UNFINISHED BUSINESS: first, the boards, MOC, and rapacious financial conduct

Under Unfinished business we wryly observe that MOC (Maintenance of Ceritification) remains viable and unwell. We now know without doubt that ABMS specialty board physicians and executives are profiting from MOC fees which, allegedly, are supposed to support the not-for-profit educational mission of our traditional (since 1922) specialty boards. In fact, reasonable argument can be made that the original not-for-profit motif of the boards has been converted into one of personal gain that belies the legal enablement of the boards under 501(c)3 rules and regulations. What is called for now is an investigation by the FTC (for possible restraint of trade) and by IRS (are the boards conducting themselves in conformity with the law governing 501(c)3 organizations)? 

Here's some grist from the mill, in this case, from the 990 Form filed by the American Board of Psychiatry and Neurology (ABPN) in 2015:

The MD president was allocated $613,314 as "reportable income from the organization (W-2/1099-MISC)." In addition his "estimated amount of other compensation from the organization and related organizations" was $322,686.

Four ABPN Directors are listed as having received "reportable compensation" ranging from $175,947 to $246,012. In addition, the same four got additional "compensation from the organization and related organizations" ranging from $73,914 to $83,546.

Two managerial remunerations were reported as $111,661 (with an additional $50,351 listed as "other compensation") and $106,552 (with an additional $37,608 listed as "other compensation").

The VP of Research came in for $286,384 plus $99,668 for "other compensation"). 

Other remunerations were equally fat.

Here's the point: if a 501(c)3 organization has high enough expenses including salaries it is obvious that it can't make a profit if all of the money it takes in gets distributed to private hands inside the organization in the form of expenses. In this way, a not-for-profit organization can make more money for its officers, directors, trusteee, and others than can a true for-profit business.

Is this the way we want our ABMS boards to function?

References

"Specialty Boards Profiting from Physician MOC Fees," MEDSCAPE, 08/01/2017

"Medical Staff Votes Against Mandatory MOC," WORKCOMPCENTRAL, 01/22/2016

Form 990 (2015), Part VII, Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees, page 8.

ARE THE STAKES AT MOC (MAINTENANCE OF CERTIFICATION) TOO HIGH TO GIVE UP?

Scandalous overreach by the proponents of Maintenance of Certification (MOC) invites investigation by the Federal Trade Commission (FTC) and by Internal Revenue Service (IRS). 

FTC should determine whether or not trade is being or is likely to be restricted by the tenets of MOC doctrine and its financial operatives. IRS, meanwhile, should examine whether or not the ABIM Foundation meets IRS 501(C)3 requirements. The question is whether or not there is reliable evidence that MOC revenue is being diverted into the pockets of selected individuals.

Many observers think that is the case and that the amount of money paid out in personal remunerations seems exorbitant. This finding forces the question, namely,  to what extent the ABIM Foundation is a charitable organization or a well heeled 501(c)3 enterprise. 

Here are some facts and figures:

The president & CEO of ABMS (American Board of Medical Specialties), according to IRS Form 990, received total compensation of $779,487 for tax year 2013;

The ABPN (American Board of Psychiatry and Neurology) CEO in 2012 received total compensation of $843,591 -- according to IRS Form 990 for that year;

The ABIM (American Board of Internal Medicine), schedule J, Form 990, for 2012, reports base compensation for the president-CEO as $628,952;  

Reported base compensation for Senior VP/COO, ABIM, was $464,747;

Base compensation for the Sr. VP/CIO, ABIM, was $382,092;

Base compensation for the Senior VP/COO,  ABIM, was $326,520;

Base compensation for Senior VP/CFO,  ABIM, was $452,630.

-- not too shabby especially when one keeps in mind that these figures do not include income from what IRS refers to as "related organizations". In order to see this additional money jockeying, just go to Schedule J, IRS Form 990, and look at lines i and ii -- add 'em up and weep. Not to worry. Increased fees down the road re MOC will take care of any shortfalls. 

Readers are invited to check out this data by looking up Form 990 information. We expect to add to this report from time to time so stay tuned.  These figures show why MOC will not be easily vanquished -- the stakes are too high.

