were not covered by insurance. In other words, the patient actually incurred the debt and was obligated to pay it. However, Cigna sent out 62 survey letters to patients and 27 reported that if they were billed at all, the amount of the bill was closer to the “in-network” rates. Cigna argued that it does not matter that some patients sign forms stating they are responsible for the bill, if in reality, the patient was never under any serious threat of collection activities. The court sided with Cigna and the case is being appealed.

The court did not state what collection efforts would have changed the outcome, but seemed to be persuaded by two factors:

1. The medical center ignored the “in-network/out of network” cost-savings structure of the health plan. Cigna wrote the plan in a way to discourage out-of-network utilization. The medical center appears to have frustrated this plan provision. If the medical center did attempt to collect, Cigna successfully argued it attempted to collect too little.

2. The specific evidence persuaded the courts that patients were never in any imminent danger, in the real world, of being required to pay the bill.  

So what must you do, in the real world so to speak, in addition to creating a bill and sending it to patients? Until a more solidly developed body of case law exists, the best course of action is to simply ask each insurance company to tell you what is expected of you. This places the insurance company in a somewhat delicate position. If the insurance company is too harsh, demanding, for example, that you turn each patient over to collection agencies or worse, file a lawsuit, this might have negative consequences for the insurance company. People might not wish to do business with such a company.

Hopefully, the insurance company has already though of an answer and will be happy to tell you what it is.

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Forgiving Patient Copays Can Lead to Unforgiving Consequences

At one time in America, there was no such thing as “health insurance.” Patients negotiated directly with hospitals and doctors, and paid what they could, often on a sliding scale, according to ability. Eventually, health insurance entered the market, easing the burden of healthcare costs.

It didn’t take long to realize the ordinary rules of supply and demand would not apply, if the insurance company, not the patient, was responsible for the bill. Copayments, deductibles, and coinsurance developed as a check against overutilization. If the patient had some “skin” in the game, this would provide some disincentive, though not absolute, but some hedge against over-use. This protective requirement, though necessary, is at times at odds with AMA Code of Ethics Opinion 8.03, which holds: “The primary objective of the medical profession is to render service to humanity; reward or financial gain is a subordinate consideration.”

In the current economy, as available dollars are becoming scarce, insurance carriers have begun checking up on the collection of copayments, deductibles, and coinsurance. With greater regularity, physicians and hospitals are receiving letters requesting proof, in perhaps five randomly selected cases, that the provider has collected, or sufficiently attempted to collect the portion of fees which is the patient’s responsibility. This comes as a shock to many providers, who in keeping with Opinion 8.03, and the historical tradition of sliding scales, based upon ability to pay, have subordinated financial ability to pay in favor of the higher duty to care for the patient’s need.

It is important to understand, however, forgiveness of copayments could land you in hot water. Therefore, doctors must understand the rules regarding waiver of copayments. AMA Opinion 6.12 addresses the ethical considerations:

Opinion 6.12 – Forgiveness or Waiver of Insurance Copayments

Under the terms of many health insurance policies or programs, patients are made more conscious of the cost of their medical care through copayments. By imposing copayments for office visits and other medical services, insurers hope to discourage unnecessary healthcare. In some cases, financial hardship may deter patients from seeking necessary care if they would be responsible for a copayment for the care. Physicians commonly forgive or waive copayments to facilitate patient access to needed medical care. When a copayment is a barrier to needed care because of financial hardship, physicians should forgive or waive the copayment.

A number of clinics have advertised their willingness to provide detailed medical evaluations and accept the insurer’s payment but waive the copayment for all patients.

Physicians should be aware that forgiveness or waiver of copayments may violate the policies of some insurers, both public and private; other insurers may permit forgiveness or waiver if they are aware of the reasons for the forgiveness or waiver. Routine forgiveness or waiver of copayments may constitute fraud under state and federal law. Physicians should ensure that their policies on copayments are consistent with applicable law and with the requirements of their agreements with insurers.

Where the insurance contract requires a doctor to make reasonable attempts to collect the patient’s portion, an open question surrounds the definition of “reasonable attempts to collect the debt.” Historically, doctors could satisfy the requirement by sending at least three letters attempting to collect the debt. However, the Office of Inspector General (OIG) has taken the position that the routine waiver of copayments could constitute a criminal kickback in Medicare cases.

This has emboldened private insurers, who are relying upon this contractual provision as a basis for a post-payment recoupment audit. If a provider cannot demonstrate efforts to collect from the patient, the carrier may demand a refund for any benefits paid across a large patient population.

