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The American Board of Emergency Medicine (ABEM) spent more than a half a million dollars on its two board of directors meetings in fiscal year 2018-2019.

For its winter meeting, the organization flew about 30 board members and ABEM staff -- some accompanied by family members -- to Maui and lodged them for about a week at the luxury resort.

The total cost was $317,419, according to ABEM budget documents provided to 乌鸦传媒.

The board has held its winter meeting in Hawaii every year since at least 2003. It also holds summer meetings, usually on the U.S. mainland, at high-end resorts like the Ritz Carlton in Santa Barbara, California, the Coeur d'Alene Resort in Idaho, and the Montage Resort in Park City, Utah.

It spent $300,372 on its 2018 summer meeting in Santa Barbara.

Medical specialty boards have come under fire in recent years for their spending of physicians' hard-earned dollars, particularly when it comes to the controversial idea of "continuing certification" (formerly known as "maintenance of certification," or MOC) -- which brings in a substantial chunk of revenue for many boards, including ABEM, which has 38,500 diplomates.

Documents provided to 乌鸦传媒 offer an inside look at the finances of one of the 24 member boards that make up the American Board of Medical 乌鸦传媒 (ABMS). In some respect, they paint a portrait of a well-run business: one that brings in almost $19 million a year while sitting on nearly $40 million in reserves. But they also show an enterprise with generous pay for executives and staff, and where luxury travel is the norm.

It's all funded by practicing physicians who have little choice but to maintain their certification, else they won't be employed by hospitals or paid by insurers -- all despite a paucity of data that continuing certification programs make physicians better.

Losing Their Way?

When medical boards first launched about a century ago, they served a legitimate purpose of verifying physician competence, according to Paul Teirstein, MD, of the Scripps Clinic in La Jolla, California, who is an outspoken critic of MOC.

Board certification was initially a lifetime credential, though eventually periodic renewal became necessary. Taking that a step further, in the late 1990s, boards decided that the renewal process should include additional assessments, and MOC was born. MOC would be needed on top of already existing state requirements that doctors earn continuing medical education credits to keep their licenses.

"When the boards were started, they did so with the right intentions," Teirstein told 乌鸦传媒. "But things have changed. I think the boards have lost their way."

The started in 2014, when the American Board of Internal Medicine (ABIM) -- the largest board, governing about a quarter of all U.S. physicians -- attempted to tighten MOC requirements. Within a year, " and temporarily suspended some parts of their MOC.

Feeling the heat, ABMS member boards subsequently got together and appointed a "" to evaluate continuing certification requirements, releasing a . Among other recommendations, it encouraged boards to scrap big, onerous tests given every 10 years and instead offer quicker, more frequent assessments.

Many boards have indeed implemented that strategy. But instead of charging one high fee for a single big test each decade, costs of continuing certification have been annualized by some boards, including ABEM.

That means ABEM, for instance, can continue to make millions in revenue each year from continuing certification.

Flush With Cash

For the fiscal year that ended on June 30, 2019, ABEM reported $18.7 million in revenues, against $16.6 million in expenses, for a total margin of 11.2%, according to its .

In addition, the board sat on about $38 million in reserves as of April 30, 2019, according to documents shared with 乌鸦传媒.

While for-profit companies are often advised to keep 18 months' worth of operational expenses in reserve, ABEM's stash could last about 26 months, according to those documents.

An ABEM spokesperson said in a statement that the size of their reserves is "largely a consequence of the five-fold growth in the stock markets since 2007-2008" and that the organization has used the reserves "to avoid or minimize any increases in certification fees."

While those reserves are ABEM's largest asset by far, its total assets in 2019 were worth about $43.5 million, after depreciation was factored in. That figure included their $5.6-million office building, for which they carry no debt.

"That sounds like a for-profit company to me," said Westby Fisher, MD, a Chicago cardiologist who has also been a leading critic of continued certification. "They're making lots of money with little oversight as to how they spend their funds."

ABEM is also structured as a 501(c)6 instead of a 501(c)3, which lets the organization spend at will on lobbying, Fisher said.

Claire Topp, a partner in law firm Dorsey & Whitney's health, non-profits, and tax-exempt organizations practice group, said while 501(c)3 groups are permitted to undertake a minimal amount of lobbying, 501(c)6 organizations have no such limits.

"Even though there are charitable, educational, and scientific components to what medical specialty boards do, [the IRS] concluded that the advancement to the profession is too big to be able to hold on to 501(c)3 status," Topp told 乌鸦传媒.

ABEM said its 501(c)6 status was chosen when the organization was incorporated in 1976, and it "has not had a reason to change" that status. ABEM didn't note any lobbying expenses on its most recently filed 990, but aside from promoting specific pieces of legislation, nonprofits may also perform advocacy work aimed at creating an environment where legislation might be adopted, Topp added.

Overall, continuing certification brings in about half of ABEM's revenue, while initial certification for new resident graduates brings in about a third. In the fiscal year ending June 30, 2019, the board made $9.3 million from continuing certification, while initial certification brought in about $6 million.

For a newly minted emergency medicine physician, initial certification costs about $2,600. Continuing certification, which currently consists of the Lifelong Learning and Self Assessment and the ConCert exam, costs about $2,800 over a 10-year cycle. (As part of its changes to continuing certification, ABEM will begin transitioning to a new, 5-year testing interval this year, called MyEMCert. Diplomates will now pay an instead.)

