Now we must move forward. We have stood up to the oppression of our out of control federal bureaucracy, and we have sent them a message. We will be watching, and will not hesitate to take appropriate steps, when in the future, governmental agencies violate the law in their dealings with our patients and/or physicians. We can be satisfied that we were in the battle. Where was the rest of organized medicine?
March 3, 1997
by Chester C. Danehower, MD
Members Invited to Attend Hearing. . .
Oral argument in this case will be heard in the United States
Court of Appeals for the District of Columbia on April 14, 1997 at 9:30 am. Any
ASD Member who is interested in being present at the hearing is invited to attend. Please call
the ASD Office at (309/676-4074) for details.
Recently I discovered a particularly disturbing article in
the November, 1996 issue of the PHYSICIAN’S MEDICARE GUIDE NEWSLETTER.
The headlines proclaim boldly “AMA’S Involvement in Fee Schedule
Updates Permissible”. This article states that ASD v. Shalala was
rejected by the U.S. District Court for the District of Columbia
which is true. The final paragraph reads as follows: “The court
ruled that the fee schedule law prohibits judicial review of fee
schedule codes and values. The court also said that the Health
Care Financing Administration (HCFA) was not improperly using the
AMA committees because it relied on them merely for advice and did
not control their activities.”
It strikes me as very strange how the truth can be told and
yet how it is still not the truth. For example, it appears
from this article that the case has been completed, and that
no further legal action is to occur. Well, for those of you
who do not already know, oral argument in this case will be heard
in the United States Court of Appeals for the District of Columbia
on April 14, 1997 at 9:30 a.m. The suit is alive and well, and quite
frankly the ASD has an excellent chance of winning!
Furthermore, the first sentence of the above mentioned
paragraph which states that judicial review of fee schedule codes
and values is not permitted raises a serious constitutional issue;
that is the separation of powers within our government. The article
tells the truth, but does not mention that Congress has no right
under current law to make a law that prohibits judicial review.
An action of this nature sets a very dangerous precedent, and is not
acceptable in a free society!
Finally, the last sentence in the quoted paragraph states
that the committees were used merely for advice. I must be missing
something, because I thought that is what the word advisory means
in the Federal Advisory Committee Act (FACA). For the purpose of
the FACA, the Current Procedural Terminology (CPT) editorial
committee, the CPT editorial advisory committee, the Relative
Value Update Committee (RUC), the RUC Advisory Committee, and
the physician’s multi-specialty committee all give every indication
of being FACA advisory committees, and therefore must be open to
the public. From ASD's standpoint these AMA advisory committees
to Health and Human Services (HHS) are acting in violation of
For those of you who think that this lawsuit is not
important, I would like for you to consider the recent
action in Florida by its Medicare carrier. As I am sure
you are aware, this carrier has attempted to interfere in the
doctor-patient relationship by directing how actinic keratoses
will be treated. To the credit of both the Florida dermatologists
and the American Academy of Dermatology (AAD), a lawsuit has been
filed for relief in this matter. As important as this latter
lawsuit is, its importance pales in comparison to the ASD lawsuit,
because it only deals with a single issue. The ASD lawsuit goes to
the heart and soul of the problem; the Resource Based Relative
Value System (RBRVS) and CPT coding. Perhaps if we had received
support from the AAD in ASD v. Shalala, the actinic keratosis debacle
may have never occurred. We need to find ways to work together
instead of pulling against one another.
If you would like to make a contribution to the FACA fund,
please curse to the bottom of this page for mailing details.
ASD challenges HHS failure
to follow procedures in
The American Society of Dermatology headquartered in Peoria, Illinois, and
two physician members, Melissa Kline Clements, MD, of Oklahoma City, Oklahoma,
and John A. Kasch, MD, of Sacramento, California, filed a complaint in the
United States District Court in Washington, D.C., against Secretary of Health
and Human Services Donna Shalala, challenging the development and
administration of the Medicare physician fee schedule and its annual
updates and revisions annually through the use of five unchartered, unregulated,
and secret advisory committees and panels.
The lawsuit alleges that the Secretary has failed to comply with the Federal
Advisory Committee Act ("FACA"), the Government in the Sunshine Act, the
Freedom of information Act ("FOIA"), and the Administrative Procedure Act
("APA"), while promulgating the physician fee schedule.