Providers should be aware of this new emphasis upon patient responsibility. My advice would be to proactively get ahead of the problem. Contact your insurance representative to find out what is expected of you and document the response. By all means, if you are a physician and you receive a letter from an insurance carrier requesting proof of attempts to collect, do not ignore it. A failure to cooperate could constitute grounds for termination of the contract with the payer.

Because this emphasis upon collection of copayments is a fairly recent phenomenon, even if you have been deficient in the past, you may be able to satisfy the carrier by demonstrating a corrective plan of action going forward.

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Why the New Compounding Pharmacy Law Matters to Physicians

On November 28, President Obama signed into law the Drug Quality and Security Act (formerly HR 3204) which strengthens the provisions of the Food, Drug, and Cosmetic Act relating to the safety of compounding pharmacies. The new law is important to physicians both as prescribers of compounding pharmaceuticals, and as potential passive investors in compounding pharmacies.

The Food and Drug Administration (FDA) immediately outlined plans to encourage large-scale compounding pharmacies to register with the agency and agree to increased federal regulations. The oversight comes in response to a fungal meningitis outbreak last year that killed 64 people and sickened more than 750 others across the country. The source of the outbreak was traced to tainted steroid injections mixed by the Framingham, Mass.-based New England Compounding Center.

A section of the new Drug Quality and Security Act allows large drug-compounding plants, which mix ingredients to make a custom blend of medicine, to register as “outsourcing facilities” and be subject to FDA oversight, including inspections and compliance with “current good manufacturing practices.”

“We will be encouraging healthcare providers and health networks to consider strongly purchasing compounded products from FDA-registered and regulated facilities,” FDA Commissioner Margaret Hamburg said, according to USA Today. “This will be a critical step they can take to better assure the health and safety of their patients.”

Outsourcing facilities will also be required to report specific information about the products they compound, including a list of all the products compounded during the previous six months, and details about the source of the active ingredient, as well a report known as adverse effects.

“We can say that it will be difficult for us to identify a compounding pharmacy that chose not to register as outsourcers and that try to hide out in the category of traditional compounders,” she says. “In those cases, we won’t be able to do proactive inspections of them. We’ll have to wait until we hear about them through either an adverse quality or report complaint.”

That has been a chief criticism of compounding pharmacy law. The federal government lacked the authority to regulate local compounding pharmacies, and state and local governments lacked the sophistication and budget to protect the public from unsafe manufacturing practices.

In fact currently, according to Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, the FDA doesn’t know for certain how many compounding pharmacies exist in the U.S., USA Today notes. She adds that the number could range from 700 businesses to 1,000 such businesses. Hopefully this new law will improve reliability and safety of compounding pharmaceuticals.

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Why United Healthcare Sent Termination Letters to Doctors in 10 States

An “elevator speech” describes your business in the time it takes to ride down an elevator. Everyone in business needs one. As a health lawyer, my elevator speech used to involve “medical ethics,” and perhaps a mention of “Stark Law,” and “denial of doctors’ health insurance claims.” Now I simply say, “My law practice focuses on keeping doctors out of the jail house, poor house, and nut house … and I haven’t lost one yet.” 

After the Affordable Care Act (ACA), all the “ill” that insurance companies once visited upon the insured, merely got transferred to the backs of doctors. 

The ACA sought to prevent the denial of coverage on the basis of “pre-existing conditions.” Gone would be the rescission of the insurance contract for some failure on the part of the insured. Horror stories abound, such as the patient who failed to disclose a cough in an application, which led to the rescission of the patient’s policy 15 years later, when the patient got sick and needed benefits.

When a door closes, however, a window usually opens, as is the case with insurers under the ACA.  Instead of pouring over the insurance application looking for a reason to deny coverage, carriers now pour over the doctor’s chart, looking for a reason to recoup payment across a large portion of the doctor’s paid claims. Any ambiguous contract provision may be seized upon as an excuse to deny payment for services provided in good faith.

So it comes as something of a relief this week (at least “relief” from all the accusations and blame), when UnitedHealthcare candidly announced the reason for termination of contracts with Medicare C providers across 10 states.

The company cited “significant changes and pressures in the health-care environment,” and “pressure from the federal government.” (Translation, “We just can’t pay our bills.”) Thank you! If you are going to do something rotten (like fail to pay your bills, or fire someone because you don’t have enough money to pay them), at least try to be honest, and leave them with a little dignity.

