Testimony before Texas House Appropriations Regulatory Subcommittee

Andy Schlafly, General Counsel
October 23, 2007

Mr. Chairman, and other Committee members, thank you for holding this important hearing and giving me the opportunity to testify here today.  I’m Andy Schlafly, General Counsel for the Association of American Physicians and Surgeons.  Five years ago the State of New York, where I’m based, held a similar hearing as oversight of its medical board.  It invited me to testify and that hearing was immensely helpful in curbing abuses there.  Your oversight of the Texas Medical Board today is essential to restoring integrity to this agency here.

Please allow me to say a few words about our physicians’ group. Our Association is a nonprofit national group of thousands of physicians, including many practicing in Texas. We were founded in 1943 and are dedicated to promoting the ethical practice of medicine and defending the patient-physician relationship. Our Association is almost exclusively membership-funded. We have filed amicus briefs in defense of physicians who are unfairly treated in disciplinary and hospital proceedings.

As a national group, we are able to monitor the actions of medical boards across the United States.  Sadly, we have seen the Texas Medical Board become the single most abusive medical board in the nation.  We know this because we hear from our Texas members.  In the case of Dr. Chris Kuhne, he was fined $2000 and forced to spend over $80,000 in legal fees because the Medical Board said he requested $42 too much as a copying charge for medical records.  He never even received the $42 that the TMB complained about.  The Texas Medical Board flatly rejected the ruling of the administrative law judge Wendy Harvel, who had ruled in favor of Dr. Kuhne after full hearings.

When a physician is sanctioned by the TMB, he or she is then often de-listed from insurance plans and forced to endure automatic investigations by other states.  After spending 4 years in medical school, 4 or more years doing an internship and residency, and incurring debts of far more than $100,000, a physician can lose all of that when the Texas Medical Board arbitrarily abuses its power.  Even worse, thousands of patients of that physician then lose their own doctor, and many then go without care.

In another example of arbitrary TMB action, one of its members arbitrarily added a harsh new sanction to the penalty already imposed by the Informal Show Compliance and Settlement Conference (ISC) panel.  In this case a pharmacist complained because he did not like the African Americans who kept coming into his store to fill prescriptions from the doctor.  At the ISC hearing, Texas Board member Dr. Keith Miller demanded revocation of the doctor’s license merely for prescribing cough syrup to these poor patients.  The lay member of the panel stood up to Dr. Miller and obtained a lesser penalty instead.  But later, when the lay member of the panel was no longer around, Dr. Miller added a new penalty prohibiting the doctor’s use of a physician assistant.  The doctor had no choice but to agree to this arbitrary and hurtful new penalty.

In a third example, Roberta Kalafut made a defamatory statement to the press about a physician who had already left Texas and obtained a license in another State.  The other State medical board had already rejected the conclusions of the TMB about this doctor.  But why was the TMB then trying to hurt a doctor who had left and was practicing in a state that already decided the TMB was out of control?  Sadly, this reflects the pervasive abuse of power by the TMB.

The TMB apparently manipulates who sits on the ISC panels, because in nearly every case the ISC panels have been dominated by Keith Miller, Roberta Kalafut or Larry Anderson.   A basic principle of fairness is a random assignment of a neutral decision maker.  Why isn’t the assignment of ISC panel members random?  At a minimum, fairness requires that.

The TMB welcomes complaints by insurance companies against good doctors helping their patients.  The TMB welcomes complaints by disgruntled physicians who dislike good competitors.  The TMB welcomes complaints about doctors who are outspoken, or who advertise.  The TMB even welcomes anonymous complaints without justification.

If an insurance company is unhappy with a physician, then it can stop paying claims for that physician.  But then the customers of the insurance company might get angry.  And the patients and physicians might have the safeguards of due process rights in legal proceedings. Then physicians have the right to a public hearing, the right to full cross-examination of witnesses, the right to a decision based only on information in the record, and the right to a meaningful appeal.

So Insurance companies, disgruntled competitors, pharmaceutical companies and others prefer to have the TMB deprive the physician of his due process.  They have been getting the TMB to do their dirty work for them.  Why are taxpayers being required to pay for this dirty work?

We see a targeting of physicians who advertise, and a targeting of physicians who accept cash-paying patients.  Physicians have a First Amendment right to advertise, and those advertisements encourage patients to see their doctors.  That is good for the public.  But this First Amendment right is meaningless when the physician is harassed and targeted by the medical board for speaking out.  Pharmaceutical companies spend billions of dollars advertising, and the TMB should not be retaliating against physicians who spend a tiny fraction of that on advertisements.

It is also essential that physicians accept cash-paying patients.  There are perhaps 46 million uninsured patients in America who need to be able to pay cash for medical services.  After all, cash is legal tender in Texas.  But in one case the TMB mercilessly harassed a physician who took cash from uninsured patients.  That is wrong.

