Medical charity illegal, insane U.S. government agency says

"Thou shall not commit charity." So decrees the federal government, under the 1996 HIPAA and other laws and regulations. In Western Civilization, ethical requirement for personal fulfillment once included charity and charitable action. How did this ethic get turned on its head?

Once again, incompletely-considered intentions have gone awry. And this particular awryness goes back at least 40 years, when the federal government got into the business of paying for medical care big time, with the Medicare and Medicaid programs. In addition to politicians garnering political points, votes and political campaign contributions, another intention was to help older Americans get medical and hospital coverage. These government officials have been worried that doctors might inflate charges for patients covered by Medicare. So, the bureaucrats and Congress made rules limiting what doctors could charge for services rendered to Medicare recipients. Government bureaucrats allowed the small fries (such as doctors and hospitals) to collect only their lowest price for goods and services.

From the beginning, doctors had trouble keeping up with government regulations and filling out the claim forms. This paperwork is like having to fill out an individual income tax return to the IRS for every patient. The doctor is responsible for coming up with politically-correct patient information, code numbers, modifiers and other minutiae lest he be convicted of insurance fraud and sent to jail for five years. Oh, I almost forgot to mention, the degree of fraud has to be significant, defined as at least $100, under the 1996 HIPAA Law.

In the late 1960s, Dr. James Baker of Aberdeen WA charged $8.00 for a standard office consultation. But when a patient on blood pressure medicine came in to have blood pressure checked, Dr. Baker couldn't justify charging the full $8.00 so he charged a more charitable $4.00 instead. Because the government had to get the best price, the Medicare bureaucrats informed the doctor that as far as the Medicare program was concerned his fee for his standard office consultation was actually $4.00, not $8. So, the government would pay him or reimburse patients the usual 80 percent, or $3.20.

Oh, yes, and he better try really hard to collect that other 80 cents or the government would conclude that his usual fee was actually only $3.20, and the government would pay 80 percent of that, or $2.56; the formula spirals downward from there. So, if a doctor charitably charged less to poor patients, the government paid the doctor no more than the fee paid by these charity patients. Some doctors became charity cases themselves. Of course, there could be exceptions, if you knew your way through the Magic Code Book and kept bureaucratic-style records meeting the bureaucratic requirements du jour. If some doctor or hospital was rash enough to treat charity patients for free, the government would conclude that was the usual fee and pay nothing for services rendered to government patients.

Indeed, this seems to be the approach to several charity hospitals that had the gall to continue their charitable mission. They get into trouble when they only give charity to human beings and not to Medicare apparatchiks. This is exactly happened to the 161 bed Deborah Hospital in New Jersey. The hospital never charges patients for medical services. But the hospital did collect from Medicare when patients had Medicare coverage.

As medical lawyer Madeline P. Cosman, Ph.D., writes "the U.S. Department of Health and Human Services prosecuted Deborah over the course of four years because Deborah accepts Medicare payments without requiring patient copayments and therefore violates a slew of civil and criminal laws. "By following its own three-quarter-century-old mandate to never charge patients, Deborah Hospital was accused of granting incentives for referrals, submitting false claims to the government, unfairly competing with community and other specialty hospitals, and generally flouting White Coat Crime laws ... Medicare has no obligation to pay for hospital care that the patient gets as a free gift."

The "false claims" charge alone carries a $10,000 fine, per incident, plus triple damages. Each patient charge can be prosecuted as a separate false claim. "Deborah's refusal to violate its free care mandate that defies medical law nearly forced the generous doors and charity operating rooms to close shut. In 2003, Deborah Hospital finally got a reprieve, a waiver enabling them to continue their tradition of not charging copayments" writes Cosman.

Deborah Hospital was presumed guilty, until proven innocent or granted a waiver from the boss. So, in order to keep government prosecutors at bay, doctors and hospitals who have contracts with Medicare or private insurance companies are essentially forced to charge their highest fees so that the government can't accuse them of cheating. These fees are like the "rack rate" room charges posted in hotel rooms. In our experience, these posted hotel charges are always a lot higher than what you actually pay and are apparently posted because of some "consumer protection" regulation. Just as individuals, travel agents and businesses negotiate lower rates for hotel rooms, insurance companies and individuals negotiate lower rates for hospital rooms, at least with some hospitals.

At least this bureaucratic inversion of charity is now coming to public attention. The Robert Wood Johnson Foundation paid for a study of 6,600 physicians that found that 68 percent of doctors now say they deliver any free or discounted assistance to low-income patients. This is down from 76 percent a mere 10 years earlier according to Donald Devine, former director of the Federal Employees Health Benefits and Civil Service Retirement programs in an article published in the Washington Times two days after April Fools Day.

It took a study to find out what doctors have been experiencing for several decades. Although Devine "had managed the largest employer health insurance plan in the nation and written often on health matters" this problem had escaped his notice, he writes. "When one reads about doctors being hauled off to jail for fraud, odds are this is the cause: Guilty not of fraud but of charity."

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More on Queensland's crooked health bureaucrats

But the government is still lying

The State Government has released the names of three senior bureaucrats suspended in the wake of the latest Queensland Health bungle. The three are being investigated by the Crime and Misconduct Commission for their role in the appointment of a nurse with false qualifications and subsequent disciplining of a doctor who complained. The three were identified as Prince Charles Hospital acting district manager Michael Cleary, Statewide Health Services executive director Linda Dawson and Gloria Wallace, general manager of Central Health Area Services.

A spokesman for Health Minister Stephen Robertson said Ms Wallace was flying back from a private trip to Britain. The Government strenuously denied she was part of the British recruitment team headed by Premier Peter Beattie. But sources told The Sunday Mail Ms Wallace had been in Britain in an official capacity.

It has been revealed Health officials were warned more than a year ago about the threat of a Jayant Patel-like situation after the nurse's appointment. A confidential email that expressed concern about the risk to patient safety was ignored.

The State Government this week was forced to apologise to Dr Chris Davis, head of rehabilitation and aged care at Brisbane's Prince Charles Hospital, after he was ignored, then disciplined, for raising concerns about the nurse. Dr Davis sent an email to two senior health officials in April last year dealing with the performance of new nursing manager Virginia Hancl. He had spoken to Ms Hancl's former manager, who was surprised she had been appointed without any reference checks. Queensland Health had only called her boyfriend, listed as a referee. Dr Davis warned that trying to manage someone who should not have been appointed was like "trying to improve the performance of Dr Patel".

Opposition health spokesman Bruce Flegg slammed Queensland Health for the cover-up. "These revelations make a mockery of the Government's claims things are getting better," he said.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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