Russ had been the low bidder on a government job which he finished satisfactorily, on time, for the agreed-upon price. Things went unusually well, so he made more profit than expected. The government decided that he had made too much, and not only demanded a refund but also decided to audit all his private contracts.
Jane M. Orient, MD
My reason for not accepting government money is a letter dated Feb 4, 1974, the year I graduated from medical school. My father, who owned a small contracting business, thumb-tacked it over his desk, to remind him not to bid on government jobs.
The letter from Russ Plumbing Company, one of his best subcontractors, reads as follows:
“According to your government, the powers that be have decided that we have exceeded our allowable profits in 1972 at the rate of 1/13th of 1%.
“Consequently, we have consented, under the Voluntary Compliance Agreement, to reimburse a total of $789, the amount involved, to our 1972 Contractors. We have endeavored to prorate this amount as equitably as possible.
“May we take this opportunity to mention that although we have shown a net loss for the fiscal year 1973, it does not have any bearing on the above decision.
“Enclosed herewith please find a check to cover the amount due you.”
A check for $17.90, which my father never cashed, was attached.
Russ had been the low bidder on a government job which he finished satisfactorily, on time, for the agreed-upon price. Things went unusually well, so he made more profit than expected. The government decided that he had made too much, and not only demanded a refund but also decided to audit all his private contracts. Auditors swarmed over his office. Productive work was shut down. Russ, who was a good plumber, a hard worker, and a decent, honest man, was ruined.
I need to take a look at your files
Where did the government get the authority to pass judgment on how much profit a plumber was allowed to earn? Apparently, it just assumed the power and proceeded to exercise it.
I posted a copy of Russ’s letter on my wall also, and never accepted a government check after I stopped working for the Veterans Administration and went into private practice. Until 1990, many of my patients filed their own Medicare claims. Since then, the doctor has had to file the claims, even if they are “unassigned” so that the patient receives the check. His signature on the claim means that the doctor agrees to abide by all the rules, of which there are more than 100,000 pages. These include coding requirements and price controls.
Russ got off easy. If a doctor gets overpaid, even through unintentional error, he may have to refund three times the amount, plus pay a civil monetary penalty. That used to be $10,000 per item, recently increased to $11,000, and in the new law to $50,000. Then there can be serious prison time.
As executive director of AAPS, I have met an office manager who spent one year in a county jail over the definition of—“office visit.” I have talked to doctors whose offices or homes were invaded by a SWAT team that pointed guns at patients or terrified children. One doctor’s home was ransacked by government agents searching for medical records in shoeboxes. Doctors have spent years in prison, with murderers, over disputes involving less than 1% of their billings. At least half a dozen have attempted or committed suicide after their lives were torn apart by “fraud” prosecutions.
This isn't really necessary, is it?
These were real doctors, who worked long hours caring for seriously sick patients. Their families are impoverished too—bank accounts, houses, cars, retirement accounts all seized. A few dollars from an “unnecessary” treatment could taint all assets and subject them to forfeiture.
Most doctors still think this only happens to “bad apples” (newspaper smears help give that impression). Still, many doctors, instead of studying about new treatments, are signing up for “compliance” courses to minimize the damages from bounty-hunting auditors.
When doctors begin to understand that much of the projected half-trillion dollars in Medicare “savings” is expected to come from assets accumulated by doctors over decades of hard toil, we are likely to see a mass exodus, especially of older doctors in solo practice, who seem to be the prime targets.
With fewer doctors, there will be less work done, and thus more savings.
Russ was just a plumber, and he got flushed.
What can doctors expect, now that they are public enemy #1
Jane M. Orient, MD, Executive Director of the Association of American Physicians and Surgeons, has been in solo practice of general internal medicine since 1981 and is a clinical lecturer in medicine at the University of Arizona College of Medicine. She received her undergraduate degrees in chemistry and mathematics from the University of Arizona, and her MD from Columbia University College of Physicians and Surgeons. She is the author of Sapira’s Art and Science of Bedside Diagnosis and YOUR Doctor Is Not In: Healthy Skepticism about National Health Care. She is the executive director of the Association of American Physicians and Surgeons, a voice for patients’ and physicians’ independence since 1943. Complete curriculum vitae posted at www.drjaneorient.com. Additional information on health-related issues: www.aapsonline.org and www.takebackmedicine.com.