Category: Physicians Practice

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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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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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 healthcare.gov 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 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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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 “Healthcare.gov.”  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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We all know the threat of civil monetary penalties, audits, and the ever-increasing expense and headache of regulatory compliance has led many physicians to pack up and head for the security and predictability offered by larger group employment or hospital employment. Perhaps the most important consideration is income, and the ability to save for retirement.

I recently spoke with someone who deals with this every day, physician wealth management expert, Scott Wisniewski, founder and CEO of Dallas-based Arianna Capital Management.

Martin Merritt: What are some of the considerations in selling a practice?

Scott Wisniewski: Aside from the deeply personal choice, the biggest concern for anyone in business is how they’re compensated. An equal concern is how best to accumulate the assets that will support them in retirement. The sale of a private medical practice carries the potential of a large cash infusion that could be used to jumpstart the growth of retirement assets. Particularly in the early stages of a physician’s career, the ability to save may be impacted by a variety of factors: lack of time to address planning, paying off or down loan debt, or just simply not paying attention. Gaining access to a pool of cash can address these concerns early on. In a more mature practice, equity proceeds can ensure a comfortable retirement.

Compensation concerns range from the uncertainty of private practice revenue streams balanced against the ability to deduct ongoing expenses and if available, the potential to contribute large sums to tax-deferred retirement accounts such as SEP-IRAs, cash balance plans or a solo 401(k). As an employee of a corporation, you’ll be able to expect a stable, predictable income but your retirement account contribution options are significantly different. Contributions are limited by law at lower levels than for self-employed individuals, which if free cash flow was available previously, may become a constraint on effective savings.

MM: Do you feel that associating with a larger business or hospital will positively impact physicians’ abilities to prepare for retirement?

SW: Most physicians will see an improved ability to save due to the predictable nature of their compensation.  Much will hinge on the state of the practice and the amount of disposable income, but given the vehicles available to the self-employed, the potential for significant wealth accumulation is far greater than for an employee of a corporation. While private net income may be inherently volatile, it is likely that the long term average will exceed the compensation from a corporation.  

MM: So there is a trade off: “volatility” and “risk” for lower, but stable income?

SW: That is generally true for any investment. Depending on the particular specialty of the physician, generally speaking, income from an employer (W-2 income) can be expected to be lower than that of a self-employed individual or practice (1099 income). The inherently higher tax burden associated with 1099 income is offset to a degree by the ability to deduct certain business expenses.  These are not options a physician should consider without a trusted financial advisor. Based on our conversations with physicians, when prudent financial advice is considered, the trade-off of stability for lower income doesn’t make sense in a significant number of cases.

MM: Are there exceptions?

SW: The one exception is for those who can move from front-line practice with a larger group or corporation into a managerial position. In this situation, a reduced work load coupled with stability of income can be more attractive than long hours and volatile income. A hybrid solution we’ve also encountered is choosing to work occasionally (i.e. weekends or a few shifts per month) with a large group or corporation. This supplements income without incurring the negative aspects of moving completely out of private practice. It also may provide an exit ramp in the event a sale is eventually contemplated.

For most however, the positive perks from a corporate setting don’t fully compensate for the loss of a greater variety of opportunity that can result from obtaining excellent financial advice.

Here’s a real world example: Access to a 401(k) with a match provides an instant positive return, in some cases up to 6 percent but typically more in the 3 percent to – 4 percent range. The drawback to this is that the available mutual fund investment options most likely will be relatively expensive and can be expected to provide a limited range of market exposures. By contrast, an independent financial advisor with access to low cost, well-diversified mutual fund investment options can position the self-employed physician to receive a significantly greater return on the larger pool of assets they can contribute to the wider variety of vehicles available to them. Free matching is great but not if it comes at the expense of longer term returns and certainly wouldn’t be a great reason to accept lower overall compensation.

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I must give credit to the September edition of the American of American Physicians and Surgeons (AAPS) Newsletter, for directing me toward my new favorite “neologism,” which is in turn borrowed from an article in General Surgery News entitled, “Petting the Tiger: The Age of Regulopathy”:

“In the Age of Regulopathy, hospital routine must include exercises like daily Foley Rounds, writes assistant professor of surgery Peter K. Kim, MD, of Albert Einstein School of Medicine. Whenever one is found, ‘a cracker-jack team of simulator-trained and credentialed experts arrives to deactivate the Foley catheter before the clock strikes 48 hours post-op. Surgical Care Improvement Project(SCIP) triumphs again, and a potential UTI has been averted.’  

“But there are consequences. The urinary tract infection rate went down, but so did the Foley catheter day (FCD) denominator, so the UTIR/FCD rose and had to be reported, Kim writes. Also, central line infections went down because central lines were removed, but patients became malnourished and wounds dehisced [burst or opened at the incision site].”

The basic thrust of the article suggests perhaps it would be better to put doctors in charge of patient care, rather than paint-by-number regulations, which results in a daily catheter hunt, as if Foleys were pythons. So why do we have these SCIP regulations?

