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You Are Here: Home > Online Library > Articles > Life & Health > Article
Welcome to Section 4507
The Wall Street Journal, January 5, 1998

Confusion will reign today in doctors' offices throughout the land, with the implementation of Section 4507 of the Medicare law, forbidding doctors from accepting payment from anyone over 65 without permission from Washington. Some seniors, championed by highly successful attorney Kent Masterson Brown, have already filed suit to overturn the new law.

The right of seniors to buy the medical service they want has never been a settled issue. In Mr. Brown’s 1992 case Stewart v. Sullivan, federal Judge Nicholas Politan found there was no law or even a clearly articulated policy against private contracts between seniors and doctors. But that didn’t prevent both the Bush and Clinton Administrations from using coercion to discourage it. The Health Care Financing Administration threatened fines of up to $2,000 a claim against doctors who didn’t submit bills for all their elderly patients to Medicare.

The regulations worked, persuading the medial profession it was against the law to take money from patients over 65. For example, afterMary Ann Howard of Prescott, Ariz., turned 65 last year, she contacted a Prescott physician for specialized diabetic care, but was told he wasn’t taking any new Medicare patients. She offered to pay cash, but was told the doctor would be charged with Medicare fraud if he accepted any money outside of federal Medicare reimbursement.

Mrs. Howard was forced for a time to travel more than two hours each way to Phoenix to get treatment. Her husband, Bill, wrote an outraged letter to GOP Senator Jon Kyl. "If a person is willing to pay their own bill, why in the world, how in the world could they accuse that doctor of Medicare fraud?" Senator Kyl agreed, sponsored legislation explicitly allowing Medicare patients to contract with doctors at rates above the program’s mandated fees and won overwhelming Senate approval.

Enter the Clinton Administration, which threatened to veto the entire balanced budget deal if the Kyl language was included. The Administration professed to fear a "two-tiered" health care system; in fact, it saw that giving patients a right to choose threatened the piece-by-piece effort to revive the "Clinton-care" plan so resoundingly defeated during the President’s first term. But to preserve their budget deal, Republicans caved in and agreed to compromise language in Section 4507.

The section requires that any doctors who treat a senior citizen privately must file an affidavit swearing they will see no Medicare patients for two years. GOP Rep. Bill Thomas, chairman of the Ways and Means health subcommittee, argues that "we had to compromise on provisions like these in order to make progress in other areas." But in fact, the Congressional Budget office, noting that only 4% of physicians get by without any Medicare patients, expects that under the new law "direct contracting will almost never be used."

Under the law just taking effect, indeed, America’s seniors will be coerced into joining Part B of Medicare – a supposedly optional plan that pays for doctor visits. The new rules will effectively prevent beneficiaries from contracting with the doctors to purchase any of those 7,000 procedures for which Part B establishes fixed rates. If you feel you need a test – a CAT brain scan, for example – you will not be able to have it at your own expense, only if you have symptoms that qualify for Medicare reimbursement.

"On the day before your 65th birthday you can choose your own health care, on your 65th birthday and after, Section 4507 means the government chooses it for you," says GOP Senate aide Jade West. Senator Kyl is mortified by how Congress mangled his idea. Along with House Ways and Means Chairman Bill Archer he has a repeal bill that uses the same language that allows British patients full freedom to pay for private treatment from any National Health Service doctor. The bill has 47 co-sponsors in the Senate and 170 in the House.

Mr. Brown, who also tore open the secrecy surrounding Hillary Clinton’s health care task force with the 1993 suit in which Judge Royce Lamberth ordered the government to pay $286,000 for misconduct, is not waiting for legislative relief. On behalf of four Medicare patients, he filed suit last week asserting that the Constitution, the 9th and 14th Amendments for example, gives citizens "a liberty interest in their life, self and health," and that the federal government has no right to prevent seniors from using their own money to pay for services they and their doctors consider prudent and necessary, whether that be additional service, extra tests, more timely attention or privacy protections.

Section 4507 makes clear that seniors are being locked into a government-run system of one price and one choice for anything Medicare covers, even if they want to use their own money to buy privacy, convenience or more expert care. This is what the nation decided against in the battle over Clinton Care, and the current confusion serves a purpose in pointing to the need for judicial or legislative clarification.