ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD 1206 Stamford Road Certified Mail Charles H. Percy ATTENTION: Mr. Alan Mertz I am enclosing the balance of my statement from the Senate Subcommittee hearing held on 12 April 1984. The topic was the PHS Scholarship program. I request a complete copy of the hearing transcript for my files. By a letter dated April 11, 1983, you were provided information on 74 claims, involving 71 debtors, on matters referred to this Department by the Public Health Service on defaulted debts under the National Health Service Corp Scholarship Program since fiscal year 1981. I will be happy to respond to your questions concerning these referrals. By way of a brief summary, 27 of the claims, involving 25 debtors, have been taken to judgment; two have taken an appeal, one from a court of Claims judgment and the other from a District Court judgment. of the remaining 47 claims, involving 46 debtors, 18 are in the litigative or negotiation process, 12 more are in that posture but are making payments and 17 have been returned to the Public Health Service for various reasons, including payment in full of judgments or compromises. We have attached that letter to this testimony, and have also attached other statistical information which should provide you with additional perspective on our accomplishments in this area of debt collection. Having provided you with that background, I will be happy to respond to specific questions in this area. Kemerer: Continuing Testimony 2 12 April 1984 4) lastly you castigate me for proposing to spend $2,000 on a For the record, this Kangaroo Court was made possible by premediated collusion with PHS officials, notably Dr. Martin and Mr. Brown. Your aide, Mr. Mertz, called on 6 April 1984 and offered me the opportunity to testify with respect to why so many people are in default. Prior to this, on 28 Mar 1984, I wrote Mr. Brown a letter requesting complete, accurate accounting of my debt incl ding interest and penalties because I wanted to settle. On 2 Apr 1984 my wife called him to make an appointment for him to see me as soon as possible to settle this debt. He was unable to see me until 10 Apr 84 at 1430 h. I wanted an appointment early in the day so that any typing or last minute comuptations could be performed. I came with checkbook and calculator and expected to leave with a signed agreement having made the first payment. Despite 8 days notice, Mr. Brown did not even have my file in his office, nor was it readily accessible to him. I reiterated my desire to settle this debt that day and waited for an hour while he was supposedly preparing the draft. After an hour he said it would be impossible to complete the ageement that day, but that it would be done first thing in the morning. One of his aides called me at 1630 h yesterday (Wed) to say this document still was not ready. So the trap was set on your sting operation and all systems were go for your Kangaroo Court. Had been allowed to sign an agreement and begin repayment you would not have had your sport today. Sir, you owe me an apology, for you have grievously harmed my reputation. This display was great theater and could conceivably cost me a job whose contract is under preparation and prevent me from finding any substitute. I believe you are clever enough to realize the adverse effect this could have on my ability to repay -- you may have killed the goose that laid the golden egg. me. Your Kangaroo Court epitimizes the shabby treatment which the PHS has accorded Never have they responded to specific questions nor shown any willingness to sit with me face to face and work out an agreement. They have always hidden behind bureaucratic barriers, saying "that is not my department". It's amazing how compartmentalized a really simple problem has become in the federal bureaucracy. I came to your hearing today to explain the terribly adverse, devastating effect the manner in which the scholarship office deals with many receipients has had on their lives. The issue is more complex than "pay up now", but you, Sir, have badgered me and not allowed me to speak. Perhaps now you will listen. Kemerer: Continuing Testimony 3 12 April 1984 I, for one, have never sought to avoid my PHS obligation. Perhaps i have been placed here for public ridicule because of my inherent honesty and decency. I have not skipped town nor avoided contact with the PHS. In fact Dr. Martin feels that I've had too much contact. Even before I was graduated from medical school, I approached the PHS with regard to a deferment for a radiology residency. At that time I was told to file an appeal with the Secretary of OHHS for deferment. Over the next year many other specialties, even Emergency Medicine, the antithesis of Primary Care, were deferred. Not Radiology. Yet modern radiology is the most cost-effective specialty, and the government has a marginal interest in reducing the cost of health care. Out of context you claim I am equating myself with the various frauds and cheats who plague the federal government. Perhaps the analogy is beyond a politician's keen. Simply stated, if the government is willing to ignore outright fraud, graft and profiteering, why is it so vindictive when it comes to settling honest differences of opinion between honorable people? The fact that 1700 physicians, approximately 23% of all recipients, are in default