A good starting point is the Deficit Reduction Act of 2005 (DRA) which requires a quality adjustment in Medicare Severity Diagnosis Related Group (MS-DRG) payments for certain hospital-acquired conditions.(Translation: CMS announced it would no longer pay for hospital-acquired infections, so hospitals better think of something quick.) The Joint Commission sprang into action and determined hospitals could save as much as $1 million in unreimbursed costs due to infection, if all Foley catheters were removed within 48 hours post op, regardless of need, or even consideration of the actual patient’s condition.

The SCIP process was explained, according to the Joint Commission’s website. SCIP is a national quality partnership of organizations interested in improving surgical care by significantly reducing surgical complications, and was created in partnership with the Steering Committee of 10 national organizations who have pledged their commitment and full support for SCIP.  (Translation: The Joint Commission thinks “regulopathy,” or the loss of physician autonomy, should be much more acceptable because a group of 10 national organizations have pledged to create a system which they can present to CMS as the method which best strips physicians of their autonomy.)

It is normally about this time in a seminar presentation, I post on a PowerPoint screen the very first promise Congress made to physicians in the opening paragraphs of the Medicare Act. And I simply sigh, as further words seem superfluous:

42 USC § 1395 – Prohibition against any Federal interference

“Nothing in this subchapter shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.”

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If it seems as though investment opportunities are flying from the woodwork these days, there’s a reason. They are. Throughout most of the 20^th century, physicians earned and enjoyed the highest level of respect from both patients and members of the business community. Sadly, as reimbursements rates drop, investment and business brokers are becoming more unscrupulous in sales tactics which offer “risk-free” investments in ancillary services providers, such as compounding pharmacies, diagnostic laboratories, or more traditional passive investments in medical office buildings, real estate ventures, hospital ownership, and a whole host of other investments.

The trouble lies in the fact that a physician’s referral or signature is required for most any medical device, test, procedure, or service which is covered by governmental medical programs (Medicare, Medicaid, Tricare, Federal Employees Health Benefits, etc.) It would then make terrific business sense to involve in the joint venture a physician who is in a position to make referrals (thereby guaranteeing the success of the venture). While this makes sense, it is also potentially (but not always) highly illegal. Sometimes, safe harbors will protect a joint venture, depending upon the structure.

Because it is sometimes difficult to tell, the OIG originally published a Special Fraud Bulletin in 1994 titled “Suspect Joint Ventures: What To Look For,” updated in 2003 in a publication titled, “Contractual Joint Ventures.”

From the standpoint of the physician investor, the OIG warns physicians to be wary of the following:

• Investors are chosen because they are in a position to make referrals.

• Physicians who are expected to make a large number of referrals may be offered a greater investment opportunity in the joint venture than those anticipated to make fewer referrals.

• Physician investors may be actively encouraged to make referrals to the joint venture, and may be encouraged to divest their ownership interest if they fail to sustain an “acceptable” level of referrals.  

• The joint venture tracks its sources of referrals, and distributes this information to the investors.

• Investors may be required to divest their ownership interest if they cease to practice in the service area, for example, if they move, become disabled, or retire.

After 25 years of helping physicians in health law transactions, I would like to add several other items to the list of suspicious sales pitches:

• Pitch: “This is an LLC (limited liability company) the most you can lose is your $10,000 investment. “

My Advice: This is simply not true. The penalties and fines are for making illegal referrals. The liability is determined by multiplying anywhere from $11,000 to $50,000 by the number of claims submitted to the government.

• Pitch: “Don’t worry, our legal department has looked at this and has given the deal the green light.”

My Advice: Never trust a salesman who says, “Don’t worry.” Get your own legal opinion from a health lawyer who only has your best interests in mind.

• Pitch: “We have been doing this deal for years and never had any trouble.”

My Advice: This is exactly why the fines are so large. It is very easy to get away with Stark Law and Anti-Kickback Statute (AKS) violations, for many years. But if you are caught, the damages are catastrophic.

• Pitch: “We have “carved out” Medicare business, so you do not have to worry.

My Advice: Remember, it is the referral which triggers the liability. Many states have AKS statutes which apply to every kind of insurance, not just Medicare and Medicaid. The AMA Code of Ethics, particularly Opinion 8.0321 may also forbid physician self-referral. Also, as the OIG pointed out in Advisory Opinion 13-03, it is possible certain carve-outs do not provide protection from Medicare and Medicaid Fraud and Abuse laws.

In sum, be careful when approached by someone offering an investment opportunity. Always consult an experienced health lawyer if you have questions.  

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What is the point of medical malpractice tort reform, if the government is simply going to replace the danger of financial ruin with newerand more creative ways to fine doctors for conduct having nothing to do with patient outcomes?

If you believe the headlines published in a recent story by The Oregonian, “Doctors who get paid by makers of artificial implants for using their product must let patients know about it, according to a first-of-its-kind legal action by the Oregon Department of Justice.”

The actual story then begins to back away from the scandalous headline, “Two Salem doctors, Matthew Fedor and Kyong Turk, agreed to pay $25,000 each to settle [an Oregon] DOJ civil case concerning pacemakers, defibrillators and related devices. DOJ continues to investigate Biotronik, Inc., the German device-maker with U.S. headquarters in Lake Oswego.”

