Author + information
- George A Beller, MD, FACC, President, American College of Cardiology*
- ↵*Reprint requests and correspondence: George Beller, MD, FACC, Cardiovascular Division, Department of Internal Medicine, Health System, University of Virginia, P.O. Box 800158, Health Sciences Center, Charlottesville, Virginia 22908-0158
For more than 50 years, the American College of Cardiology (ACC) has been committed to education, advocacy, and quality care. In each of these areas, the College has tailored its activities and efforts to the needs of its members and to the demands of the health care environment. In terms of advocacy, however, the College differs from medical societies like the American Academy of Orthopaedic Surgeons, the American Society of Anesthesiologists, and the American College of Emergency Physicians in one key respect: The ACC doesn’t yet have a corporate structure that maximizes its advocacy potential.
Now, the College is planning to change that. A modification of the College’s corporate structure to include a 501(c)(6) entity with its 501(c)(3) entity would allow it, under Internal Revenue Service (IRS) regulations, to maximize its ability to advocate on behalf of its members and their patients. Such a change has been approved by the College’s Board of Trustees and will be put to a vote of the membership in March. This change would allow the ACC to join the ranks of the majority of medical societies (see Table 1). The decision to form a 501(c)(6)—made largely in response to new demands on members by managed care, government regulation, and other changes in the health care arena—would allow the College to redouble its advocacy efforts with legislators, regulators, and payers while maintaining its central mission of providing education to members and patients and promoting quality of care.
A parallel experience
A great deal can be learned by examining the experiences of others, although, of course, the ACC must base its decisions on the specific needs of cardiovascular specialists and cardiovascular patients. Nonetheless, the experience of the American Academy of Orthopaedic Surgeons has provided a model for the College, both in terms of process and potential. The two medical societies have much in common, including longstanding commitment to the optimal care of their members’ patients. Established in 1933, the Academy has always made education its top priority. As the health care marketplace began to change, the Academy’s Board started worrying that its advocacy efforts were no longer enough to represent its members on Capitol Hill and in state and local politics.
“Medical societies were created to educate physicians but have been dragged against their will into the public arena,” said William W. Tipton, Jr., MD, the Academy’s executive vice president. “While physicians weren’t looking, Congress was painting targets on our back. We had a choice: We could be passive and really get into trouble, or we could play the game as others have dictated that it needs to be played.”
For 25 years, the Academy’s Board deliberated over whether the time had come to create a 501(c)(6). Like the ACC, the Academy had been incorporated as a 501(c)(3) nonprofit organization devoted exclusively to charitable, educational, and scientific endeavors. In exchange for granting such organizations tax-exempt status, the IRS prohibits them from getting involved in political campaigns or fundraising and limits the amount of money they can spend on lobbying.
For several years, the Academy had been engaged in lobbying and advocacy efforts designed to defend orthopaedic surgeons’ ability to provide high-quality care and sustain their practices. A few years ago, however, the Academy realized it was moving close to its legal limit on lobbying activities. As a co-founder, with the ACC, of the Practice Expense Coalition, the Academy was pooling its funds with other coalition members to lobby Congress on the issue. When it was suggested that the IRS could look at a coalition’s total spending rather than organizations’ individual contributions, the Academy’s Board decided the time had come to create a 501(c)(6), thereby protecting itself from possible IRS censure and opening the option of expanding its advocacy efforts.
In 1996, the Academy’s members voted at their annual business meeting to authorize the creation of a 501(c)(6) corporate structure whenever the Board felt it was appropriate. That time came in 1997, when the Board unanimously agreed to create the organization that became the American Association of Orthopaedic Surgeons, which would advocate on behalf of patients and the profession. The Association acts as a trade organization to promote members’ professionals interests. As such, it can take on significantly more advocacy and lobbying efforts consistent with IRS rules. The Academy’s members approved the change in 1999.
“Our Board of Directors realized that our tax status as a 501(c)(3) nonprofit medical society might be in jeopardy,” explained Dr. Tipton. “We have always been very active in advocacy work, and that hasn’t really changed. Now we don’t have to worry about it, and we can be more aggressive.”
