The Need for Antitrust Investigation of the “PHP Rehab Racket”

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Screen Shot 2015-03-06 at 4.38.05 AMThree shells and a pea–ASAM, FSPHP, and LMD.

“PHP-Approved” Assessment and Treatment Centers

On the above list  can be found the Medical Directors of a number of drug and alcohol rehabilitation facilities.

Talbott, Marworth, Hazelden, Promises, and another two-dozen or so “PHP-approved”  assessment and treatment centers are represented on this list.    State Physician Health Programs (PHPs) refer doctors to these facilities for evaluations.  PHPs are non-profit tax-exempt organizations.  They do not evaluate or treat patients.   If a physician is referred to a PHP for a suspected problem the assessment must be done at an outside facility which will invariably be linked to a name on the list of Like-Minded Docs.

What most people do not know, however, is that this is an exclusive arrangement.    Evaluations are constrained to one of these facilities.   It is mandated.   No bargaining.  No compromises. No choice.  In other words it is a coercion.

“What’s wrong with that?” some may ask.  These facilities are all recognized as top-drawer and first-class.  Perhaps they were hand-picked on objective criteria and the PHPs are just making sure that doctors get the best assessments money can buy– decision making by experts based on knowledge and experience–picking a winner so you don’t have to.

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No documented Policy for Selecting Treatment Centers.  Criteria for “PHP-Approval” Unknown by those “Approving”

What objective criteria are used in selecting “PHP-approved” assessment and treatment centers?    According to a  Performance Audit of the North Carolina Physicians Health Program done by State Auditor Beth A. Wood that’s a good question.

The Audit noted the predominant use of out-of-state treatment centers.   In addition to “creating an undue burden on” those being evaluated the

 “Program procedures did not ensure that physicians received quality evaluations and treatment because the Program had no documented criteria for selecting treatment centers and did not adequately monitor them”

In fact the audit found no documented policy for selecting treatment centers.  Those demanding documented policy for approval and doing the approving could not give an explanation for what any of  these things even mean.    

Screen Shot 2014-05-07 at 5.38.23 PMThe auditor also noted this lack of concrete criteria goes against both The Federation of State Physician Health Programs (FSPHP) and the Federation of State Medical Boards (FSMB) requirements that physician health programs use established guidelines to select evaluation providers and treatment centers.

In its “Physician Health Program Guidelines,” the FSPHP established: • “Characteristics of Evaluation Providers Appropriate for PHP referrals,” and • “Characteristics of Treatment Programs which are appropriate for PHP referrals.”  And in its “Policy on Physician Impairment,” the FSMB states : • “PHPs should employ FSPHP Guidelines in selecting the providers/facilities to provide treatment of physicians with addictive and/or psychiatric illness.”

When the NC PHP was asked to define these characteristics they explained that they learned  of “new treatment centers through professional networks and other informal sources” and used the “treatment centers’ reputation as a basis for establishing a referral relationship.”      Staff credentials, quality of care, treatment methods and modalities, patient choice, follow-up data, outcomes and other objective information apparently took a back-seat to ill-defined and subjective word-on-the-street.   Screen Shot 2014-03-15 at 7.33.14 PM

This  “failure to use FSPHP  recommended criteria to select treatment centers,” the Audit concluded “could cause the Program to enter into referral arrangements with service providers that do not meet quality standards”

Ironically the  NC PHP failed to follow guidelines they themselves introduced and demanded be followed but could produce no documented criteria they existed.    They could not even provide plausible criteria.   Professional networks, reputation and other informal sources are fine for some choices.  That’s how I picked out my first skateboard.     These resources can play in important role in choosing a shirt, new sneakers or even a car but they do not constitute selection criteria for an assessment in which the consequences and recommendations made for the person being assessed are significant, potentially life-altering and possibly permanent!

And to top it off the  Medial Director of the North Carolina PHP,  Dr. Warren Pendergast,  was the  President of the FSPHP at the time of the audit.  PHPs are not clinical providers but monitoring agencies.  They meet with, assess and refer doctors for evaluations and and monitor doctors through drug and alcohol testing and the monthly reports of others.     As such the PHP is tasked with two jobs-referring doctors for evaluation and then monitoring them after they have been evaluated.  The fact that they could not produce the facts and reasoning of the very basis for which they exist is incomprehensible.   The President of the FSPHP being unable to define the selection criteria for approved and mandated facilities is like Anthony Bourdain being unable to explain the ingredients of an omelette.

To summarize, doctors in North Carolina were being forced by the PHP  to have evaluations at “PHP-approved” assessment and treatment centers but the PHP was unable to explain anything substantive in defining any of it.  Why?  Because no qualitative objective selection criteria exist.

“Reputation” obfuscates and confuses.  It does nothing to support or justify.    It is like answering “numbers” to the question what is 9 x 9.

And this is especially concerning when it is realized that these evaluations are limited to facilities and people  tied financially and ideologically to the groups and individuals who are mandating the referral.

