Medicare Already Does It (Limiting Individual Prerogatives, Part 4)

DrRich | April 28th, 2010 - 10:11 pm


Part 1 of Limiting Individual Prerogatives

Part 2 of Limiting Individual Prerogatives

Part 3 of Limiting Individual Prerogatives

DrRich could go on and on about how our government is intent on restricting the right of individuals to spend their own money on their own healthcare, but (for now, at least) this will be the final post in this series. DrRich has made his point.

Even some of his critics, who have accused DrRich in the past of being overly paranoid on this topic, seem to have gotten it. Some who previously were quite vocal have remained suspiciously silent. Others have fallen back to quasi ad hominem accusations (suggesting, for instance, that DrRich must be a follower of Mr. Beck, with all the horrific connotations that condition entails). And then there is the esteemed Praveen (author of the excellent True Cost Blog), who conceded as follows: “Massachusetts’ attempt to ban direct pay is both unfortunate and unconstitutional. Perhaps you’re right, and the bureaucrats are sneakier than I think.”

So maybe DrRich should just declare victory and move on.

But it is important to make one final point, namely: the notion that our government is intent on limiting our individual healthcare prerogatives is far more than just one of DrRich’s theoretical constructs. Indeed, our government has been acting on this intent for over 15 years. The main case in point, of course, is Medicare.

It has always been recognized that every American citizen “is the proper guardian of his own health,” (Supreme Court Justice Joseph Story, 1873), and accordingly, has a natural right to employ his own individual resources to that end. Roe v. Wade, for instance, was a particularly explicit recognition that a woman has a fundamental right to purchase medical services which she determines to be necessary for her own well-being.

Indeed, when Medicare became law in 1965, Congress also explicitly recognized this right, stipulating that nothing in the new law “shall be construed to preclude [an individual] from purchasing or otherwise securing protection against the cost of any health services.” (DrRich reminds his readers once again that a bold, restrictive statement like this, appearing in legislation, generally heralds an outcome opposite to the statement itself.)

DrRich has already pointed out that under Hillarycare, private medical practice would have been nearly criminalized out of existence. So one ought to expect that the Clinton administration would view an individual right to purchase healthcare as a threat. And indeed, it did. But, as it happens, the erosion of the rights of Medicare “beneficiaries” began even before the Clinton administration. (And even again, DrRich must remind his readers that any universal healthcare plan, even under a Republican administration, will always tend to limit individual liberties.)

In 1991, Medicare administrators published a “carrier bulletin” warning physicians that direct-pay contracts between patients and doctors were strictly prohibited, unless the contract was initiated solely by the patient, and even then, payment rates must be set by Medicare, and further, if the patient later became dissatisfied with that (patient-initiated) contract, Medicare would severely (and retroactively) sanction the physician.

When physicians sued Medicare to prevent this odious new policy from being implemented (Stewart et al. v. Sullivan), the government took the position that it had, in fact, not made any new policy after all, arguing that stuff that shows up in its “carrier bulletin” doesn’t really count. But once this argument was successful in having the lawsuit thrown out in a summary judgment in 1992, Medicare then cynically turned around and immediately made that selfsame new policy “official,” by publishing it in their 1993 Medicare Carrier’s Manual.

But the Feds were still not satisfied. The new, restrictive policy technically still allowed private-pay contracts, as long as the patient initiated them. So the Clinton administration engineered an amendment to the Balanced Budget Act of 1997 – Section 4507 – which prohibited any self-pay contracts whatsoever between Medicare patients and their doctors for medical services which are covered under Medicare. Under Section 4507, which is still the law today, if a doctor provides even one self-pay medical service to a single Medicare patient, that doctor is punished by complete banishment from the Medicare program for at least two years.

The federal government was eventually challenged again in court over Section 4507, but that lawsuit was also thrown out in a summary judgment. The rationale the government offered to the court in justifying its restrictions on individuals’ prerogatives, however, is instructive: “…what you will have is a system whereby the rich can buy what they want and those many beneficiaries who are on fixed income will not be able to afford those services” (United Seniors Association et al. v. Shalala). So again, the interest of the collective (“social justice”) was invoked to justify a law which stifles an individual’s fundamental right to purchase medical services he or she determines to be necessary for his/her well-being.

In any case, since 1997 Medicare patients have been able to purchase Medicare-covered services for themselves ONLY if they obtain that service from a doctor who agrees to opt out of Medicare entirely. This severely limits a patient’s opportunity to self-pay for covered services. The fact that Medicare patients can still buy these medical services from direct-pay physicians, however, is one reason the government hates direct-pay practices, and wishes to stamp them out. More importantly, while some primary care physicians have indeed opted out of Medicare in order to establish direct-pay practices, this path is not a realistic option for medical specialists. So in practical terms, the only “covered services” available for self-pay by Medicare patients, on even a limited basis, are primary care services.

There are several legitimate reasons a Medicare patient might want to self-pay for a medical service that is covered by Medicare. If Medicare “covers” heart valve surgery, for instance, a patient might want to pay for a new, minimally-invasive surgical approach that is inadequately reimbursed by Medicare, rather than the big, open-heart surgery that Medicare reimburses fully. Or, one might want to self-pay for “covered” psychiatric care, or for treatment for a venereal disease, in order to keep embarrassing or harmful medical records out of government-controlled databases.

