Medicine’s Cash Cow



Medicine’s Ironic Cash Cow


JC Smith

As federal officials begin to implement the “affordable” aspect of the Affordable Care Act, the medical profession’s abuse of Medicare is finally becoming more transparent despite a continued effort by the AMA to squelch this information for the last 35 years to keep the public from knowing how expensive the Medicare system has become to taxpayers as well as enriching to their doctors.

The Center for Medicare Services recently released data of Medicare expenses for the year 2012 after a court order lifted an injunction sought by CMS that had been in place since 1979 in behalf of the American Medical Association.

Considering Medicare is a huge public program paid by taxpayers, the fact that the AMA was successful to deny previous attempts to reveal the payments of this program is shocking, but typical of the medical cartel’s power on Capitol Hill and another obvious example why the AMA was aptly dubbed “…the most terrifying trade association on earth.”[1]

It is now clear why the AMA tried to censor this information when the monies were recently revealed. The data show in 2012 there were more than 880,000 providers, $252.4 billion in charges, and $77.4 billion in payments. The average reimbursement for the year was $87,883. More than 2,000 of those medical providers broke $2 million in Medicare receipts.[2]

The statistics reveal that seven doctors received more than $10 million in payments, and that three Florida ophthalmologists each billed at least $22 million. The doctor with the highest reimbursement total is also enmeshed in a criminal inquiry involving a U.S. senator.[3]

The top 10 doctors alone received a combined $121.4 million for Medicare Part B payments in 2012. Many of the doctors said they were just passing the payment through to drug companies and others said they were unfairly singled out when they were billing for an entire practice.[4]

You can find out what any doctor was paid by this link: How Much Medicare Pays For Your Doctor’s Care. If your doctor participates in Medicare, just submit the name, specialty, zip code, and then prepare to be shocked.

This move is the first in a series of several initiatives by Obamacare and CMS to increase transparency in the shadowy world of medical expenses as Steven Brill revealed in his TIME cover article, BITTER PILL: WHY MEDICAL BILLS ARE KILLING US (March 4, 2013). Despite coverage for the 7.5 million Americans who bought Obamacare, the high costs still prevail because the medical monopoly was not broken up as Brill suggests.

Despite the clamor over Obamacare registration problems, these steps to increase transparency will have a huge impact upon health consumers and payers alike. This fall the agency plans to launch a Website where it will post payments and gifts that physicians receive from drug and device makers. CMS also plans to expand its Physician Compare Website this year to include quality-of-care information for clinicians in group practices.[5]

This transparency appears to be another rung on the ladder of opportunity for chiropractors if we are able to promote our clinical and cost-effectiveness to the payers, press, and public in comparison with medical spine care.

Who’s Overvalued & Undervalued?

The recent 2012 data include repayment rates for various specialties based on how much “work” is included: If it’s a surgery, are there technicians involved? Does a specialist do more “work” than a nurse practitioner? Does a speech pathologist require the same technology as a radiologist? Does a physician assistant require the same training as a cardiologist? [6]

Debra Ness, president of the National Partnership for Women and Families, sees the data as good news for consumers. “I think this is very exciting and it has been a long time coming as part of a much larger cultural change in health care.”

“The light of transparency helps everyone become more accountable and more conscious of what they’re doing,” Ness said. “I think there are a lot of times people think they’re doing the right thing, but until they step back and see the data and compare to others, they may not realize they are consistent with best practices or their peers.”[7]

In spine care, her comment is an understatement considering a leading spine journalist, Mark Schoene, recently opined, “Medical spine care is the poster child for inefficient care.” He also admits, “such an important area of medicine has fallen to this level of dysfunction should be a national scandal.”[8]

The cost of this national scandal was revealed by CMS. The following sampling compares the various spine care and ancillary providers:

Provider type


Average Services per patient

Average pay

Percentage Charges Covered

Osteopathic Manipulative Medicine





Pain Management










Orthopedic Surgery










Physical Therapist





Physical Medicine and Rehabilitation





Preventive Medicine





Sports Medicine





Undoubtedly this comparison reveals the inequities in spine care services and payments. Of course, what jumps out to chiropractors are two things: 1) we are the lowest in average pay and 2) we are the highest in percentage of charges covered.

