Sometimes when you're ready to slam dunk a basketball, a defender you don't see comes out of nowhere to block your shot. You're not only upset that you missed, but also that you may never get such a clear shot again.
Phil Dyer knows that feeling. A Republican state representative from Washington, where he is chair of the House Healthcare Committee, Dyer introduced a bill last year that seemed sure to eliminate the corporate practice of medicine doctrine.
But at the last second, Dyer says, it was rejected out of fears it would hamper fraud investigations.
Leading the opposition, Dyer says, were property and casualty insurers, along with "the guys in the blue shirts with yellow lettering" from the FBI and the DEA.
Dyer is still trying to take his shot, with talk of a meeting this summer to come up with a bill all parties like. But his easiest shot at getting rid of the corporate practice doctrine has already passed.
Washington is not among the five states that have laws against corporate entities owning physician groups -- the so-called corporate practice of medicine doctrine. However, the state's Supreme Court, most recently in 1988, ruled that such arrangements are illegal. The 1988 case centered on a partnership gone sour between a dentist and an investor involved in running the financial side of the business.
Dyer, a vice president with Seattle-based malpractice insurer The Doctors Company, decided that with the medical marketplace undergoing rapid change, the corporate practice doctrine had outlived its usefulness.
Doctors needed something to allow them to enter what Dyer called more innovative arrangements, such as joint ventures with business partners or disease management clinics involving different specialties. Under Washington law, even physicians of different specialties can't hold stock in the same professional corporation. As a result, office-based physicians practice mostly as single-specialty units.
In 1997 Dyer introduced a bill, written in large part by Washington State Medical Association counsel Andy Dolan, that would abrogate the corporate practice of medicine doctrine, except for dentistry and veterinary medicine.
Dolan, along with representatives of the Washington Osteopathic Medical Association and the Washington State Psychological Association, testified in favor of the bill. It passed unanimously through the House and Senate.
Dyer was close to the hoop. The ball was over his head. And then someone blocked his shot.
"The bill passed unanimously because no one was against it -- at the time," he says.
Washington Insurance Association President Kenton Brine didn't even hear about Dyer's bill until two months after it passed in February 1997. His organization, which represents property and casualty insurers, was alerted by those companies' investigative units. Meanwhile, the FBI and other federal investigators also caught wind of the bill.
All those groups shared one concern. Eliminating the corporate practice of medicine doctrine meant eliminating one of the investigators' most powerful tools in shutting down fraudulent clinics set up to "treat" people injured in staged accidents.
The way it works, Brine says, is that a so-called "bump-and-run" or "slip-and-fall" clinic is organized by a nonphysician owner who employs a licensed physician. The owner also functions as a "capper," a person who sets up staged falls or fender benders. The capper then hustles anyone involved in the accident, injured or not, to the clinic, which overbills insurance companies for care given.
Brine says the investigators' immediate worry was that Dyer's bill was retroactive to Jan. 1, which would have wiped out some fraud cases already under investigation and nullified arrests that had shut down 18 fraudulent clinics in Washington, because the corporate practice of medicine law was key in showing proof of a crime.
"It's a red flag, it's a canary in a coal mine that the clinic may be operating outside the law," Brine says. "Insurers, when they find a clinic that's (believed to be) overbilling, they take a look at it by asking first if it's a legally owned clinic."
After Washington Gov. Gary Locke listened to the entreaties of the insurance companies and other investigators, he vetoed Dyer's bill on May 20, 1997, too late in the legislative session for Dyer to try for an override. The only item on the bill that got through was the measure allowing physicians of different specialties to organize in one professional corporation.
"It was really bizarre," Dyer says. "And it has become even more bizarre."
When Dyer reintroduced his bill into the 1998 legislative session, the idea of eliminating the corporate practice doctrine temporarily was abandoned by the Washington Medical Association, which felt the corporate practice of medicine wasn't as important as other matters.
Washington has a part-time legislature that meets for only 60 days in even-numbered years, and lobbying organizations tend to limit the bills they are willing to push.
"We had some much more pressing issues, including repealing the (hospital) certificate of need (law), tort reform and fighting off giving nurse practitioners full prescription authority," says Carl Wilson, a medical association lobbyist.
"We thought we would let (corporate practice) percolate for a year."
With one of Dyer's biggest allies out, about the only ones commenting on his bill were the same opponents that had helped kill it a year earlier.
In a Jan. 26 letter to Dyer after seeing a copy of the proposed 1998 bill, FBI supervisory special agent Jason Moulton wrote about a recent investigation that had shut down 15 clinics, "whose owners (all) were nonprofessional."
"I don't think we should allow anyone with the ability to pay a licensing fee to the respective city or county to open a medical clinic," wrote Moulton, who for 10 years has been in charge of healthcare fraud investigations in the state of Washington.
"Perhaps my view is jaundiced as a result of my experience, but I think that when 15 clinics close their doors when the authorities start looking, (that) speaks very loudly."
Primary support came from the Washington Hospital Association, which endorsed the bill as a way to avoid any legal challenge concerning the employment of physicians. In Illinois, the state Supreme Court ruled in favor of a hospital when a physician sued to break his employment contract, citing the corporate practice of medicine doctrine (see December, 1997, page 9; July, 1997, page 2).
In the midst all the turmoil, the Washington bill went from a seemingly sure thing in 1997 to a proposal that couldn't get so much as a final reading in Dyer's House Healthcare Committee; it died on Feb. 6.
As for the Washington Medical Association, it didn't fare much better: The group did fight off the bill allowing nurse practitioners to dispense prescriptions, but the certificate of need and tort reform bills failed.
Dyer may well take his last shot at a corporate practice of medicine bill this summer. He and his staff say they want to get the Washington Medical Association, insurers, federal investigators and others in one room to draft a bill that would eliminate the corporate practice of medicine doctrine without crimping fraud investigations.
What Dyer is attempting is no longer a one-on-one slam-dunk, but a three-pointer from the corner as the clock runs down. He is not running for re-election, so he won't be around to introduce a bill when the next legislative session begins in January 1999. It's looking like he may have to pass the ball to somebody else.
"This is politics," Dyer says. "It's possible to turn it around again in this arena."