MEDICAL STAFF VOTES AGAINST MANDATORY MOC (MAINTENANCE OF CERTIFICATION REQUIREMENTS)

BOARD CERTIFICATION: SHOULD THE GENERAL PUBLIC HAVE AN INTEREST IN THIS ARCANE SUBJECT? IN THE OPINION OF THIS WRITER, THE ANSWER IS YES. The extravgant remuneration of American Board of Medical Specialty (ABMS) CEOs and presidents has been disclosed to be as high as $1.3 million at the American Board of Pediatrics (ABP), $681,000 at the American Board of Internal Medicine (ABIM), and over $800,000 at the American Board of Psychiatry and Neurology (ABPN). This level of remuneration requires high costs for Maintenance of Certification (MOC) and for study programs acceptable to each of the boards. These requirements in turn cut down on the amount of time practicing physicians can spend with patients and their own families. MOC requirements unnecessarily increase physicians' administrative costs, in turn helping to drive medical costs ever upwards. To date there is no evidence-based science showing that these requirements improve medical care. Here is how one medical staff recently dealt with this matter (the following is verbatim reproduction of the resolution passed by the hospital's medical  staff). 

ARGUMENTS AGAINST

THE BYLAW AMENDMENT REQUIRING BOARD CERTIFICATION 

Several concerns have been raised as to the way this amendment to the medical staff bylaws has been written

#1  Requirement for board certification is NOT the community standard.

#2  New physician members who subsequently allow their board certification to lapse or marginally fail to pass recertification will immediately lose their medical staff privileges.

#3  The logistics of maintaining continuous active certifications in multiple boards (as required by certain subspecialties) carries with it the very real risk of a possible time gap in active certification (with a resultant loss of privileges)

#4  Physicians at the mid-point of their careers, who are otherwise well qualified in their specialty and who have previously passed their boards (but did not recertify) would not be eligible to apply for medical staff privileges.

#5  Current physicians who fail to complete the re-application process or pay their medical staff dues in a timely fashion automatically lose their medical staff membership and are REQUIRED TO FILE A NEW APPLICATION.  These long-standing members may well be subject to the new requirements.

#6  It is not unthinkable that the new medical staff members (who are subject to these strict requirements) will quite reasonably feel that ALL medical staff members should be bound by the same mandate. These new members may ultimately be represented in such numbers that they tip the balance and there is a resulting Bylaw change to that effect. 

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Editor's comment:  Our recommendation is that physicians opposed to mandatory MOC adopt this amendment or one similar to it at their own hospitals. The physician who led this charge against mandatory MOC was James B. Weidner, MD, specialist in cardiovascular disease and internal medicine. The hospital is Regional Medical Center in San Jose, previously known as Alexian Brothers.

Meanwhile, at the Union of American Physicians and Dentists (UAPD) Triennial, the UAPD passed two resolves of interest concerning MOC. Resolution # 5 states that "Medical Staff Bylaws allow medical staff membership for physicians who meet the minimum state requirements for the position (board certificate or eligibility is not a hiring requirement)." Resolution # 10  states that "UAPD negotiate for reimbursement of the Maintenance of Certification/Fees Programs by the state in our contract." 
   

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References:

Change Board Recertification, http://www.changeboardrecert.com

Open Letter to the American Board of Pediatrics, http://rebel.md/open-letter-the-american-board-of-pediatrics/

"Maintenance of Certification (MOC) and the IRS: where money and power meet," 7/29/15

"Maintenance of Certification, a rising business opportunity," 5/15/2015

"When does a $681,000 salary require additional incentive compensation?,"  4/17/15

"Resolutions passed at the UAPD 2015 Triennial," December 8, 2015



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Maintenance of Certification (MOC) and the IRS: where money and power meet

We've heard a lot lately about MOC and its finances: in 2012 the president and CEO of the American Board of Internal Medicine (ABIM) pulled down $628,952 and of that amount $465,687 was "base compensation" while $44,742 was "bonus and incentive compensation" These figures come from line (i) of Part II,  Schedule J, re "officers, directors, trustees, key employees and highest compensated cmployees" as listed in ABIM's IRS 990 report, 2012. 

On the same line in Schedule J the president and CEO is listed as having received $83,654 in "retirement and other deferred compensation." We aren't told what type of compensation format comprised this prize, e.g., was it "defined benefit," 401-K, or something else?