Certainly we are the lowest paid because we are handcuffed by the original Medicare law to treat only acute conditions with only “manipulative therapy” (98940, 98941, 98942). Medicare will not pay chiropractors for chronic, palliative or preventative care, exams, or for modalities.

Considering chronic LBP is a huge national burden, this regulation seems most unfair to patients and DCs in particular. Is it any wonder why patients turn to addictive opioids, ineffective ESIs, short-term PT, and unnecessary spine surgery when Medicare covers these procedures but not chiropractic care?

For example, one federal BC/BS program only covers 12 visits to a DC, but 75 visits for physical therapy. Indeed, we are the best buy in town due to these limitations!

We also contribute to keep other Medicare medical costs lower as shown by one study by the well-known Washington, DC-based firm, Muse & Associates.

This study showed that chiropractic care reduced Medicare costs. Medicare beneficiaries who had chiropractic care had an average Medicare payment of $4,426 for all Medicare services. Those who had other types of care had an average of $8,103 Medicare payment for all Medicare services.[9]

Another Congressionally-mandated pilot project conducted from April, 2005, to March, 2007, testing the feasibility of expanding chiropractic services in the Medicare program, patients gave a high rate of satisfaction with the care they received from doctors of chiropractic. When asked to rate their satisfaction on a 10-point scale, 87 percent of patients in the study gave their chiropractor a level of 8 or higher, and 56 percent of those patients rated their chiropractor with a perfect 10. [10]

If and when DCs are paid to treat chronic back pain on a palliative basis that has been shown to be more clinically-effective in long-term outcomes[11] for those with permanent spine impairments (like me), the cost for Physical Medicine and Rehabilitation (opioids and ESIs) and Spine and Orthopedic Surgery would be vastly lowered, too.

In this day of transparency when the call grows louder for evidence-based treatments that are effective and affordable, it’s time for our leadership publicly to tout expanding our services in Medicare and all healthcare systems to lower costs and improve outcomes. Indeed, the facts and research now falls on our side.

Historical Irony

The irony of this Medicare windfall for MDs is the historical fact that the AMA fought tooth and nail against the implementation of Medicare/Medicaid when then-Senator John F. Kennedy first pushed his legislation in a battle that became known as Operation Coffee Cup.

When JFK later became president in 1961, he found himself still at loggerheads with the AMA over his bill. Rather than containing the debate to Capitol Hill, the medical cartel resorted to its customary demagoguery by using the media to misrepresent the issues, mischaracterize their opponents, and push hot-buttons by suggesting “nightmarish scenarios.”[12]

This scheme sounds familiar to the recent tactics against Obamacare with conservative’s “confusing claims and outright distortions”[13] that have inflamed the debate in TV ads and radio talk programs to frighten people to vote against such changes in the healthcare system.

The fight against Medicare launched Ronald Reagan’s political career when he was hired as part of a covert campaign to undermine support for Medicare and Medicaid. The event was something of an inside job since Reagan’s father-in-law, Dr. Loyal Davis, was the president of the AMA.[14]

Reagan recorded 3,000 copies of an LP (“long playing” record) titled, “Ronald Reagan Speaks Out Against Socialized Medicine.” The AMA sent it to the “Women’s Auxiliary” of the Medical Association in each county, in all totally 82,000 members.


Similar to the present Tea Party, the GOP and AMA used a comparable figure of speech to “put on the coffee pot” to rally its troops, hence the term Operation Coffee Cup was born. These ladies were instructed to play the record for their friends and fellow physicians’ wives, and then get out the stationery so that each of them could write personalized letters to editors, newsmen on radio/TV, Senators and Congressmen.

There was no public announcement of the recording or of Operation Coffee Cup. It was a political tactic designed to appear spontaneous rather than the organized and well-funded behind-the-scene tactics used by the Committee on Quackery.

