01/14/2015    Lawrence M. Rubin, DPM

Insurance Companies are Ruining Medicine (Richard Rees, DPM)

Regarding Dr. Rees’ statement that Medicare was
the worst paying insurance in the early days, like
Dr. Weil, Sr., I was there too. (He sure was one
of my best students of x-ray interpretation in the
classrooms and clinics at the Illinois College of
Podiatric Medicine!) Please take a walk with me
into that past.

At that time, Medicare paid on what it called, the
"Reasonable Charge" basis. This name was later
changed to "Usual and Customary." All physician
charges for every CPT (HCPCS) code in every
geographic Medicare locale were tabulated, and
Medicare based its maximum allowances at 80% of
the 75th percentile of charges minus the
deductible. This amount was called the
"Reasonable Charge." Most non-Medicare insurance
(or at least most Blue Shield plans) paid at the
90th percentile, resulting in 15% higher
allowances than Medicare.

Of course, doctors and other Medicare providers
soon learned that the more they charged a company
that based payment on Usual and Customary charges,
the more they would be paid in the future. That
was the impetus for rapid escalation of health
care charges which had remained pretty constant in
the past.

Some other non-Medicare insurance companies had a
set dollar amount payment for each service
("Indemnity Plans"), and that amount varied from
one insurance plan to another. But the fact is
that before Medicare came about, many insurance
companies would not pay anything at all to a
podiatrist. We mostly had to survive and thrive on
cash payments, and in those days, we learned how
to accomplish that successfully.

In the 50's and early 60's, podiatry health
insurance exclusion was the rule rather than the
exception. When Medicare was launched, though,
insurance companies got into the business of
selling Medicare supplements to cover the
deductibles and 20% of the Usual and Customary
allowance not paid by Medicare. To do that, these
insurance companies had to cover podiatry because
Medicare covered podiatry. And, because of that
obligation and non-discrimination actions in many
states, virtually all insurance companies rapidly
began to pay podiatric claims.

I want to add that those of us around at that time
had nothing but gratitude for a Washington, DC
podiatrist, "Charlie" Turchin, whose patient was
Vice-President Lyndon Johnson. Podiatry was left
out of the original draft of the Medicare Law, but
Charlie contacted the Vice-President and convinced
him that our skills and services, particularly for
diabetics, should not be left out. I have always
wondered, if not for Charlie Turchin contacting
Lyndon Johnson, and if not for Medicare, where
would podiatry be today?

Lawrence M. Rubin, DPM, Las Vegas, NV

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