To that was added $34,869 in "non-taxable benefits."

The total for Line (i) for 2012 was $628,952.

Then comes Line (ii): base compensation was $155,229. "Bonus and incentive compensation" was $14,914. "Retirement and other deferred compensation" was $27,885. "Non-taxable benefits" was $11,623. The total for line (ii) was $209,651.

The total for lines (i) and (ii) is $838,603. Not bad, not bad at all for an internist!

Plus there are 15 others at or near or above the $200,000 level. 

Where does this money come from?

One answer is possibly from donors, e.g., in 2012 the ABIM Foundation contributed $245,000. The Joshiah Macy Jr. Foundation contributed $151,632 while the Medical University of South Carolina contributed $62,789.

Another answer is that the majority of the money comes from MOC, testing, courses, and programs put on by non-board independent but nonetheless contingent organizations that charge for course attendance that in many cases contributes to MOC recertification. The point is that MOC in its current format cannot be sustained without MOC fees paid by doctors who submit to the programs as though they were necessary to maintain certification in a country where CME (Continuing Medical Education) is available in all 50 states.

The continuing clamor to set MOC aside in favor of alternative programs such as NBPAS (National Board of Physicians and Surgeons) is growing. It won't be the first time that lust for power and money brought down a financial empire, this time possibly the American Board of Medical Specialties (ABMS) where, not incidentally, the president and CEO took down annual compensation of $779,487 in 2013 (Form 990, Schedule 3, Part II -- Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees). 

In the ABMS case the declared "base compensation" was $681,188 to which was added $12,500 in "bonus and incentive compensation," $71,000 in "deferred compensation," and $14,799 in "non-taxable benefits." The 990 Form doesn't state if the "deferred compensation" is in the form of "defined benefits" or 401-K or other. 

Finally, our observation that some Form 990s don't include all of the officers, directors, trustees, key employees, and highest compensated employees is quizzical. Why not? 

MAINTENANCE OF CERTIFICATION (MOC): a rising business opportunity!

Continuation of our Money and Medicine Series

Maintenance of Certification (MOC) has become the latest repository of profitability for physicians and others with an ear to current business practices in America. The idea put forth is that MOC is useful for making sure that physicians keep up to date -- never mind that all 50 states have already imposed mandatory Continuing Medical Education (CME) that requires physicians to take post-graduate courses to maintain licensure. These courses are expensive and often require travel. These programs have generated money for the entrepreneurs who run them. Now the specialty boards want in on the loot. The American Board of Internal Medicine (ABIM) is an example of the extravagance to which these programs may go.

If we study the IRS Form 990 for ABIM for Tax Year 2012, we see that the ABIM president and CEO received base pay of $465,687 to which was added $44,742 in "bonus and incentive compensation ." One may ask with reasonable curiosity why a base pay of nearly one-half million dollars would need another forty-four grand for "incentive compensation." We'll have to put that question to the ABIM board. We may presume with reasonable medical probability that it was not to avoid a "consolation" stipend.

However, that's not all. In addition to the $465,687 for base pay and the $44,742 for "bonus and incentive compensation," the president and CEO was also awarded $83,654 in retirement and other deferred compensation, plus "non-taxable benefits" of $34,869.

The total for this compensation package was $628,952. not bad for not even having to lift a scalpel or a stethoscope! And, yes, we have similar information for other boards, more on the other boards in future issues. In the meantime, know that there were 15 or more persons at ABIM who were compensated $190,000 or more. Impatient scanners of this information may on their own look up Form 990 for each of the specialty boards and for the ABMS itself (American Board of Medical Specialties). In short, ABIM has itself become a rising business prospect.

As for the purported usefulness of MOC, one respondent to this unproved assertion wrote  (viz., blog of Dr. Wes, 5/14/15) that "there is no evidence MOC improves performance ... this is just poor marketing and another ABIM/ABMS fabrication."  The Florida Medical Association (FMA) voted that MOC should not be used as part of the criteria that hospitals use to designate medical staff. More  state medical associations should follow this example. In the meantime, MOC appears overrated as an educational tool and underrated as a money-making machine.

