FACT SHEET #2 ~ Defining midwifery as a medicalized discipline is economically advantages to medical profession

by faithgibson on May 5, 2013

in AB1308, new regs & new legislative efforts, Physician Supervision Issues

Access to Affordable Maternity Care in California by
Professionally-licensed Midwives

The re-classification of the midwifery profession as a medicalized discipline in 1974 was economically advantages to medical profession, but detrimental to midwives, childbearing families and California taxpayers.

A problematic aspect of midwifery as a medicalized discipline is the economic effect on these non-physician practitioners and on public policy and taxpayer supported healthcare programs such as Medicaid/MediCal. MD-centric midwifery licensing laws created to a professional role between midwives and physicians formally described by the AMA as ‘physician-extenders’.

Under a labyrinth of counter-intuitive law, doctors are allowed to bill government programs and insurance companies at MD rates for services provided by any ‘physician extender’ practicing under his or her supervision.  This dubious billing practice allows physicians to charge for a doctor’s office visit, even when the patients is cared for by a nurse practitioner and is never seen by the doctor.

According to a Health Task Force report from the Medical Board of California (Draft version – Oct 05, 1993), this dubious but legal practice is entrenched and widespread. While the follow material doesn’t mention professionally-licensed midwives, both CNMs and LMs are included in category of “allied health care professionals”:

  • “…. Between 1980 and 1991, the population increased 26% while physicians increased 29%, chiropractors and Physician Assistants increased 171%. …
  • Although California experienced a dramatic increase in health care professionals, this has not solved or even alleviated the problem of the underserved areas.
  • ….the hiring of additional allied health care professionals has not really done anything to benefit patients.
  • …the manner in which they are being hired and used now, they are really only serving to increase the income of physicians.
  • Although physicians are hiring more Physician Assistants and Nurse Practitioners, and often patients never see the physician, the patients are charged the same amount for an office visit.
  • This is income for the physician but there is no cost saving to the patient.”

This is a direct violation of the North American Free Trade Agreement and specific instructions from the California Department of Consumer Affairs. A memorandum to all its bureau chiefs refers to a request by the Governor’s Trade Representative and asks that each state agency prepare a plan to implement the NAFTA. The memorandum, dated 09/04/92, notes that the “anti-competitive” impact of NAFTA specifically disallows:

  • “any licensing or certification statues, regulations or procedures which are not based on objective and transparent criteria, competence, and the ability to provide the services or which are more burdensome than necessary to assure quality of the services”.

NAFTA’s objective is to prevent licensing requirements from being “unnecessary barriers to trade” and that any state licensing requirement:

  • “… not constitute a disguised restriction of the provision of services ….. Requirements should be based on competence”.

These views were reiterated in a letter from the Federation of State Medical Boards by Dorothy Harwood, (01-11-94) who noted that:

  • State medical board licensing standards are not pre-empted”.

Thus far, the medical profession has not been required to abide by the “objective and transparent” licensing criteria required by NAFTA.  As recently as October 2012, a popular website for physicians — Medscape  ~ posted an article called: “Ways to pump up your bottom-line”. Ideas included information about the supervision of physician-extender practitioners, third-party reimbursement policies and various other tips for increasing one’s medical business.

A proven strategy for ‘pumping up’ the profitability of a physician’s medical office was to take advantage of a legal situation engineered decades ago by organized medicine. The ‘physician-extenders’ classification impacts many states, including California, and means that it is illegal to practice independently (i.e. not under medical supervision).

Since these nurse-midwives are prevented from practicing independently, a hospital-based birth practice would seem to be the next best choice. However that also can’t be done without a physician ‘sponsor’. This is a particular category of medical supervision relative to hospital privileges, which are not independently available to midwives. In the last decade almost all of the largest, busiest, most long-running and most highly respected nurse-midwifery services in the US (including Stanford) were shut down by their hospital’s obstetrical department.

In some cases, local obstetricians were vocal about ‘not liking the competition’. In others, hospital administrators claimed midwifery services didn’t generate enough ‘billable units’ and thus were not profitable. Bases on the severely restrictive nature of these laws, the only viable choice left for a CNM is to become a physician-extender.  One not-so-surprising consequence is a precipitous drop in the annual number of nurse-midwifery students, which went from an average of 500 to merely 200 last year.

However, MD-friendly economic policies are still very much to the advantage of the medial profession, which is lawfully permitted and encouraged to exploit their ‘mid-levels’ as a profit center for their medical offices.

The Medscape article notes that: “mid-levels are paid less than physicians”. Then the article goes on to say that services provided by mid-levels who are “under direct supervision by a physician, mid-levels command the reimbursement as physicians”.

As the MBC’s October 1993 Health Taskforce Report makes clear, the ‘commanded’ Medicare reimbursement is not income for the nurse practitioners or professional midwives who work in the doctor’s office, but instead is additional revenue for the physician.

Here is an excerpt from Medscape’s primer on how doctors can pump up their bottom line by exploiting MD-friendly economic policies. These laws specifically allow physicians to benefit financially by exploiting the category of  “physician-extenders” — nurse practitioners, professional midwives and physician assistants:

“With more covered patients seeking doctors and the threat of declining reimbursements in the long term [under the new Affordable Care Act of 2009], doctors are under pressure to see more patients.

Hiring mid-level providers, mainly nurse practitioners and physician assistants, is a good way …

And because mid-levels are paid less than physicians, they can spend more time with patients. They can deal with less complex cases and give patients unhurried, personal attention…

When they are under direct supervision by a physician, mid-levels command the same Medicare reimbursement as physicians.

Bringing a new midlevel into the practice should be coordinated with a marketing campaign that bumps up the number of patients in the practice…” [ref: Medscape Oct 25, 2012 – advice MDs on “How to Pump up your bottom line” by hiring more ‘mid-levels’ to increase revenue.]

The idea of physicians profiting from the services another healthcare profession is a double standard as judged by the medical profession’s own tradition. The AMA considers it “unethical” for any non-physician to make a profit on the services of a physician.

In 1934, during one of the worst years of the Great Depression, the AMA’s Judicial Council amended their Principles of Ethics by making it:

 ‘unethical for any physician to dispose of his services to any lay body, organization, group or individual under conditions that would permit the lay body, organization, group or individual to receive a profit on the doctor’s services [from the AMA’s Web site Timeline data for 1934]

Obviously, the AMA’s ethics of non-exploitation only apply to physicians and not to those healthcare professional that they label “physician-extenders”.

They totally ignore this definition of  ‘ethical’ practice when it comes to non-physician practitioners, as documented by the Resolution recently passed by the House of Delegates, which is the AMA’s ruling body:

H-35.993 Opposition to Direct Medicare Payments for Physician Extenders

Our AMA reaffirms its opposition to any legislation or program which would provide for Medicare payments directly to physician extenders, or payment for physician extender services not provided under the supervision and direction of a physician. (CMS Rep. N, I-77; Reaffirmed: CLRPD Rep. C, A-89; Reaffirmed: Sunset Report, A-00)

H-35.988 Independent Practice of Medicine by “Nurse Practitioners”

The AMA, in the public interest, opposes enactment of legislation to authorize the independent practice of medicine by any individual who has not completed the state’s requirements for licensure to engage in the practice of medicine and surgery in all of its branches. (Sub. Res. 53, I-82; Reaffirmed: A-84; Reaffirmed: CLRPD Rep. A, I-92; Reaffirmed: BOT Rep. 28, A-03)

California College of Midwives
Contact: faithgibson@mac.com

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