Removing Barriers to Prevent and Treat Opioid Abuse and Dependence in Medicare

Comments for the Record

United States House of Representatives

Committee on Ways and Means

Health Subcommittee

Hearing on The Opioid Crisis:

Removing Barriers to Prevent and Treat 

Opioid Abuse and Dependence in Medicare

Tuesday, February 6, 2018, 3:00 PM

By Michael G. Bindner

Center for Fiscal Equity

Chairman Roskam and Ranking Member Levin, thank you for the opportunity to submit my comments on this topic. The hearing will discuss the ongoing opioid crisis, and the important role data, addiction prevention, and access to treatment play in addressing the crisis. The hearing will also examine possible legislative solutions to combat opioid abuse. I submit these comments as past health research data manager, prevention community leader, and a current recovered abuser and Medicare patient. As it does apply to this issue, I will repeat our four-part tax reform plan, which is as follows:

• A Value Added Tax (VAT) to fund domestic military spending and domestic discretionary spending with a rate between 10% and 13%, which makes sure very American pays something.
• Personal income surtaxes on joint and widowed filers with net annual incomes of $100,000 and single filers earning $50,000 per year to fund net interest payments, debt retirement and overseas and strategic military spending and other international spending, with graduated rates between 5% and 25% in either 5% or 10% increments.  Heirs would also pay taxes on distributions from estates, but not the assets themselves, with distributions from sales to a qualified ESOP continuing to be exempt.
• Employee contributions to Old Age and Survivors Insurance (OASI) with a lower income cap, which allows for lower payment levels to wealthier retirees without making bend points more progressive.
• A VAT-like Net Business Receipts Tax (NBRT), essentially a subtraction VAT with additional tax expenditures for family support,  health care and the private delivery of governmental services, to fund entitlement spending and replace income tax filing for most people (including people who file without paying), the corporate income tax, business tax filing through individual income taxes and the employer contribution to OASI, all payroll taxes for hospital insurance, disability insurance, unemployment insurance and survivors under age sixty.

The Ongoing Opioid Crisis

This national pandemic has been gaining steam for a long time. What was once the province of rural America and a few Doctors Feelgood has moved everywhere. Before Opioids, the recreational pill of choice was the Quaalude, which was before my time. It is the only drug war battle that could be won because there were few suppliers. That is not the case with opioids, which have old patents, new patents and suicidal hybrids that take life on a massive scale. This epidemic affects everyone, from workers with jobs and insured to poor and disabled people on Medicaid, both employed and not and Medicare beneficiaries, both disabled workers and mentally disabled recovering addicts and elderly who never thought they would become addicts, Indeed, the mentally ill former addicts have a much better chance of escaping addiction again because they know when to throw the pills away or they simply refuse them-(I have done both).

The Role of Data

Properly used, Medicare care providers can track pharmacy data in an Accountable Care Organization where everything is in house. If outside pharmacies are available, this becomes harder but not impossible using Pharmacy and Medicare databases. Paper prescriptions are, of course, easier to abuse and should be entered into any tracking system, even if the scrip is not filled automatically. A photocopier, scanner or electronic printer can do amazing things when multiplying pain pills for groups of people. Of course, pharmacy networks can be hacked and overseas pharmacies can be accessed by the Internet, where perfectly legal appearing abusive prescriptions can be had with a credit card. While stopping such trafficking is not the job of Medicare, it does impact the system when beneficiaries become addicted. Creating a cyber-crime unit in HHS or a separate medical crimes unit in Homeland Security is called for here.

The Role of Addiction Prevention

The question of gateway drugs does come up. Alcohol and Opioids have similar uptake patterns according to research reported in the book Beyond the Influence. Of course, opioids are their own gateway if prescribed too long. In prior centuries, Cannabis was used to detox both alcohol and opium addictions. While it is not recommended in most cases, the opioid crisis is not an excuse to resist the legalization of Cannabis for either medical or recreational use and for some, is a better solution for chronic pain. It is time to admit defeat in the culture war on this subject and explore this alternative, even if those who are already addicts probably cannot or will not use it.