References

"Maintenance of Certification Controversy," Dr. Wes, drwes.blogspot.com, 05/14/15

"Do We Really Need Physician Re-Certification Testing? There has to be a  better way," Manisha Juthani-Mehta, MD, www.psmag.com/health-and-behavior, 4/24/15 (this doctor describes having had to spend $1,720 in 2010 for MOC and $775 for the infectious disease exam, a total of $2,495. She states that the current internal medicine exam costs $1,940. This testing is clearly beyond what is necessary and reasonable; however, it makes doctors jump through hoops while enriching the board and its paid personnel including officers, trustees, and directors). 

"When does a $681,000 salary require additional incentive compensation," The Weinmann Report, www.politicsofhealthcare.com, 04/17/15

"Florida Doctors Fight Back," The Weinmann Report, www.politicsofhealthcare.com, 09/18/14

"Do Doctors Expire in 10 years?" The Weinmannn Report, www.politicsofhealthcare.com, 05/12/14

"Maintenance of Certification," JAPS, V. 18, # 3, Fall 2013, by Christman, K.

"Board certification - a malignant growth," JAPS, V. 16, # 2, by Dubravic, M.

"Disillusionment invades medical practice," The Weinmann Report, www.politicsofhealthcare.com, 02/22/14

"How physicians eat their young," The Weinmann Report, www.politicsofhealthcare.com, 02/12/14

"Money and Medicine," The Weinmann Report, www.politicsofhealthcare.com, 07/21/12

WHEN DOES A $681,000 SALARY REQUIRE "ADDITIONAL INCENTIVE COMPENSATION?" Is there a reasonable argument that ABMS and other board salaries are tied into MOC (Maintenance of Certification)?

According to Form 990 from the IRS for 2013 for the American Board of Medical Specialties (ABMS), Lois Margaret Nora, MD, JD, MBA, president & CEO of the ABMS,  got base compensation of $681,188 plus "bonus and incentive compensation" of $12,500 plus "deferred compensation" of $71,000 plus "nontaxable benefits" of $14,799 for a total of $779,487.

Net assets by contrast, pages 1 and 12 of Form 990 are listed as minus $1,238,805.

Of interest is that Dr. Huntoon in AAPS reported $330,000 in remuneration for Dr. Nora for 2012 (see references below) whereas our copy of Form 990 shows remuneration for 2013 of $779,000 -- if we have actually documented a raise, kudos for Dr. Nora.  All ABMS specialists should look over their organizations' Form 990s as a matter of ordinary due diligence. 

According to Form 990 for the American Board of Pyschiatry and Neurology (ABPN) for 2012, Larry R. Faulkner, MD, president and CEO, was compensated at $560,522 for base compensation plus $260,713 for "retirement and other deferred compensation," $22,356 for "nontaxable benefits" for a total of $ 843,591.

Total revenue for 2012 is listed on page 4 of the form in the amount of $17,122,985 (expenses were $12,389,987). Page 10 of the ABPN document, under "Statement of Functional Expenses," shows "assessments of ABMS" in the amount of $687,884. Page 11 shows end-of-year net assets of $65,083,864.

MAINTENANCE OF CERTIFICATION (MOC)

MOC has become one of the most controversial programs within medical practice with a myriad of organizations willing to take it on and offer their own Continued Medical Education (CME) at prices ranging from bargain-level to exorbitant. The point is that the selling of education has become its own business with ABMS boards devouring their own members as fast as greed allows digestion.

When the American Academy of Neurology (AAN) filed a timid letter in protest to ABPN and asked that MOC Part IV be repealed, that organization got the response of feckless organizations everywhere. Doctor Lois Nora, quoted in NEUROLOGY TODAY, 04/02/15, said with pithy candor, "I don't see us moving on that."

Current AAN president, Tim Pedley, MD, is quoted on page one of AAN News, April 2015, as stating that the MOC Part IV "process is unnecessarily cumbersome" as though a less cumbersome inconvenience would not distress AAN. Meanwhile, in NEUROLOGY TODAY, 04/02/15, Pedley practically apologizes for his support of several hundred disgruntled AAN members and seeks to dissociate AAN from ABPN ("AAN is an independent association with no control over ABPN, the American Board of Medical Specialties, or the MOC rationale and process"). It may eventually turn out that the members no longer need AAN and reconsider paying dues.