In his 20-minute passionate recording, the host of television’s “Death Valley Days” excoriated what he called “the foot-in-the-door” leftist technique that, he noted, was “one of the traditional methods of imposing socialism on a people…by way of medicine.”[15] Portions of the recording were also reportedly broadcast as radio commentary.

Reagan said if they did not prevent the passage of Medicare, “one of these days you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.”

Reagan’s efforts against Medicare were revealed, however, in a scoop by Drew Pearson in his Washington Post Merry-Go-Round column of June 17, 1961. Pearson titled his item on Reagan, “Star vs. JFK”:

Ronald Reagan of Hollywood has pitted his mellifluous voice against President Kennedy in the battle for medical aid for the elderly. As a result it looks as if the old folks would lose out. He has caused such a deluge of mail to swamp Congress that Congressmen want to postpone action on the medical bill until 1962. What they don’t know, of course, is that Ron Reagan is behind the mail; also that the American Medical Association is paying for it.

Reagan is the handsome TV star for General Electric . . . Just how this background qualifies him as an expert on medical care for the elderly remains a mystery. Nevertheless, thanks to a deal with the AMA, and the acquiescence of General Electric, Ronald may be able to out-influence the President of the United States with Congress.[16]

Operation Coffee Cup produced thousands of letters, which helped narrowly defeat the Medicare bill in the Senate later that year. Fortunately Medicare was ultimately passed and signed into law by President Lyndon Johnson in July 1965 when he controlled both houses of Congress.

According to TIME magazine in 1966, the AMA membership was still adamantly opposed Medicare at its convention:

It was an ironic accident of timing. The American Medical Association’s 115th annual convention in Chicago last week wound up just in time for the doctors to go home to deal with the consequences of Medicare, the social security-administered medical insurance that so many of them had fought against so vehemently and so long. Awareness that Medicare would become official on July 1 made its potential problems Topic A all through the convention.

As he took over the office that he will hold for the next twelve months, the new president, Dr. Charles Hudson, a Cleveland internist, counseled moderation. “There are people who think doom is going to fall in on us,” he said. “I think this opinion is not justified. We are not stepping off the brink into a bottomless pit of professional destruction and despair.” He proposed that doctors “make the most of this new program.” If they do, he suggested, they may help “prevent its extension toward a national health service.[17]

Obviously the AMA members took Dr. Hudson’s advice to heart when he proposed that doctors “make the most of this new program.” Looking at the outrageous sums reaped by MDs in the Medicare program, it is a wonder that the AMA still opposes healthcare reform considering the history of Medicare, a program that has produced billions annually for its members.

What Ron Reagan once touted as “a slippery slope to communism” has, ironically, now become the AMA’s own cash cow.

If it had been up to Reagan and the medical cartel who wanted to kill Medicare, nearly 50 million senior Americans today would be uninsured or underinsured, adding to the 75 million already in this situation.

Wither on the Vine

Another sordid chapter of Medicare occurred when the Committee on Quackery (COQ) turned its guns to the US Department of Health, Education, and Welfare (HEW) and the Medicare legislation. The COQ was afraid that inclusion of chiropractors into Medicare would facilitate their inclusion into public hospitals too.

Robert Throckmorton wrote in “What Medicine Should Do about the Chiropractic Menace,”[18] the goal was to starve chiropractors by limiting insurance payments. Previously in his infamous 1962 Iowa Plan, he specifically included a section to “Oppose chiropractic inroads in health insurance” so that chiropractic as a profession will “wither on the vine” and the “chiropractic menace will die a natural but somewhat undramatic death.”[19]

In 1967, the AMA Committee on Quackery released its anti-chiropractic Final Solution campaign goals that included blocking the inclusion of chiropractic under Title 18 of the original Medicare legislation. Once again, AMA resorted to dirty tricks to accomplish its goal to prevent the inclusion of chiropractic into Medicare that have never been revealed to the public.

On October 2, 1968, six weeks before the chiropractors were due to testify before the Panel, Dr. John Southard of HEW told Dr. Samuel Stevens of the AMA Committee on Quackery that “Testimony by the AMA or the medical profession is unnecessary as the final answer has already been determined.”[20]

You can read of this ugly chapter in Medicare at “Wither on the Vine.”

