Her job is to assure that doctors and nurses do not commit random acts of kindness. Her effectiveness is confirmed by a massive new Robert Wood Johnson Foundation funded study of 6,600 physicians that found only 68 percent of doctors now say they deliver any free or discounted assistance to low-income patients, down from 76 percent a mere ten years earlier.

Has raw capitalism crushed medical compassion? The liberal foundation and its Center for Studying Health System Change presumed so but were at a loss explaining the decline—citing tight schedules and medical school debt, as if these were new phenomena that could explain the change. They came closer to the cause in pointing to lower physician reimbursements but they only mentioned private insurers, altogether blind to the main culprit.

Admittedly, the cause was not obvious. It was a case of the student teaching the professor. Although he had managed the largest employer health insurance plan in the nation and written often on health matters, this medical neglect had escaped the professor’s notice. The student had informed him she worked for a medical practice and was hired to keep the firm’s health professionals from defrauding the government.

It seems that Medicare and Medicaid consider it fraud if a physician charges any patient less than the government must pay for a medical service. If a doctor feels compassion for some poor soul and offers a discount, he must grant that “discount” for every billing for every patient in the government programs. If he forgives one indigent from paying at all, the government never has to pay for any such procedure. The only reason the study shows so much charitable activity is that the physicians counted extra time spent at hospitals treating indigents as charity, which it really is not since treatment is requited by law.

She wrote: “I am employed as a Coding and Compliance Manager. Along with supervising nine people, I perform audits on the physicians billing, credentialing, coding, collections, and directly supervise charge entry, posting payments, pre-certifications and referrals. Many people think that physicians only have to treat patients. Because the government has such control over healthcare they need to hire people who specialize in keeping their practice running according to the government standards and expectations. The government tells us how we are to handle collecting personal payments from patients. For something that sounds so small, their morals and values and mine are questioned daily.

“God help us if we inadvertently write off charges or perform services that Medicare doesn’t see medically necessary and bill the patient without an advance beneficiary notice (ABN) signed. The average citizen does not understand basic health insurance let alone all the rules and regulations surrounding it. So for them it is hard to understand why we cannot just write off their balance. They think physicians are money hungry. There are so many rules and regulations that are constantly changing there is really no way to keep up. Once you think you have it down something somewhere changes or is in the process of changing. I fear government in these instances. If I were to ever be audited and missed something somewhere my physicians would be at risk of huge fines and even jail. I then would be out of a job no questions asked. I do not believe that we have much control over our government as we are sometimes led to believe.”

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. If a health provider bills for either government program, it is subject to a Federal audit. Every patient’s record, whether Medicaid or Medicare or not, is scrutinized to assure that no non-government patient pays less than the government is charged. If the health provider gives anyone an undocumented break this is considered “fraud” and it is off to jail for the foolish Mother Theresa.

How did the national government become the Grinch of last resort? To its immense surprise it has found that if one gives valuable things away for free, people will use more of it. As a result, Medicare has an unfunded liability of $30 trillion that dwarfs Social Security’s and will bankrupt the national government by its lonesome, while the joint Federal-local Medicaid will bring down the state governments too. Of course, it is too politically risky for most politicians to truly reform these popular programs to solve the coming fiscal crisis because they are convinced voters will turn against anyone foolish enough to cut one dollar from one government patron. So, the easy solution is to turn on the “rich” doctors.

First, the government set an arbitrary payment scale to reimburse physicians regardless of the market or even local costs. This “saves’ a lot of money and takes it from doctors who can supposedly afford it. However, the government cannot force them to accept patients (although the government tries) and the quality of service declines. The favorite remedy is to increase the number of office visits, wasting both patient time and taxpayer money. All patients receive worse care because the government is being helpful. Second, the “no one pays less than the government” rule guarantees that no one will receive a break on their private bills. Although a physician can apply for an exception to forgive payments for indigent cases, no rational person will complete the burdensome red tape much less take the chance the government would question it in an audit.

When a politician is willing to stand up for real health care reform that is big news and deserves recognition. Gov. Mark Sanford of South Carolina is leading a small revolution to reform Medicaid through federal waivers to allow him to turn the program from one-size-fits-all inflexible entitlement to a client choice between managed care, home health networks, employer plans and self directed accounts. Enrollees would be given a fixed amount to direct to any of these choices and they could keep the difference if funds were left at the end of the year for future medical expenses, giving them a monetary incentive to save medical costs that will result in lower government spending.

The decline in charity by physicians documented in the study is guaranteed to get worse. It shows that most charity is performed by doctors working in small practices. Large practices already hire people like the student to assure they commit no charity. As the smaller practices become aware of the government practices, they will perform fewer charitable acts.

The world’s best health system is being destroyed by government bureaucracy, to say nothing about the unique American attribute of private and local charity that has so amazed the world since the French observer Alexis de Tocqueville described it so vividly in the early 19th Century. It will take political courage of the highest order to reverse these trends and those who recognize the problem must support the revolutionaries like Gov. Sanford before it is too late.

Donald Devine, the Editor, is a professor of political science at Bellevue University and was director of the Federal Employees Health Benefits and Civil Service Retirement programs during President Ronald Reagan’s first term.

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