Trouble is, United isn’t broke. UnitedHealth Group reported a third-quarter profit of $1.57 billion last month. Chief Executive Stephen J. Hemsley has issued cautious outlooks for 2014, citing expected cuts in Medicare payments tied to the Affordable Care Act. So United had to fire doctors in 10 states because sooner or later, it might not be able to afford to keep them.

There is a difference between “predicting” insolvency and “experiencing” it. United promised to take care of people and it didn’t. One would think it might have a better reason.

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AAPS Announces Court Challenge to Obamacare

This week, Jane Orient, M.D., executive director of the Association of American Physicians and Surgeons (AAPS) offers Physicians Practice readers insight into the group’s latest challenge to the Affordable Care Act (ACA) announced Oct. 28, 2013.

Martin Merritt:  What is the AAPS’ challenge to the ACA about?

Jane Orient:  The separation of powers requirement in the Constitution prohibits the Obama administration from rewriting the laws. Only Congress is authorized to make law, not the executive branch. Someone needs to stand up against the Obama Administration rewriting the laws, and the AAPS is taking the lead.

We believe the employer and individual mandates are void, i.e., non-existent, based upon the failure of Congress to adhere to the lawmaking procedures specified in the Constitution. Article I, Section 7 prevents: (1) the Senate from originating revenue bills, id. at cl.1 (“Origination Clause”); and (2) Congress from simultaneously enacting a provision and revision of that provision within the same bill id. at cl. 2 (“Presentment Clause”). The ACA is so long and complicated, and its final amendments were drafted and inserted with such haste, that many fine and conscientious members of the House and Senate did not recognize that the Origination and Presentment Clauses were violated by the enactment of the mandates. Compliance with these constitutional provisions is not optional.

MM: AAPS opposition to the ACA should come as no surprise to anyone following the arc of Obamacare.  Your organization has been one of ACA’s most outspoken critics. What is it specifically about the law that you find objectionable?

JO: Since 1943, the AAPS has been dedicated to the highest ethical standards of the Oath of Hippocrates and to preserving the sanctity of the patient-physician relationship. The physician cannot serve two masters — the third party and the patient. The ACA greatly expands government intrusion into medicine, attempting to dictate what services may be offered and even how the medical record must be kept. It spells the end of confidentiality and greatly restricts patients’ freedom. It is deliberately designed to “transform” medicine. The Oath of Hippocrates is seen as an impediment.

MM: If something isn’t done to rollback or repeal the ACA, what do you think the future holds for physicians?

JO: Physicians who are not able to escape the tentacles of the ACA and maintain a direct relationship with patients will be government serfs, spending most of their time and energy complying with bureaucratic diktats. Attempts to put patient interests first will be punished by pay cuts, fines, and even exclusion from practice. As true insurance is destroyed and Americans are impoverished, few will have the means to escape the compulsory, overpriced “health plans” in which they are entrapped. Many physicians will close their practices, either leaving medicine or becoming wage slaves to big organizations accountable to government or government-controlled paymasters. The most capable young people will avoid medicine. Increasing amounts of wealth will be squandered on activities of no benefit to patients, and politics will be a constant feature as various interests fight over access to diminishing resources.

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Ethics on Ending the Patient-Physician Relationship

Once you accept a patient into your practice, you are under an ethical and legal obligation to provide services to the patient as long as the patient needs them.  There may be times, however, when you may no longer be able to provide care.  It may be that the patient is noncompliant, unreasonably demanding, threatening to you and/or your staff, or otherwise contributing to a breakdown in the patient-physician relationship.  

Regardless of the situation, you must avoid a claim of “patient abandonment.”  Abandonment is a tort, similar to negligence, defined as the termination of a professional relationship between physician and patient at an unreasonable time and without giving the patient the chance to find an equally qualified replacement.

There must be some harm from the abandonment.  The plaintiff must prove that the physician ended the relationship at a critical stage of the patient’s treatment without good reason or sufficient notice to allow the patient to find another physician, and the patient was injured as a result.  Usually, expert evidence is required to establish whether termination happened at a critical stage of treatment.

A physician who does not terminate the patient-physician relationship properly may also run afoul of ethical requirements, and find himself before the medical board.  According to the AMA’s Council on Ethical and Judicial Affairs, a physician may not discontinue treatment of a patient as long as further treatment is medically indicated, without giving the patient reasonable notice and sufficient opportunity to make alternative arrangements for care.  Further, the patient’s failure to pay a bill does not end the relationship, as the relationship is based on a fiduciary rather than a financial responsibility. 