I spent years directing community addition programs. They never kept me sober, prevented anyone from drinking and certainly did not prevent anyone who had an extended pain medication prescription from becoming an addict. They may be useful in helping people identify if they are at risk, but most children of alcoholics already know of the risks they have and drink anyway, becoming alcoholic if they are genetically destined to and not becoming alcoholic if not.

Addition prevention is more helpful in medical offices, where proper screening may stop people who use alcohol from becoming cross-addicted to both alcohol and benzodiazepines by combining together. Likewise, educating doctors and changing pain management regimens from 30 days to 30 hours would prevent addition, as well as research on both natural and synthesized cannaboids.

Access to Treatment

Access to both initial and continuing treatment is vital to both addition and mental health care, as addiction can often uncover pre-existing psychiatric conditions that drug and alcohol use was covering up. Even for non-alcoholics, once addiction has been turned on by opioids, the patient can never drink safely again and even moderate or heavy drinking previously will have to end, along with any medicinal effect it had.

For initial treatment, the question is not just access for willing patients, but mandated treatment for the unwilling. The liberalization of commitment laws in the 1970s has likely gone too far. Our first clue was mental patients, especially veterans, living on the street. Even when forced into treatment, taking a sober breath in a few days, treatment plan or no, resulted in release and resumption of the previous lifestyle. This is not freedom or health. State laws or one overarching federal standard must make it easier for families, police, doctors and social service agencies to begin mandatory treatment, with the outcome being assignment to medical care if required and housing beyond shelter space if not already possessed. While some will not need the latter, those who do, especially our nation’s seniors, disabled and veterans, should not be sent back to the cold.

Ongoing should be adequate. Medicaid will pay for a nurse practitioner to see a patient in a psychiatric rehabilitation program twice a month. Non-PRP patients are seen less often if their medication is stable. Affordable Care Act policies authorize fewer visits and Medicare provides for two visits a year, which is not enough even when stable. Talk therapy under Medicaid is weekly and includes any licensed professional. Medicare requires Social Workers and that requirement makes care less available. Stable patients may be seen once every few months, which is hardly effective for more than a brief check-in, especially if a patient is dual-diagnosed with addiction. The pool of allowable treatment professionals must be expanded so that nurse practitioners and licensed counselors can bill Medicare if more frequent visits are desired, with Doctors and Social Workers supervising treatment and proving occasional care, especially medication adjustments.

Early addiction after-care with an HMO (my experience) provided two sessions a week, going to one a week nearing discharge and self-paid sessions for the last few, which a sign of recovery. If relapse is detected during this period, the addiction specialist should be empowered (and the patient funded) to go back into treatment, possibly in a more intense setting than originally. The therapist should be similarly empowered, even with patients with long-term sobriety. Needless to say, Medicare should pay for all of it.

Legislative Solutions

Several proposals were provided above regarding data security, Internet prescription abuse, cannabis legalization, expanding the pool of practitioners under Medicare and the power to initially hospitalize and re-hospitalize addicts and the mentally ill. Freedom requires a clear head but it does not require being a culture warrior. Any so-called Freedom Caucus Member who uses that name should stop if they disagree with me and Drs. Ron and Rand Paul on the Cannabis issue.

Our remaining comments will be in regard to our tax plan.

Medicare is a Hydra, taking money from the Hospital Insurance Tax, the high income dividend and capital gains surtax, patient premiums and copayments and the general fund. Some of the reforms required will be cash intensive. Hospital Treatment will come out of HI and ACA/HI and the general fund. Aftercare will come from Part B or C, with some monies coming from the general fund, including three of every four premium dollars.

It is always important to note that the whole purpose of social insurance, including Medicare, is to prevent the imposition of unearned costs and payment of unearned benefits for not only the beneficiaries, but also their families.  Cuts which cause patients to pick up the slack favor richer patients, richer children and grandchildren, patients with larger families and families whose parents and grandparents are already deceased, given that the alternative is higher taxes on each working member.  Such cuts would be an undue burden on poorer retirees without savings, poor families, small families with fewer children or with surviving parents, grandparents and (to add insult to injury) in-laws.
Recent history shows what happens when benefit levels are cut too drastically.  Prior to the passage of Medicare Part D, provider cuts did take place in Medicare Advantage (as they have recently).  Utilization went down until the act made providers whole and went a bit too far the other way by adding bonuses (which were reversed in the Affordable Care Act).  There is a middle ground and the Subcommittee’s job is to find it and our job to help.