Furthermore, it is important to recognize that just because a healthcare service is “Medicare-covered” does not mean that it will be covered for a given patient. Whether a specific individual is covered is often determined by a “medical necessity” ruling, made by a bureaucrat. Section 4507 essentially precludes a patient’s ability to purchase a denied (but “covered”) medical service, no matter how badly they want it, or believe they need it.

One can argue, and with some merit, that at this juncture denials of medically necessary services by Medicare have been relatively judicious, and therefore that the “Section 4507 rule” has not had much of an actual impact. In fact, it is likely that most Medicare beneficiaries do not even know that this rule exists.

But while its impact might be relatively small so far, the Section 4507 rule has now been in place for 13 years – it is well-established. So, once Medicare begins reducing reimbursements to physicians and hospitals, to the point where they can no longer afford to offer certain services to Medicare patients (and Medicare has just recently begun doing so, specifically, for some cardiac imaging studies), those patients will be left in the cold. Services which are officially “covered” by Medicare, but which are reimbursed at such a low rate that they cannot actually be provided to them, will become unavailable even to Medicare patients who are willing and able to pay for those services.

DrRich’s main point, once again, is that our government has a deep and abiding need to limit our individual prerogatives when it comes to our healthcare, and has been acting on that need for a long time. The principle for these limitations on our individual liberties, the principle of social justice, has already been established, and has survived court challenges.

Extending these limitations on personal liberties to Obamacare, and broadening their usage, will not require any major changes in direction, or principles, or policy, but will merely require an expansion of already existent – and even “venerable” – rules, rules which have been an established part of Medicare for many years.

DrRich has expressed the idea that such restrictions by our government on such fundamental individual liberties are a very big deal indeed, and, in fact, signal an end to the Great American Experiment. His critics admonish him, however, that he makes too much of it, that, presumably, our government in its benign wisdom is just doing what’s best for us.

DrRich begs his readers to forgive him if he sees, in such a reply, even more evidence that the only nation in the history of mankind to be founded on the principles of individual freedom is well on the way to abandoning those exceptional principles, for the sake of the same, soothing-but-empty blandishments that have been offered, throughout human history, by well-meaning people who end up producing – or becoming – tyrants.

6 Responses to “Medicare Already Does It (Limiting Individual Prerogatives, Part 4)”

  1. [...] screw up medical practices that allow their patients to pay on installment.  All of a sudden, Dr. Rich’s conspiratorial rhetoric becomes the tiniest bit more believable.  Payment plans are a great way to make out-of-pocket [...]

  2. joan says:

    I don’t think you’re a Beck follower. I think you’re his brother.

    • John Galt says:

      I despise people who get into my private business and insist I do as they want me to. The day is coming when this is going push us over the edge and it will cost somebody dearly. It will be our personal blow for Freedom. There is a Revolution coming and people who so profoundly disrespect those like us will learn the error of their ways–albeit too late for them to profit by it.

  3. Danielle says:

    There are MAJOR legal and ethical issues that should be considered in self pay only physicians.

    Certain states protect enrollees in particular private insurance plans from being billed for any sums beyond what the insurance company pays, except for co-pays and deductibles.

    Some physicians have found the self-pay model is a way to regain meaning in and control over their practices, as well as to reestablish a physician-patient relationship in which there is “time to care”. They are beginning to “sell” their servives by branding their practice as “more ethical”
    This may seem appealing to a patient, however, the discretion of care, and billing is left soley to the physisian whom the patient is reliant upon to provide a service and fairly bill for the service.
    It is especially concerning in the mental health field where it appears the majority of therapists and physcatrists who require a patient to use them a a “team” in order to receive care.
    Another option which I am finding is physicans are not accepting health insurance by combining a self-pay model with a retainer practice. This hybrid practice allows patients who could not afford a monthly retainer fee, to still receive care only pay for the medical care provided. However, there are frequent practice changes which leave room for more ethical and legal issues to arise and the consumer is open to fraud.

    It is severely limiting a consumers ability to find a phsyican who takes even major insurace anymore, forcing comsumers who are protected by state laws under their insurance plans to purchace even minor health care as an out of pocket expense.
    Furthermore this forces consumers into contracts with physicians.

    It’s easier for addicts to “doctor shop.” And for Doctors to patient shop based on your medical needs.

    The concern here isn’t only money, but also the quality of care and the standards consumers are assured of when they purchace insurance through agaents which act on the behalf of their consumers.
    Who are these self-pay or hybrid doctotors held accountable to for their services?
    Does this not leave open a door for pateints who “doctor shop”?
    Is is not more difficult to identify Physicans who “patient shop”?
    We already have an epidemic of individuals and physicans who sell and buy narcotic perscription drugs?
    Are other physicans who accept insurance “paying the price” for these physicans who have found a way through the “red tape” which will affect standards of care if it continues?

  4. Danielle says:

    Self pay doctors need to be regulated, so you can be assured you are receiving the best health care, and are being billed accordingly.If they choose only self pay question why? And listen carefully.

  5. truthbetold says:

    That is total nonsense. Some of the best medical care is given by self pay doctors to the most affluent of patients…

You can leave a response, or trackback from your own site.

Leave a Reply