According to the AMA’s Code of Medical Ethics, Opinion 8.115, you have the option of terminating the patient-physician relationship, but you must give sufficient notice of withdrawal to the patient, relatives, or responsible friends and guardians to allow another physician to be secured.

The Health Care District of Palm Beach County offers this advice regarding the appropriate steps to terminate the patient-physician relationship:

1. Giving the patient written notice, preferably by certified mail, return receipt requested;
2. Providing the patient with a brief explanation for terminating the relationship (this should be a valid reason, for instance non-compliance or failure to keep appointments);
3. Agreeing to continue to provide treatment and access to services for a reasonable period of time, such as 30 days, to allow a patient to secure care from another person (a physician may want to extend the period for emergency services);
4. Providing resources and/or recommendations to help a patient locate another physician of like specialty; and
5. Offering to transfer records to a newly-designated physician upon signed patient authorization to do so.

Following this protocol may be easier in some situations than others.  For example, if a physician has signed a covenant-not-to-compete, chances are the employer will not hand over the patient list upon notice of departure.  In instances such as these, you (in consultation with your attorney) may want to provide a model patient termination letter to the party withholding your patients’ addresses, and request that the addresses and letter be merged for distribution to your patients. 

Ideally, you should not be in a contractual arrangement that makes contacting your patients difficult.  However, if you find yourself in this situation, work with an attorney to ensure that appropriate steps are taken.

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The Evolution of Government Intrusion on the Medical Profession

This week found me sitting alone in our law firm library, preparing to defend a physician before the Texas Medical Board. In an era of electronic research, both legal and medical, it is rare to find anyone, (other than me), in the library. I not only enjoy flipping through real pages; some of which were bound and placed on these shelves 70 years ago, I enjoy getting momentarily sidetracked from my original mission.

I picked up this habit as kid reading the World Book Encyclopedia. Regardless of what I might be looking for, I would always stop and absorb eight to ten articles, just to learn about some historical fact I didn’t know existed.  

This week, flipping through historical reports of medical ethics cases, many dating to the 1950s, I began to see a clear picture of something I wasn’t expecting to find.  Virtually every federal regulatory concern currently plaguing the modern practice of medicine also existed in some form in the 1950s.

Comparable to Medicare RAC and external audits; physicians were losing their practices for improper charting and documentation. However, these losses usually pertained to life-and death matters, such as the prescription of narcotics. “Off-label promotion,” similar to the fen-phen scandal, usually concerned mundane, unapproved uses of common household remedies.

For example, a physician in the 1950s lost his license for charging patients $49 each for a treatment to remove gallstones using olive oil. (The board found that the oil, mixed with stomach acid, actually produced “soap balls,” not gallstones, as the physician improperly claimed.)

“Bundling and unbundling” issues were also present sixty years ago when a physician was disciplined by the board for routinely including fee-for-services charges that were already billed to the patient as part of the hospital’s charges.

Time and again, modern coding, charting and regulatory issues “pop” from the pages of history. Some cases represent quaint precursors to FTC “advertising” regulations. These appear as ethics disputes over the size of the lettering appearing on a physician’s office window, to questions about the exact line between acceptable public service promotion and impermissible advertising.

Half a century ago, one party was notably absent from the dusty pages of medical ethics cases: the federal government. There is a reason for this. Until the post-Civil War period of reconstruction, no federal laws governed a person’s conduct in any way. Slowly, beginning with the regulation of racially motivated murder, and laws pertaining to civil rights violations, Title 42 of the United States Code (containing laws related to civil rights and health and human services), began to grow in size and scope.

Today, in addition to racial offenses (42 U.S.C. §1983); Stark Law (42 U.S.C. 1395nn); the Anti-kickback Statute, (42 USC § 1320a–7b); HIPAA (42 U.S.C. § 300gg); and the Medicare law (42 U.S.C. 1395) are located in the growing Title 42 of the United States Code. 

Many fear, and rightly so, that as healthcare insurance exchanges offered at become fully operational, the federal takeover of the practice of medicine will soon be complete.

In the not-too-distant future, the common law principle, “A physician and patient are free to contract for services in any way they see fit,” will seem just as quaintly anachronistic as limits on the size of lettering on a physician’s office window.

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The Basics of Physician Asset Protection

The American civil justice system unquestionably disfavors those with accumulated assets. This idea can be summarized in two words: “deep pockets.”