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All of the “PHP-approved” assessment centers are represented by medical directors who belong to Like-minded docs-an admittedly  12-step steeped conservative fundamentalist faction of the American Society of Addiction Medicine (ASAM).   And all of these facilities are private-pay rehabilitation centers that recommend doctors be treated three-times longer than the rest of the population.

Limiting assessment and recommendations to this close-knit  group of evaluators is a monopoly of force.  It is unethical if not criminal. And the fact that these are all heavily indoctrinated 12-step facilities also makes it a violation of the Establishment Clause of the 1st Amendment.  Moreover,  many of the medical directors at these facilities are also graduates of the same program in “recovery.”

And if it is looked at from this vantage point it is a system of  self-referral.  Self-referral harms patients and society as a whole.

It is a shell game that removes all choice and removes freedom, objectivity, fundamental fairness, autonomy and choice.


Antitrust law

American antitrust law was “designed to be a comprehensive charter of economic liberty aimed at preserving  free and unfettered competition as the mule of trade. It rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic political and social institutions” (29, p 4).

In this case it is a safe assumption that all doctors desire the “best possible” care and this requires objective and unbiased assessment and treatment when requested by Physician Health Programs.

Congress and the Supreme Court have made clear is that the “best” services are selected by  consumers when their choice is made in an open market free of restraints. Eventually the marketplace will determine the best medical care, not judges, juries, or even doctors (30, p 904).

PHPs are clearly bypassing patient choice.  In 2011 the American Society of Addiction Medicine (ASAM) issued a Public Policy Statement on coordination between PHPs, regulatory agencies, and treatment providers recommending  that  only “PHP approved” treatment centers be used in the assessment and treatment of doctors.  The state Medical Boards have accepted and adopted this policy and denying doctors requests for assessments at non “PHP-approved” facilities. Many have been sanctioned for resisting, protesting or even questioning this unlawful monopoly.  It is prohibition of patient choice.

The N.C. PHP is representative of most PHPs. This is not an exception but a rule.      PHPs are mandating assessments only at facilities they approve but cannot define or explain how these facilities are “approved”  Yet The ideological and financial conflicts of interest between the PHPs and their referral centers are self-evident.  Connect the dots.  

State medical boards are enforcing this mandate under threat of loss of licensure.   Your money or your life.

Federal Trade Commission

For these reasons an investigation by the Federal Trade Commission and Office of the Inspector General of the DHHS is necessary.  For those who have been abused by this unholy alliance I urge you to look at this list to see if the medical director of the facility at which you were evaluated is represented.

If so note it here.   My guess is almost everyone will find this correlation and representation in numbers would necessitate both state and Federal investigation.  If this were done it  could quickly transform a system of institutional injustice into one that allows choice.

Applying Antitrust law to the linkage of  PHPs  and “PHP approved” assessment and treatment centers is consistent with free-market law and theory.   Demanding accountability would provide a powerful deterrent to this type of unfettered abuse.

1. Northern Pacific Railway v U.S., 356 US I (1958).

.2.  Koefoot v American College of Surgeons. 652 F Supp 882 (ND Ill 1986).

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When Dentists Go Too Far: North Carolina Board of Dental Examiners v. Federal Trade Commission

Originally posted on Article 8:Antitrust litigation hasn’t disappeared, but rather changed its focus. Instead of targeting the great railroad empires of the late 19th century, today’s antitrust efforts focus on more minute industries, like dentistry. In October, the Supreme Court heard arguments for North Carolina State Board of Dental Examiners v. Federal Trade Commission, in which…

https://disruptedphysician.com/2015/03/20/when-dentists-go-too-far-north-carolina-board-of-dental-examiners-v-federal-trade-commission/

When Dentists Go Too Far: North Carolina Board of Dental Examiners v. Federal Trade Commission

Screen Shot 2015-03-17 at 12.25.17 PMhttp://www.forbes.com/sites/georgeleef/2015/03/04/eeoc-keeps-its-losing-streak-intact-reinforces-the-case-against-administrative-law/


The recent strike down of anticompetitive regulation in N.C. dental case opens the door to antitrust litigation against other state Regulatory Agencies such as Medical Boards.

The Federation of State Physician Health Programs has set up a “hidden” system of coercion and control using various methods (policy and moral entrepreneurship, changes in state medical practice acts and administrative procedure, misuse of health law, etc.) to create a system that lacks oversight and regulation. As a power unto themselves they are accountable to no one.

Although originally funded by medical societies and staffed by volunteer doctors in order to help sick colleagues and protect the public, any system can be subverted for profit and power, and these programs have been taken over by groups representing the multi-billion dollar drug and alcohol testing, assessment and treatment industry and become reservoirs of bad medicine and fraud. All manner of abuse can be hidden under a veil of benevolence. Although most are afraid to speak publicly under fear of punishment and retaliation (“swift and certain” consequences, summary suspension) I have herd from many many doctors in multiple states. Their stories are all the same.

In addition to misconduct related to the non-FDA laboratory developed tests (they themselves introduced into the market using a loophole that bypasses FDA approval) there are reports of coercion into unneeded evaluation and treatment at a couple dozen or so “PHP-approved” facilities under threat of loss of licensure.