Meanwhile,  ABPN's $843,591 salaried president and CEO, Larry Faulkner, MD,  timorously stated in NEUROLOGY TODAY, " ... wiping out part of the requirements (he means MOC Part IV) is not something we at ABPN believe we have the authority to do. The American Board of Medical Specialties sets the standards, and unless they decide to change them, we don't have a choice but to follow them." We disagree. ABPN is not supposed to be anybody's subject or hand-maiden.

MORE TO THE POINT: MONEY

As we pointed out above, the ABPN form 990 IRS document from 2012 lists $687,884 as "assessments of ABMS" which itself showed negative net assets for 2013 in the amount of $1,238,805. Under these circumstances it is reasonable to inquire further to what extent fiscal issues between the specialty boards and ABMS may be inextricably intertwined.

References

"Money and Medicine," The Weinmann Report (www.politicsofhealthcare.com), 7/21/12

"How Physicians Eat their Young," The Weinmann Report (www.politicsofhealthcare.com), 2/12/14

"AAN Calls for Elimination of MOC Part IV," AAN News

"Do Doctors Expire in 10 Years?" Workcompcentral, Robert Weinmann, MD, 5/15/14 (In the original AAPS article Larry Huntoon, MD, PhD, pointed out that AAN had scheduled an MOC symposium and that Dr. Nora was to be a speaker but did not feel obliged at the time to disclose as a possible conflict of interest that her 2012 salary at ABMS was about $330,000. AAN then is reported to have told AAPS that no such disclaimer was needed since AAN wasn't giving CME credits to participants)

"Do Doctors Expire in 10 Years?" American Association of Physicians and Surgeons (AAPS News), May 2014 (V. 70, #5)






  

FLORIDA DOCTORS FIGHT BACK

From the Association of American Physicians and Surgeons, AAPS News, September, 2014, we learn that the Florida Medical Association passed the following resolution, namely, "that the FMA advocates that the lack of specialty board recertification (italics added) should not restrict the ability of the physician to practice medicine in Florida." 

In a feisty letter-to-the-editor, Ellen McKnight, MD, Pensacola, writing over the title, "FMA Passes Anti-MOC Resolution,"  stated that "hospital employed physicians should immediately use this to remove MOC requirements from hospital medical staff bylaws."

In a previous editorial in this blog, "How Physicians Eat Their Young," 2/12/14, we showed how the specialty boards use MOC and  re-credentialing to convert their previously august and professional objectives into money-making opportunities for themselves. We recommended taking a look at each board's IRS Form 990, not only for what is reported, but also for what is not reported, e.g., individual compensation arrangements.

We provided references for interested parties. Among the juice-laden items we revealed was that as of 2011 the American Board of Internal Medicine reported total assets of $57, 586, 843 -- so what, dear reader, for what purpose do you think ABIM needs nearly $60 million? 

We informed our readership that as of 2011 the ABIM board chair was remunerated about $800,000. We revealed that recertification costs for an allergist were $2,700 and that MOC costs for an allergist were $2,850. 

Do not think for a moment that FMA's resolve to reduce the necessity for recertification will go unnoticed by the boards -- the huffing and puffing are still to come. We await and expect similar resolutions from other state medical associations, unions, and professional societies. 

Peer-reviewed journal  references are appended to our 12 Feb 14 editorial entitled "How Physicians Eat Their Young." 

DO DOCTORS EXPIRE IN 10 YEARS?

"Do doctors expire in 10 years" is the title of the lead article in AAPS news from the Association of American Physicians and Surgeons, Vol. 70, No. 5, May 2014. Our readers may enjoy comparing this piece with items from The Weinmann Report, www.politicsofhealthcare.com, "How Physicians Eat their Young," 12 Feb 2014 and "Money and Medicine," 21 July 2012.

The subject is recertification and reveals how boards, associations, and other organizations may use Maintenance of Certification (MOC) to enrich themselves and their organizational coffers at the expense of their own members. The AAPS poses this theoretical question: if "one day a highly trained, experienced physician may be board certified -- and the next day, after examination results are revealed or a deadline for MOC compliance passes, he may be decertified and unemployable. In that one day, could he have become demented, or fallen behind in keeping up with this field?"