The margins on continuing certification are high. According to ABEM budget documents, continuing certification was expected to bring in $7.3 million that year, and cost just $1.6 million to administer. Initial certification, on the other hand, would bring in $5.4 million but cost $4.7 million to administer.

Teirstein once conducted a similar analysis on the American Board of Radiology, which brought in $4 million per year from initial certification, but $10 million from continuing certification.

"With MOC, they become a $14-million company," Teirstein said. "The CEO of that board gets $750,000 per year. He couldn't get paid that much without MOC."

Executives and Staff Paid Well

ABEM's largest expense by far is payroll. In the fiscal year ended June 30, 2019, salaries and benefits cost $6.9 million, accounting for about 42% of total expenses, according to ABEM's Form 990. That form listed a total of 41 employees in calendar year 2018.

Earl Reisdorff, MD, who was appointed executive director of ABEM in 2010, made $549,930 in salary and bonus in 2019, which rose to $640,299 when including additional compensation such as retirement and benefits.

In 2019, the average practicing emergency physician made a little more than half of Reisdorff's total compensation: $377,921 in salary plus bonus, . (See 乌鸦传媒's infographic and comparing executive compensation with average physician pay.)

Other top earners that year included Melissa Barton, MD, director of medical affairs, at $269,846 (rising to $327,104 with additional compensation), and Susan Adsit, associate executive director, at $192,710 (rising to $265,892 with extras).

Topp said medical specialty boards seek out comparable data to determine reasonable compensation, and valuators aid in sorting through the data.

"It's an art; it's not a science," Topp said. "There's a lot that goes into what the right comparable is."

Though both 501(c)6 and 501(c)3 organizations are subject to rules that require executive compensation to be reasonable, board members at the latter may personally face penalties if they approve pay that is unreasonable, Topp said.

For 501(c)6 organizations, on the other hand, personal liability isn't at play, and while the organization could lose tax-exempt status over excessive salaries, it would be an "extreme remedy," she said.

ABEM said it benchmarks its executive director compensation to the 75th percentile of academic department chairs in emergency medicine, and that its director of medical affairs position is benchmarked against associate professor status.

Well-Heeled Travelers

ABEM spent $3.9 million in travel in the fiscal year ended June 30, 2019, according to its Form 990. That's about a quarter of its total expenses.

The $317,000 it spent on its 2019 winter meeting in Hawaii was a decrease from 2018, which was due to new director travel policies, according to internal documents. The 2018 winter meeting, at the , had a budget of $508,250 (the actual cost was not available).

Those new policies included capping individual directors' meals at $310 per day, not including gratuities. Prior to that, meal spending was unlimited, a source who asked to remain anonymous told 乌鸦传媒.

Prior to 2018, directors were also provided refundable first-class airline tickets for their travel, so they could either fly first-class or travel coach and use the remaining value to buy tickets for their family members, the source said.

"Should they be spending doctors' hard-earned money on meetings in Hawaii?" Teirstein said. "I'm going to suggest they do those meetings on Zoom."

During the pandemic, ABEM held its 2020 summer and 2021 winter board of directors meetings virtually. "However, there is value in holding meetings in person especially when setting the priorities and strategic direction for ABEM," the organization said in its statement to 乌鸦传媒. "As ABEM plans for the future, we are looking at our meeting structure."

While directors of medical boards aren't always compensated directly for their time, the wining-and-dining, perks, and networking make it worth their while, according to Marty Makary, MD, MPH, of Johns Hopkins University in Baltimore, and 乌鸦传媒's editor-in-chief.

"Board members are a mixed group," Makary said. "Historically, many selflessly give their time to contribute to the field and help young trainees. Today, some still do. But many now consider it political advancement for their career -- a form of currency whereby they create a network that could lead to other leadership opportunities in their field."

"When I was invited to be a board examiner, I was told by friends that one of the perks was a five-day, all-expense-paid trip to a resort, building lasting friendships with other doctors that could open up doors and be valuable for my future visibility in the specialty," Makary said. "I passed."

A Tax on Physicians?

Teirstein said the boards have long run a monopoly on physician certification, and therefore launched his own challenge to that a few years back, with the .

Instead of a formal continuing certification program, NBPAS only requires continuing medical education credits for continued certification.

The board has certified about 9,000 diplomates, signing on 138 hospitals and working to convince insurers to accept their credential.

Continuing certification, as it stands, is nothing more than a "tax" on hardworking doctors, Teirstein said.

"Physicians are under increasing financial duress due to increasing overhead costs, increasing malpractice insurance, and declining reimbursement," Makary said. "Physician pay is good, but they really are being squeezed."

"Senior doctors remember the days when you paid $100 to take a board exam, and it was a painless, one-time thing," he added. "Now, boards decided that [doctors] can do tests every 10 years and pay a lot more money. Boards have the upper hand. They can do this unilaterally and no one can really challenge them."

At the same time, the evidence base that continuing certification increases physician safety or quality isn't robust, Teirstein said.

Yet continuing certification programs stand to bring continued revenue to boards.

"Physicians are repeatedly told the purpose of certification, and continuous certification in particular, is to assure the competence of physicians," Fisher said. "These data suggest it is much more about maintaining the lavish lifestyles of the board leaders."

"Until we get full disclosure and accountability," he said, "I don't think physicians will want to continue to fund a system as broken as it currently is."

Cheryl Clark contributed reporting to this story.

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