Hopefully as CMS continues to shed light on Medicare/Medicaid, other insurers will follow suit to see the clinical and cost-benefits we offer to an impaired nation where back pain is now pandemic.

Is it any wonder that back pain has become the #1 disabling condition in the nation with total costs approaching $300 billion when these “inefficient” medical treatments based on questionable science continue to increase at alarming rates despite the research debunking their premise and questioning their clinical and cost-effectiveness?[21]

Obviously it is imperative our leaders become vocal in this scenario to expand our coverage; indeed, it is past time we push back on the inefficient medical spine care industry to let payers and the public know we are the best alternative to drugs, shots, and spine surgery.

JC Smith, MA, DC, is a 35-year practicing chiropractor, author of The Medical War Against Chiropractors, and he maintains a popular website, Chiropractors for Fair Journalism.

[1] MS Mayer, “The Rise and Fall of Dr. Fishbein,” Harper’s Magazine (Nov. 1949):76-85.

[2] Meghan Hoyer, and Kelly Kennedy, First look at Medicare data in 35 years, USA TODAY April 10, 2014

[3] Peter Eisler, Meghan Hoyer and Alex Beall, 7 doctors got more than $10M from Medicare in 2012, USA TODAY April 9, 2014

[4] Jason Millman and David S. Fallis, Doctors react to release of Medicare billing records, The Washington Post, April 9, 2014.

[5] Marrecca Fiore, Physicians Are Talking: Medicare Payments Go Public, Medscape Business of Medicine, April 09, 2014

[6] Marrecca Fiore, Physicians Are Talking: Medicare Payments Go Public, Medscape Business of Medicine, April 09, 2014

[7] Marrecca Fiore, Physicians Are Talking: Medicare Payments Go Public, Medscape Business of Medicine, April 09, 2014

[8] US Spine Care System in a State of Continuing Decline?, The BACKLetter, vol. 28, #10, 2012, pp.1

[9] “Utilization, Cost, and Effects of Chiropractic Care on Medicare Program Costs”

Muse and Associates. American Chiropractic Association 2001.

[10] WB Stason, G Ritter, DS Shepard, C Tompkins, TC Martin, S Lee, “Report to Congress on the Evaluation of the Demonstration of Coverage of Chiropractic Services Under Medicare,” (June 16, 2009)

[11] Senna MK, Machaly SA, Does Maintained Spinal Manipulation Therapy for Chronic Non-Specific Low Back Pain Result in Better Long-Term Outcome?, Spine, Jan. 17, 220111

[12] Tumulty, Karen, Can Obama find a cure? TIME, August 10, 2009.

[13] Babington, Charles, Distortions rife in health-care debate, AP, August 3, 2009

[14] RJ Eskow, “Operation Coffeecup”: Reagan, the AMA, And the First ‘Viral Marketing’ Campaign … Against Medicare, Huffington Post, April 10, 2007

[15] Richard Rapaport, How AMA ‘Coffeecup’ gave Reagan a boost,, June 21, 2009

[16] Drew Pearson, “Attorney General Gets Scolding,” The Washington Merry-Go-Round, The Washington Post, June 17, 1961, C15.

[17] TIME, Doctors: The A.M.A. & Medicare, Jul. 08, 1966

[18] George P McAndrews, “Plaintiffs’ Summary of Proofs as an Aid to the Court,” Civil Action No. 76 C 3777, Wilk, June 25, 1987, PX-172 November 11, 1962.
[19] George P McAndrews, “Plaintiffs’ Summary of Proofs as an Aid to the Court,” Civil Action No. 76 C 3777, Wilk, June 25, 1987, p. 17.

[20]Samuel R. Sherman, letter from H. Doyl Taylor, director, AMA Dept. of Investigation, 20 February 1968, Wilk. PX-332
[21] The Burden of Musculoskeletal Diseases in the United States Bone and Joint Decade, Copyright © 2008 by the American Academy of Orthopaedic Surgeons. ISBN 978-0-89203-533-5, pp. 21.