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Medicare "Scare" Campaign

May 27, 1998

Are you being bombarded with scare tactics about your right to privately contract with doctors? You may be, if you are a Medicare beneficiary. Many seniors around the country are being flooded with conflicting information about their right to privately contract with physicians.

It's working this way: Conservative groups are telling seniors that due to the new Medicare law, Section 4507, they now have less medical freedom than their British counterparts do under socialized medicine.

Liberal groups, on the other hand, are countering that by saying that the conservatives, and some newspapers who repeat the line, are scaring seniors unnecessarily.

What's the Truth?

The truth is that Congress wrote an ambiguous Medicare law. And now they are leaving it up to the Health Care Financing Administration (HCFA) to interpret it.

When a conservative group or newspaper points out how Section 4507 could restrict seniors' freedom, HCFA comes along behind and interprets the law in a way that discredits their claim.

Case in point: The Heritage Foundation, a conservative think tank based in Washington, D.C., was the first public policy group to interpret Section 4507. The Foundation concluded that this section of the Medicare law could restrict seniors' choice of doctors.

Last November, Heritage Foundation's Bob Moffit published a policy paper for United Seniors Association. In it, he noted that "Under Section 4507 (3)(B)(ii), the physician who enters a private contract with a Medicare beneficiary must sign an affidavit that he will not submit any claim for `any item or service' provided to `any Medicare beneficiary' during a two-year period. Presumably, one would submit a claim to Medicare for a covered service only and would not submit a claim to Medicare for a non-covered service. But still the language itself is ambiguous," writes Moffit.

Still Not Clear

Not long after Moffit raised that concern, HCFA presented its interpretation of Section 4507. It sent a memo to insurance carries (private companies that process Medicare bills). In the memo, HCFA stated that Section 4507 applies only to Medicare-covered services. That means that seniors can continue to pay privately for services that Medicare does not cover. That seems clear enough.

But wait. Nancy-Ann de Parle, the head of HCFA, recently told Congress that "Medicare Part B rules do not apply to individuals or disabled persons who are eligible for Medicare, but not enrolled in Part B. Therefore, a private contract is not necessary for a physician to provide services to an individual who is Medicare-eligible, but who is not enrolled in Part B of the program," said de Parle.

Confusing Definition

Wait Again. The actual law passed by Congress states otherwise. In fact, Section 4507 could apply to nearly all seniors, because it defines a Medicare beneficiary as follows:

The term `Medicare beneficiary' means an individual who is entitled to benefits under Part A, or enrolled under Part B.

That means that, down the road HCFA could interpret Section 4507 to encompass nearly all seniors, since most are entitled to Medicare Part A.


Pete Hutchison of the Landmark Legal Foundation warns, "Bureaucrats excel at changing the rules in the middle of the game. "By manipulating the administrative rules, HCFA regulators can change the meaning and enforcement of Medicare regulations with little regard for congressional intent. It is an alarming practice that not only is dangerous for America's seniors, but also mocks the Constitution's delegation of legislative authority to the Congress," says Hutchison.

Pulling the Alarm

Conservative groups have pulled the Medicare freedom alarm, and with good cause. As a result of their public outcry, HCFA is now interpreting the new Medicare law in a manner that gives seniors as many choices as possible. That probably would not have happened without the conservatives' public outcry.

Let's hope the alarm continues to sound until Congress and the courts guarantee that seniors are free to choose and pay privately for their health care.

This article appeared in the May/June issue of Health Freedom Watch.