The San Francisco Examiner - February 12, 2000
Ulysses Torassa, Examiner Medical Writer

The clinic, with a devoted following of 1,500 patients and based at the Davies medical campus, became the victim of a dispute with Medicare, as well as of larger forces that are making practicing medicine more difficult.

Dr. Jon Kaiser said he had to let go of 12 staff members and would instead operate as a solo practitioner, seeing only about 200 or 300 patients who could pay for the visits themselves.

"I have been effectively forced out of the system," he said Friday.

Kaiser is the author of two popular books on HIV care and specializes in using a combination of traditional Western medicine and alternative therapies such as acupuncture, nutrition counseling and massage, to care for patients with serious illnesses.

He is also known for spending more than the average amount of time with patients on each visit. The center, just over 2 years old, had racked up $325,000 in start-up costs and operating debt but says it was beginning to the turn the corner when Medicare auditors demanded he repay $127,000.

"It's devastating," said Michael Dougherty, an HIV-positive patient who tried to raise private donations to keep the center open. "I'm never going to be able to find the kind of health care that I got with Jon. He gives you more than the 10 minutes you usually get, and he not only looks at the body, but looks at your soul as well, and treats the whole person. It's just so hard to find that kind of health care."

Tried to save clinic

Dougherty and others had established a trust fund to try to raise enough to stave off Medicare's threat to cut off all further payments, which account for half the center's revenue. Kaiser had said if the money was raised, he would convert the clinic into a nonprofit organization with a board of directors.

By the end of this week, however, they were able to collect just over $9,000. Donors will be given the choice of getting their money back or contributing it to the staff's final paycheck.

"I was hoping that someone in the community or some number of people in the community who could afford to step in, would," Kaiser said. "You could say I am disappointed."

Kaiser's troubles began more than two years ago when a for-profit company that ran the practice he belonged to suddenly pulled out, leaving him to scramble to assemble a clinic from scratch with 48 hours' notice.

The newly organized Wellness Center followed the former company's billing practices, Kaiser said. When he later learned that it did not include enough documentation to satisfy Medicare's regulations, he changed the system.

Shortly afterward, auditors arrived to sample charts and failed to find enough justification for $30,000 in visits. Using a formula to extrapolate to all patients, auditors claimed Kaiser owed $138,000.

Reams of paperwork

After submitting reams of paperwork to dispute and explain his situation, a final bill arrived in December from Medicare for $127,000, due in full by Jan. 7. He could appeal, but the appeals would take months to schedule, and all of the money had to be paid first. If not, all of his Medicare reimbursements would be cut off.

After U.S. Rep. Nancy Pelosi, D-San Francisco, intervened, Medicare agreed to extend the deadline a few weeks and to speed Kaiser's appeal. He spent two days last week presenting evidence to a hearing officer, but won't know the outcome for 60 days.

Meanwhile, the clinic was forced to shut its doors because Medicare has stopped payments.

Kaiser says the hearing, which included testimony from patients, went well. "I think the crime is that the penalty was demanded before the trial, and if we had the hearing first, prior to any penalty, there is a good chance that the amount that the government eventually requested would have been affordable and all of this could have been avoided," he said.

Mitchell Katz, The City's health director and an AIDS doctor himself, says he is sympathetic to Kaiser's situation.

"In some ways, the more conscientious the physician and the more he or she spends time with patients, the more difficult it is to make ends meet," Katz said. "My overall sense is that is what has happened with Dr. Kaiser."

Health insurers squeeze

While the Medicare dispute became the final blow, Katz and Kaiser agreed that the squeeze put on practitioners from health insurers generally was the larger culprit.

"People with HIV tend to have more complicated illnesses, but the capitated reimbursement is the same," Katz said. "If you are employed with insurance, your doctor is receiving a set amount per capita, whether you go or not.

"My sense is if it had been possible to make ends meet providing outpatient care, then he would have had a reserve to deal with the Medicare auditing exceptions."

Kaiser's HIV patients will be able to get care at San Francisco General Hospital, which runs a well-regarded outpatient HIV clinic, Katz said. Those with resources to pay up front can continue to see him. They can then submit forms to their insurance company for reimbursement, but Kaiser said he was not sure whether Medicare patients would have that option.

"I can't afford to pay a billing service, and I can't afford to play the game anymore," Kaiser said. "The insurance companies either hold onto your money for 90 days or refuse to pay for whatever reason they come up with, and you're stuck."
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