The article points out that "resolutions against MOC have been enacted recently by the American Medical Association and the state medical societies of New Jersey, Michigan, Ohio, Oklahoma, New York, and North Carolina."

In the same issue, Larry Huntoon, MD, PhD, points out that the American Academy  of Neurology (AAN) was to feature an MOC International Session but did not feel required to file a conflict-of-interest disclosure from Lois Margaret Nora, MD, CEO of ABMS. In 2012 Nora earned about $330,000 in compensation from ABMS and associated organizations according to the ABMS form 990."

AAN reportedly told AAPS that no such disclosure was necessary because AAN did not give CME credits for attendance at this session.

Once again we see an assault on physician autonomy, this time from within, from persons who benefit financially by imposing MOC requirements on hapless physicians whose evolving practices may not meet the confinements of MOC predators.

Additional References

Journal of American Physicians and Dentists, V. 18, # 3, Fall, 2013, "Maintenance of Certification (MOC) : the elite Agenda for Medicine," Christman, Kenneth, "the elite medical establishment correctly foresaw that there as a huge treasure in the medical certification  business").

Journal of American Physicians and Dentists, V. 16, #2, Summer, 2011, "Board Certification -- a Malignant Growth," Dubravic, Martin, MD.

How Physicians Eat their Young

"Dear Colleague," begins the 5 February 2014 issue of the American College of Physicians newsletter just before it tells the recipient that "our records indicate that you earned your ABIM certification prior to 1990 and therefore hold a time-unlimited certificate." The newsletter then reminds internists in this category that they're sometimes  referred to as "grandfathered" because they don't have to recertify every ten years. Next comes the financially self-serving bombshell with the newsletter's announcements of the "ABIM Maintenance of Certification Changes" and the disclosure that "as of March 31, 2014, ABIM will begin reporting whether or not board-certified internists (including those with time-unlimited certification) are meeting 'Meeting MOC Requirements.' "


In other words, starting on 3/31/14 some internists will be more equal than others (see George Orwell's 1984).


The hammer falls on the next page where the newsletter tells its readers that "If you do not complete the ABIM MOC program requirements, you  will be reported as 'Certified, not Meeting MOC Requirements.' You will NOT be reported as "Not Certified" for failing to meet MOC requirements." Internists who don't measure up can count their lucky stars for ACP's largesse and also for the advice of its lawyers about what ACP needed to do to avoid individual and class action lawsuits.


This article from ACP does not disclose costs to prospective participants but it does mention that passing the MOC exam by 12/31/23 "is in addition to continuing to meeting the point requirements of the MOC program (including the two- and five-year milestones."


The first comment we've received by one of the board-certified internists with a time-unlimited certificate is this wry remark : "So ... they are going to allow those of us that do not have to recertify to continue to be listed as certified but will list us in a way that sounds LESS CERTIFIED than those that pay them (underlining added)."


We looked up some of the information that we think all physicians should be interested in, boarded or not, recertified or not. We relied on IRS Form 990, a public document few physicians ever see.


As of 2011, total assets of the American Board of Internal Medicine were $57,586,843. Internists should ask themselves why ABIM needs total assets of nearly $60 million. ABIM's Chairman of the Board's pay package was about $800,000 -- not bad, eh?  Recertification costs for an allergist were $2,700 while MOC costs for allergists were $2,850. Why shouldn't ACP want to get in on the action if there's a ready contingent eager to pay?


In fact, the door is open, not so much for complainants, but for competitors who can identify a possible need and a probable payer (the latter is the crucial element!). It's part of physicians' flight or fight response from the practice of medicine, unfortunately, with the focus on flight.


References


Journal  of American Physicians and Dentists, V. 16, #2, Summer, 2011, "Board Certification -- a Malignant Growth," Dubravic, Martin, MD


www.politicsofhealthcare.com, Saturday, 7/21/12, "Money and Medicine," Weinmann, Robert, MD


Journal of American Physicians and Dentists, V. 18, # 3, Fall, 2013, "Maintenance of Certification (MOC): the Elite Agenda for  Medicine," Christman, Kenneth, MD ("the elite medical establishment correctly foresaw that there was a huge treasure in the medical certification business")