shou suggest that something is terribly amiss with the program. That level of default would not even be predicted if the grants had been given to politicians. The simple reason for this rate is the inflexibility of the PHS for any reasonable accomodation, either in placement or repayment. The full force and fury of the US government has been focused on a few impoverished physicians. You, sir, examine salaries attained after several years of practice post residency. You conveniently ignore the absence of salary during medical school, the substandard salary during residency and a salary which is approximately that of other highly-trained professionals of similar age for example, executive level civil servants in the early years of practice when these sums must be repaid. PHS recipients are indeed impoverished. No one in his right mind would sign such an adverse contract with treble damages and maximal interest rates unless he had no other alternative. More than half of my class spent summer vacation in Europe or Israel and winter vacation in Colorado or Switzerland. I spent mine working for extra money. Now, after 20 years of working more than 100 hours per week, a PhD in a field overcrowded by poor government planning, a change of career into another profession, recently overcrowded by poor government planning, you ask that I pay a large, but yet unspecified sum, post haste. Major problems exist in the administration of the scholarship program. 1) misguided personnel policies with respect to scholarship recipients Regarding the first catagory, every shcolarship recipient I know, regardless of payback status, is displeased with the rough-shod treatment accorded him or her. Horror stories abound, such as that of Dr. Eshelman. Designated health manpower shortage areas are constantly changing, often a recipient is lead to believe until the very last minute that he will serve in the location of his Kemerer: Continuing Testimony 4 12 April 1984 choice, only to find himself across country, away from wife and children. The policy of the scholarship office forces people into default. Default generates money for the program which can be used to support other recipients in the National Health Service Corps. Several years ago the previous secretary stated that it cost $100,000 annually to place a scholarship recipient in the field. In addition the PHS personnel policies toward recipients are a throwback to the '50s. Modern day personnel policies require the involvement of employees in the decision-making process. This is true even of factory workers, but even more necessary when dealing with more highly educated people. For instance, nurses would revolt if treated with such disrespect. Even the Army has stopped reading the Articles of War on a weekly basis to enforce discipline. If there exists genuine concern about the high default rate, a more modern approach than the club would be useful in dealing with scholarship obligates. Fewer would be in default and those in default would begin payback earlier. One of the most ingratiating aspects is bureaucratic doublespeak. Direct questions are answered infrequently and when answered, the reply is usually disingenious. The initial contract which I signed with the PHS, a contract which you, Senator Percy, have failed to acknowledge several times today, allowed repayment of obligated service via training in a PHS facility. Recipients prior to my year (1977) were allowed to repay 2 years of obligated service in this was allowed 1 year since the program was being phased out, and the new scholarship program with primary care emphasis would begin 1978-79. Clearly, receiving post-graduate training in a PHS facility had nothing to do with service in a health manpower designated shortage area. manner. My request to repay 1 year of obligated service in a fellowship program at NIH was rejected. In the initial telephone rejection, NIH was disallowed because it was not a PHS facility. "What then is it," I asked "since the sign in front of the campus says 'Public Health Service' as does the stationery." I was told "NIH is a facilty of the Public Health Service, not a Public Health Service facility." I must admit that this line of reasoning left me cold and totally unimpressed with the prep school of the bureaucrat who made the statement. Later, Mr. Joseph Brown in a letter of 3 Nov 1983 stated, "your contractural agreement when you accepted scholarship support was to serve in the full-time clinical practice of your profession in a Health Manpower Shortage Area (HMSA)... The NIH is not a designated HMSA." All so true with respect to the second contract, but totally false with respect to the initial contract. The second PHS Scholarship Law as stated in 42 CFR 62.12 provides for determination of Waiver of Service and Financial Obligation based upon extreme hardship and against equity and good conscience by the Secretary of DHHS. I had not realized that Dr. Martin had become a cabinet officer. When the Waiver was rejected I inquired about a higher appeal and was told to submit any new facts to this same appeal board headed by Dr. Martin, who has made his personal disdain for me all too apparent by private statements made to me today witnessed by my wife. The accepted practice is for a judge to disqualify himself from a case when he is biased against one of the parties. The PHS goes one better by |