Reports to a state PHP can be done anonymously with confidentiality guaranteed to the reporter. Any report will result in a meeting with the state PHP and if they feel a licensee is in need of an assessment they require it be done at a “PHP-approved” assessment center.

As non-profit tax exempt corporations, PHPs do not provide clinical assessments. They can only recommend assessments.  State Regulatory Agencies (Medical Boards, Nursing Boards, etc.) have accepted the PHPs requirements of limiting assessments to those approved by the PHP.   In fact many states mandate assessments to solely  “PHP-approved” assessment centers under threat of summary suspension of a professional license.

An Audit of the North Carolina PHP by State Auditor Beth Woods, however,  found financial conflicts-of-interest in the use of these predominantly out-of-state assessment facilities to which the N.C. PHP was referring and the state Medical Board was requiring.  Woods requested the qualitative indicators and quantitative measures used to  “approve” these assessment centers from the N.C. PHP but they were unable to produce any documentation showing any quality indicators or objective criteria existed!  The best response they could come up with was “informal” methods and “reputation.” The full audit can be seen here.

Imagine if the FDA gave this reply if  asked to provide the criteria used to “approve” medications or medical devices in the “FDA-approval” process!

Making matters even worse, the Medical Director of the N.C. PHP, Dr. Warren Pendergast was serving as President of their national organization, the FSPHP at the time of the audit.

The simple fact is no criteria exist.

A recent class action lawsuit in Eastern Michigan found this same pattern of referral to out-of-state assessment and treatment centers ( Marworth, Talbott, Hazelden. Promises,etc.)

State referrals to “PHP-approved” facilities has become a matter of public policy. Both the American Society of Addiction Medicine and the Federation of State Medical Boards have issued public policy statements stating that only “PHP-approved” centers be utilized by Regulatory Agencies in the assessment and treatment of their licensees.  Moreover, these policies specifically exclude “non-PHP-approved facilities and often involve a limited time-frame.  No choice, no appeal and no bartering.  Do it. Do it now and if you don’t suffer the consequences.

These public policy statements can be seen in the 2011 ASAM “Public Policy Statement on Coordination between Treatment Providers, Professionals Health Programs and Regulatory Agencies” and the 2011 FSMB “updated Policy on Physician Impairment.”  Many state Regulatory Agencies have strictly adhered to these policy recommendations.

What this means is that  states are mandating evaluations at  “PHP-approved” facilities even though there is no documentable or plausible reason for doing so.  No measurable criteria exist as to how the list of “approved” facilities were “approved” yet they have “cornered the market,” removed choice and created an imposed monopoly under threat of loss of professional licensure.

In reality no official “PHP-approved” list exists.  Neither does any objective published criteria for approving them.  At the same time state Regulatory Agencies and Boards are forcing evaluations on licensed professionals at these couple-dozen or so facilities.  They are excluding patient autonomy and choice violating the fundamental freedoms of the individual and informed consent.

All semblance of due process has been removed.  If  a plausible reason existed (i.e. they met some minimum standard of credentialing, quality or patient outcome) for referring to a proscribed list of assessment centers it could be arguably justified.  Without such criteria, and in light of the economic and ideological conflicts of interest involved, it is patently unjustifiable.

Even more disturbing is, as Drs. John Knight and J. Wesley Boyd (who collectively have more than 20 years experience as Associate Directors at the Massachusetts PHP, PHS, Inc.) pointed out in their 2012 paper published in the Journal of the American Society of Addiction Medicine,  many of these facilities are willing to “tailor” the diagnosis and recommendations of an evaluation to fit the wishes of the PHP.    “Tailoring” an assessment and recommendations to anything other than what the true data show is healthcare fraud.  It is, in fact,  the political abuse of psychiatry.

PHPs started out as “Physicians Health Programs” but many are transitioning to “Professionals Health Programs”  to widen the net.  For example in Michigan  and Florida the state PHP covers all health care practitioners from Acupuncturists to Veterinarians. PHPs have also entered non -healthcare employee assistance programs (EAPs) such as the aviation industry and the grand plan is expansion to  non-healthcare professions. They are doing this by claiming remarkable success rates and brandishing themselves as the “gold-standard” of substance abuse treatment.   Interestingly, the same individuals claiming how successful PHP programs are are the same individuals profiting from the drug and alcohol testing they introduced.  Anyone with any sort of license is at risk.

So whether you cut hair, teach, take care of patients or even drive a car they could be coming after you next and they don’t have to convince you of the validity and reliability of their services–they only need to convince those who regulate your license and, as we have seen, they are very accomplished at persuasion in this department.

And that is why we need more state audits of PHPs and Medical Boards.  The starting point is simple. Request from the state PHP and Board  a  list of “PHP-approved” facilities and the criteria by which they were approved. What should be a simple reply will undoubtedly not be as they will not be able to provide either.

Article 8

Antitrust litigation hasn’t disappeared, but rather changed its focus. Instead of targeting the great railroad empires of the late 19th century, today’s antitrust efforts focus on more minute industries, like dentistry.

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