In our plan, funding Medicare has nothing to do with the Income Tax, so bullet two above can be disregarded. Likewise, we would repeal the Medicare and Affordable Care Act dividend and capital gains surtaxes targeted only at upper income taxpayers. Because the benefits are general, the taxation should be as well.

Bullet three on employer contributions to Social Security is also not affected by our proposal, which already moves the Medicare Hospital Insurance Tax paid by employees to the Net Business Receipts Tax/Subtraction VAT.

It could also be moved to Bullet One, the Value Added Tax taken on receipts (along with the Employer Contribution to Social Security), making that part of the tax border adjustable but at the cost of eliminating offsets that can be taken against the NBRT for providing direct insurance and care for employees and retirees, which would make the tax border non-adjustable (no zero rating). If the VAT is used, it would be considerably higher than the 13% proposed by either this Center or Michael Graetz. Just shifting taxes without accounting for ACA/HI inclusion would add 9.3% of income, making the VAT visible for 22.3% of every transaction. The VAT will fund any enhanced Internet law enforcement efforts, however, unless housed in HHS. VAT funding would also mean all savings must come from government enforcement rather than employer/taxpayer efficiency, which would put cost payment and cost cutting in the same hands.

Again, the Net Business Receipts Tax, Bullet Four, proposes to combine all employer income taxes, payroll taxes, ACA taxes and the HI payroll tax. It will include offsets, including an enhanced child tax credit and the health insurance exclusion. It will fund all social insurance costs, including those with state revenue participation, including education and we expect states to fund their share of this tax with matching taxes and the same VAT base.

One of the options is a personal retirement account holding employer voting stock and an insurance fund of such companies (a third to insurance). We believe such employee-owned firms will take bolder cost cutting measures without losing compassion for their retiree/shareholders who could even by-pass Medicare and be funded by an internal plan which must be at least as generous. Note that employee-owned firms could also pay all Part B and D premiums. More information on this aspect is available in our previous comments to the Committee.

The NBRT can provide an incentive for cost savings if we allow employers to offer services privately to both employees and retirees in exchange for a substantial tax benefit, either by providing insurance or hiring health care workers directly and building their own facilities. Employers who fund catastrophic care or operate nursing care facilities would get an even higher benefit, with the proviso that any care so provided be superior to the care available through Medicaid. Making employers responsible for most costs and for all cost savings allows them to use some market power to get lower rates, but no so much that the free market is destroyed.

This proposal is probably the most promising way to arrest health care costs from their current upward spiral – as employers who would be financially responsible for this care through taxes would have a real incentive to limit spending in a way that individual taxpayers simply do not have the means or incentive to exercise. While not all employers would participate, those who do would dramatically alter the market. In addition, a kind of beneficiary exchange could be established so that participating employers might trade credits for the funding of former employees who retired elsewhere, so that no one must pay unduly for the medical costs of workers who spent the majority of their careers in the service of other employers.

Let me also comment on Senator Sanders proposal for Medicare for All. The reality is that Medicare is not as generous as younger people assume and that the Senator’s proposal would eliminate those cost sharing features of Medicare, making it Medicaid for all (but with higher doctor reimbursements) and then replacing both Affordable Care Act and Health Insurance Exclusion supported policies with the expanding program. Of course, like Medicare and Medicaid, it will be impossible to do without using the Affordable Care Act’s Accountable Care Organizations. In other words, health insurance companies are going nowhere nor will all cost control efforts be abandoned. We like our proposal better, which is more cooperative socialist than democratic socialist. In either case, however, something like the Net Business Receipts Tax/Subtraction VAT in Bullet Four will be necessary, especially if we are serious about fighting the Opioid Crisis.

Thank you for the opportunity to address the committee.  We are, of course, available for direct testimony or to answer questions by members and staff.