The Plaintiff dermatologists charge that the Secretary has utilized the American Medical Association and certain "AMA-recognized" medical specialty societies, all representatives chosen from the AMA House of Delegates, none of whom are employees of the Federal government, as a "preferred source of advice and recommendations" as described in FACA. Any meetings held with the purpose of providing
such advice and recommendations to the Secretary are subject to the FACA and other
sunshine laws, including the requirement to provide public notice of meetings,
conduct meetings open to the public, provide minutes of the meetings, and to
file charters with the Library of Congress annually, noting, among other facts,
the identities of those advising the federal of ficials and agencies, and the
amount of taxpayer funds used by the advisors in holding the meetings.
Congress charged the Secretary with developing a physician fee schedule
under Part B of Medicare in 1989, in amendments to the Medicare Act that
were a radical overhaul of the former charge-based method under which
physician reimbursement for providing services to Medicare beneficiaries
had previously been determined. Congress required, instead, that
physician fees be calculated in accordance with a relative value
scale to be established by the Secretary.
In establishing the relative value of all physician services covered by Medicare, the Secretary was authorized by Congress to
"take into account the recommendations of the Physician Payment Review Commission," a
federal advisory commission established under the Federal
Advisory Committee Act, and the recommendations of "organizations representing physicians."
The Plaintiffs have learned that AMA representatives on at least three (3) committees and panels - known as the "AMA/Specialty Society Relative Value Update Committee," the "AMA/ Specialty Society Relative Value Update Advisory Committee," and the "HCFA Multispecialty Physicians Panels" - have met several times each year since 1989 with HHS officials and representatives of the insurers under contract
with HCFA to reimburse physician Medicare services, after the notice and comment
period had expired under the Administrative Procedure Act ("APA"),
and that, among themselves, these individuals have determined the rates of
Medicare reimbursement in a completely closed process that excludes all public scrutiny.
These "preferred sources" and HHS officials have failed to follow
procedures under FACA, and have violated the sunshine laws. Immediate
Past President of the American Society of Dermatology, Dr. Chester Danehower, has expressed concern that "the secret process between AMA officials and government, including the Medicare carriers, should be open to the public so that we can determine on what basis these rates are determined." The secret process has resulted in a windfall to the AMA - the outcome these Federal Laws aim to prevent.
In addition, Congress, in the 1989 amendment, required the Secretary to
establish a uniform procedure for coding all physician services. The Secretary,
under an agreement with the - AMA, instead, - adopted
wholesale the AMA's preexisting "Current Procedure
Terminology" ("CPT") codes, material on which the AMA holds a copyright.
AMA officials have met several
times each year since 1989 with the Secretary and other federal Health
and Human Services officials, members of medical specialty societies,
and American Hospital Association officials, among others, to update,
revise, and add CPT codes to the list of covered physician services.
None of the members of what are known as the "CPT Editorial Panel"
and the "CPT Advisory Committee" are federal officials, and only one
federal official attends the "CPT Editorial Committee." And yet, these
committees are charged with developing the CPT codes used by the
Secretary as a comprehensive description of physician
services. Members of the American Society of Dermatology and
others have been excluded from providing input on the CPT codes
relating to dermatology services. The Plaintiffs charge that the
CPT committees of the AMA are unequivocally "preferred sources of
advice and recommendations" in establishing the federally-required coding system.
The AMA publishes an estimated 800,000 copies of the annually
revised edition of the CPT, containing information required by law
to be used by all physicians, hospitals, and others who and which
make claims for reimbursement for Medicare physician services. As
such, all must purchase each year the revised edition of CPT codes
from the AMA, creating a windfall for the AMA.
Plaintiffs have requested the federal court to permanently enjoin
any futther meetings of any of the committees and panels which meet for
the purpose of providing advice and recommendations under the Medicare
physician fee schedule; to enjoin the use of any recommendations heretofore
made by those committees and panels; and to issue a declaratory judgment that
all such committees and panels be declared FACA committees, and that the
Secretary comply with the tenrts of all applicable laws, providing thereby
to the Plaintiffs any required documents in existence since 1991.
Support is Needed
A fund has been established at Charter National Bank, Oklahoma City, Oklahoma
for the exclusive purpose of supporting the American Society of Dermatology,
et al vs. Shalala, etc. This fund is audited independently from the American
Society of Dermatology.
Through the lawsuit, the American Society of Dermatology seeks to
open and make public the proceedings of all committees and panels established by FACA for the purpose of establishing CPT codes and the Medicare reimbursement schedule.
Anyone wishing to contribute to the fund may do so by sending a
FACA Legal Fund
c/o Melissa Kline Clements, MD
608 NW 9th Street, #6200
Oklahoma City, OK 73102
Your support is greatly appreciated!
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