Read a little further and we arrive at the truth: “The doctors, who both performed surgeries at Salem Hospital, were part of a Biotronik program to train and certify sales representatives to assist other doctors in programming and calibrating their products.” The payments weren’t for buying the product, but for teaching others how to safely implant and calibrate the devices, not for actually selecting the brand of implant. But still the doctors were fined by the Oregon DOJ. Really? Do we now need government agents supervising how training programs function?

According to Policy and Medicine, Oregon’s DOJ is responsible for running the “Consumer and Prescriber Grant Program,” which funds projects such as “PharmedOut” to educate healthcare professionals and consumers about the “potential” conflicts of interest or bias that may come from industry payments or support.  I will translate: The state of Oregon is providing grants which encourage the DOJ to manufacture new and unknown offenses against doctors. Out of this, the best they could come up with is the allegation that doctors didn’t work for free when training people how to safely implant the devices.

The “nanny state” is a term of derision employed primarily by conservatives to describe the intrusion of government into every facet of our lives. Ordinarily, agents of the “nanny state” simply wish to tell us “what’s best for us,” whether or not we ask for, or even want advice.

 In the healthcare sector however, the “nanny” doesn’t simply tell us how to behave -“nanny” wants to “get paid.” “With money we will get men, said Caesar, and with men we will get money.”  Thomas Jefferson wrote these words in “Notes on the State of Virginia” to warn of the concentration of power in a single governmental branch., “The time to guard against corruption and tyranny, is before they shall have gotten hold on us. It is better to keep the wolf out of the fold, than to trust to drawing his teeth and talons after he shall have entered.”

At some point, this all has to stop. Imposing fines against the medical profession isn’t simply a passing fad, it is a way for government agencies to create and keep jobs for themselves. This will continue until ether we will have no one left to fine, or the medical profession will simply surrender out of frustration, handing over the keys to the government. 

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USA Today recently reported that people have been signing up for health insurance exchanges for in excess of expected levels.

Staff writer Kelly Kennedy reports that a survey of each of the 50 states yielded 19 states reporting estimates for how many of their uninsured residents they expect will buy through the exchanges. The reported 8.5 million would far outstrip the federal government’s estimate of 7 million new customers for all 50 states under the Affordable Care Act (ACA).

In the short term, this is great news for physicians’ practices. This statistic means there will be 8.5 million new paying customers. This is even better news for physicians in states which have refused to expand Medicaid to the level mandated by the reform law, commonly termed “Obamacare.”

Prior to the law, many states were permitted to set their own limits for Medicaid eligibility. Alabama, for example, reportedly disqualified a family from Medicaid eligibility if the family earned 25 percent of the federal poverty level (about $6,000 per year for a family of four). Under the reform law, states would have been required to expand Medicaid roles to conform to a new national standard of 133 percent of the federal poverty level (about $31,300 per year for a family of four). On June 28, 2012, the U.S. Supreme Court upheld the constitutionality of most of the ACA in the case National Federation of Independent Business v. Sebelius. However, the Court held that states cannot be forced to participate in the law’s Medicaid expansion under penalty of losing their current Medicaid funding. Therefore, patients in states which did not expand Medicaid roles to include these “newly eligible” patients are able to purchase federally subsidized private plans through health insurance exchanges, which is the subject of the USA Today article.

This is good news for physicians’ practices, because Medicaid simply doesn’t pay very well (so low in fact, about one-half of all physicians would refuse to accept a new Medicaid patient. Private plans which are subsidized by the government would almost certainly provide reimbursement rates which are above the rock-bottom rates for Medicaid patients. Open enrollment begins October 1, 2013, and coverage is set to begin January 1, 2014.

Before we all get too drunk on all this free government Kool-Aid, recall that the Kool-Aid isn’t “free.” The reform law was enacted because the Medicare trust fund could not afford to pay for all the aging baby boomers set to turn 65 in the next few years.

The idea behind the law was to save Medicare by forcing more healthy Americans into the system through individual mandates, employer mandates, expansion of Medicaid for the poorest Americans, and providing health insurance exchanges for those who are just above the level needed to qualify for Medicaid. But how is this supposed to help save the Medicare trust fund? Obviously, by cutting future Medicare reimbursement rates.  But on what part of “planet crazy” does it make sense for the government to pick up the tab of the cost for all the newly insured, (which was supposed to save the system from failing, because the government is broke)?

In her book, “Your Doctor is Not In,” Jane Orient draws the analogy between our nation’s healthcare model and the one created by Ptolemy, which contained multi-layered epicycles to explain the universe. “Wheeling and whirring, the Ptolemaic universe could be turned to predict almost any observed planetary motion – and when it failed, Ptolemy fudged the data to make it fit,” Orient writes.

Here, the Obama Administration is so desperate to make the healthcare reform law work, any solution that will keep the wheels whirring, is perfectly acceptable. By the time anyone figures out it is a bad model, the president will be working on a location for his presidential library, and paying for healthcare will be the next administration’s problem.

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