Whether through malpractice lawsuits, Stark Law administrative penalties, or “whistleblower” Anti-Kickback Statute lawsuits, physicians today face an unprecedented risk of loss of life savings. There is good news, however; the law provides a means of protecting assets against catastrophic misfortune.

Robert Feiger, JD, LLM, partner with the Dallas law firm of Friedman & Feiger, explains here what physicians can do to protect accumulated assets from judgment.

Martin Merritt: Why does a physician need an asset protection attorney?

Robert Feiger: Choosing the right attorney can help protect the assets the physician client has accrued over the years during medical practice from the threat of a potential judgment creditor.  Physicians may lawfully take advantage of many different asset-protective approaches, but obtaining guidance from an experienced attorney, who can create the various legal entities which may be protective of accumulated assets is paramount.

MM: What exactly is “asset protection?”

RF: “Asset protection” involves financial and estate planning which is proactive toward the goal of protecting a physician’s life savings to the fullest extent permitted by law.  

The creation of a “trust” is one example. A “trust” often splits the beneficial enjoyment of trust assets from the legal ownership. The physician and his family own the beneficial equitable interests in the trust assets, but they do not hold legal title to the assets. Because of this
split, the trust assets are not counted in satisfaction of a judgment. This insulates assets from claims of creditors without concealment, or tax evasion.

MM: What happens when a client comes to see you for the first time?

RF: I take a “holistic approach” with respect to the subject of developing an asset protection/estate plan for a prospective client. That is no different in many respects from what a physician client is required to do by conducting a thorough examination of the patient so as to properly diagnose their medical problem. The attorney is required to do much the same thing by examining, among other things, the net worth of the client and determining what the client’s goal are prior to recommending the most efficacious asset protection and estate plan for the client and the client’s family. After all, if a client is not successful in protecting her estate built up during her life against future creditors, there may well be nothing left at the client’s death to justify protecting the client against possible estate tax.

MM: Are there time-sensitive issues related to asset protection?

RF: Ideally, the most beneficial time to have any meaningful discussion with a client regarding the subject of asset protection is when the horizon is clear ahead. That is, when there is nothing either threatening, pending or filed against the client. However, that is not necessarily the luxury that a client has in each and every instance. So a discussion on this particular subject matter should be had at any time as long as the client fully understands the potential problems inherent in doing nothing to protect himself.

Feiger’s answers were provided as a general discussion on this subject matter and are not intended to serve as, nor relied upon as legal advice.

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Time to Cut Physician Reimbursement Red Tape

This week’s headlines trumpeted, “Computer glitches, overloads hit health care exchanges.” Meanwhile, other headlines note that little else is working in the federal government because of a government shutdown. This is not the first time in history the federal government has shut down; it used to happen regularly during the Reagan administration.

The shutdown does tend to obscure what I think is the more interesting addition to the healthcare landscape: there is now such a thing as “”  On Tuesday, Oct. 1, 2013, for the first time in history, the federal government became involved in providing healthcare insurance for average, working-age Americans.

If you want to know more about the program, just take a look at the government’s YouTube page and you will see why people at HHS are so happy. Actors in upbeat videos portray good, hard-working Americans who love the peace of mind which comes with receiving things they can’t possibly afford.

Technically, just like the actors pictured in these videos, Americans are supposed to purchase insurance through the newly-created exchanges, and then receive an income-adjusted refund at tax time. But the government, having actually met the people portrayed in the videos, has decided no real person would ever buy insurance unless the tax credits were applied each month, in order to lower each month’s premium payment. I think that means that the happy people depicted in the videos will pay a small amount, and the government will be paying an insurance company for the remaining cost of the policy. 

As a new era dawns with the creation of healthcare insurance exchanges, this would also be a very good time to take a serious look at putting more money into the pockets of hard-working physicians by addressing the horrid state of claims processing in this country.

The AMA reports the average solo physician practice spent $70,000 in 2006 simply trying to get paid. An in-house attorney doesn’t cost $70,000 in many areas. Why does each physician spend this much fighting to get paid? The answer lies with the original masters of “gamesmanship” in the claims denial process: HHS.

Somewhere between the creation of Social Security in 1935 and the mid-1980s, the government figured out it pays to “just say no” to Social Security disability claimants. When even legitimate claims were denied, many people would simply give up and go away. This is a technique most every physician knows all too well.

As we begin to correct the bugs in the health insurance exchanges, it is time to also give some thought to reducing the $70,000 paid by each solo physician in the fight to get paid.

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