It is ironic that a physician enjoys greater rights in contesting a simple speeding ticket than in a disciplinary proceeding that destroys his career. If a physician is sued by a patient, an employee, or a neighbor, he enjoys the due process rights we all find essential. But if he is subjected to a disciplinary proceeding before the TMB, the most essential due process rights are not there to protect him.

Our United States Supreme Court has emphasized that “The history of liberty has largely been the history of observance of procedural safeguards.”  McNabb v. United States, 318 U.S. 332, 347 (1943).  But let’s look at some of the violations of due process by the TMB procedures:

The TMB forbids physicians from recording or transcribing the ISC hearing.  This enables TMB members to become incredibly abusive because they know their behavior will never be seen by others.  What should be an informal, productive session has become a frightful, secret proceeding from medieval times.  It has become the epitome of the notorious Star Chamber.  There is no justification for preventing a physician from recording or transcribing that meeting.  Confidentiality for patients is easily preserved in court proceedings, and could also be easily preserved by this ISC meeting without infringing on the rights of physicians.

The TMB forbids physicians from questioning, cross-examining, or even knowing the identity of their accusers.  That is a violation of the Sixth Amendment right to confront our accusers.  That enables people having a conflict of interest to hide behind secrecy and make accusations that would never withstand cross-examination.

The due process provided by the TMB in connection with the State Office of Administrative Hearings (SOAH) hearing is a sham because the TMB can, and does, ignore any ruling it does not like, as in the case of Dr. Kuhne discussed earlier.  The appeal of the TMB decisions to the court system is also meaningless because the courts almost always defer completely to what the TMB did.  The TMB knows it possesses the equivalent of unreviewable, unappealable power and that does not comport with true due process.

The conflicts-of-interest by the TMB are not disclosed and they distort the proceedings.  Dr. Keith Miller was serving as an expert witness for plaintiffs’ attorneys in dozens of malpractice cases at the same time that he was leading the disciplinary committee at the TMB.  He has apparently also served as an advisor to Blue Cross/Blue Shield, which has a financial interest in denying care and in disciplining physicians who cost the insurance company money.  Due process requires an impartial decision maker.  Dr. Miller recently resigned amid public pressure, but how many more conflicts of interest remain on the TMB today?

Patients are the ultimate victims of this abuse of power by the TMB. Patients deserve the undivided attention and care of their physicians, without intimidation by the TMB or insurance companies. Instead, the unfair disciplinary process imposes conflicting pressures on physicians, such that they must choose between taking precautions to defend their license versus acting in the best interest of the health of their patients. When those choices are in conflict, the patient's health suffers. In some cases, patients lose their trusted physician entirely based on an unfair proceeding that is shielded from the accountability of public scrutiny.

Specific Proposals.

Physicians should have the right to transcribe or record the ISC proceedings. The interests of thousands of patients are at stake when suspension or termination of a physician's license is decided. Physicians should be able to invite their patients to attend the proceedings, and to speak.  Currently not even the physician’s attorney is allowed to say much, and the physician himself is often cut off mid-sentence. Defendants have a right to public trial. Why should the rights of physicians and their patients be any less?

Physicians should have the right to learn the identity of their accusers and to question them at an early stage in the disciplinary proceeding. In addition, the TMB should not be permitted to shop around for experts until it finds someone willing to testify against the physician. Government experts at these disciplinary proceedings should be selected from an objective group of physicians, just as juries are. There should be guidelines requiring that those experts review information by both sides to the dispute.

The standard for judicial review of these disciplinary proceedings is far too deferential. The courts assume that physicians have benefited from full due process, when in fact they have not. The findings of fact are assumed to be true on appeal, when in many cases they should be reviewed de novo. For example, any findings in a decision revoking or restricting a physician's license, which are not fully supported in the record, should require a remand rather than affirmance.

Physicians need discovery rights with respect to the experts and hearing committee members, who effectively determine the outcome. Like true defendants, physicians need to be able to explore and eliminate possible conflicts-of-interest that create bias in the proceedings. Judges have broad duties to publicly disclose information about themselves. So should experts and those who sit on these disciplinary hearing committees.

Rarely should the State be telling patients that they cannot see a particular physician because his license has been restricted, suspended, or terminated. Only the most egregious, documented cases of violation of trust should be candidates for license revocation. Patients should have as broad and diverse selection of physicians as possible, without government or third party interference.  Currently, the TMB treats issues of documentation more seriously than actual substance abuse.

Finally, there should be an investigation into the cases handled by Dr. Keith Miller before he resigned.  When there is an abrupt resignation by a prosecutor at the United States Department of Justice, the department will often review the prior cases handled by that prosecutor to check their integrity.  There should be a similar investigation of Dr. Miller’s cases to see if they were handled properly.  This would send a much-needed signal that abuse of power at the TMB will not be tolerated.

Conclusion

The Association of American Physicians and Surgeons opposes the intimidation of physicians through deprivation of their rights at disciplinary proceedings. This interference destroys the integrity of the patient-physician relationship and the ethical practice of medicine. Please consider the reforms suggested by our Association and others at this hearing. Thank you.