A small number of members worried that the change in corporate structure would undermine the Academy’s primary mission of providing education to musculoskeletal specialists. A major expansion in international education efforts that took place during the Association’s creation helped to reassure those members that the emphasis on education would never be lost. Today, even staff composition reflects the Academy’s priorities: The Academy has 225 employees, and the Association has only five. Furthermore, more than 75% of the Academy’s budget is devoted to educational activities.
The dual structure has led to many achievements that would not have been possible before. Having 501(c)(6) status, for example, allowed the Association to create a political action committee (PAC) to finance its advocacy efforts. Before the change, orthopaedic surgeons had to make do with a PAC that wasn’t affiliated with the Academy. When the 501(c)(6) was formed, that PAC agreed to dissolve and give its money to an official Association PAC. The new PAC already has a half-million dollars, double the amount it had before.
Those funds have allowed the Association to have a bigger presence on the political scene than the Academy was able to have. Before the change, an independent contractor represented orthopaedic surgeons’ interests on Capitol Hill. Now there is a full-fledged Washington, DC, office with four full-time lobbyists. And for the first time, Academy leaders were able to attend the Democratic and Republican conventions to ensure that orthopaedic surgeons’ concerns were heard.
Internally, there have been a few changes as well. Because IRS rules allow money to freely pass from 501(c)(6) organizations to 501(c)(3)s but the rules restrict the flow of money the other way around, for example, all income flows through the Association. Accounting procedures have become a bit more complicated because the Academy and the Association have to keep track of their expenses separately. Adding a PAC solicitation to a mailing, for instance, transforms it into an Association mailing.
From members’ point of view, however, not much has changed, even though they are now technically members of the Association rather than the Academy. Although the two organizations have separate bylaws reflecting one organization’s emphasis on health policy and the other’s on education, research, and communication, the same Board of Directors governs both organizations. Both organizations follow a single strategic plan that emphasizes education. The two organizations even share the same acronym, AAOS. Throughout the process, the Academy’s goal was to make the two organizations appear “seamless.” The Academy met that goal so well that S. Terry Canale, MD, the current president of the AAOS, used his column in a recent issue of the Academy’s newsletter to remind members of the Association’s existence.
The new tax status is working so well for the orthopaedic surgeons that Dr. Tipton recommends that all medical societies consider this route. “I can’t imagine a medical society not at least considering having both a 501(c)(3) and a 501(c)(6),” he said.
The ACC proposal
Now the College hopes to take those words to heart. The ACC Board of Trustees will ask the IRS for permission to create a 501(c)(6) organization to promote the interests of cardiovascular specialists. Members will vote on the proposal at the ACC Annual Scientific Session in Orlando, Florida, in March. Once they give their assent, the College will establish the new organizational structure in the spring of 2001 and begin operations the following winter.
The proposal grew out of the findings of the College’s Vital Signssurvey efforts last year. Survey respondents revealed that reimbursement problems, Health Care Financing Administration compliance issues, and dwindling autonomy due to the prevalence of managed care are making it more difficult than ever before for them to provide the high-quality care their patients deserve. In fact, increased advocacy was their highest priority for the College. They asked the College to be more aggressive at the local and national levels, to better support ACC chapters’ advocacy efforts, and to educate the public about the importance of the specialty of cardiovascular medicine. Due to IRS limitations on the funds that 501(c)(3) organizations can spend on advocacy, creating a 501(c)(6) is the only way for the ACC to achieve those goals.
Having a 501(c)(6) organization will also give the College the option of forming a PAC if it decides one is needed. According to Vital Signs, 86% of members think the College should take advantage of this powerful tool for gaining access to lawmakers. Three-quarters of respondents said they would be willing to contribute to such a fund.
Creating a 501(c)(6) would not change the College’s relationship with its members. On a day-to-day basis, members would see few differences. The new advocacy-focused arm of the College, the 501(c)(6), would assume the American College of Cardiology name and become the “umbrella” organization, while the rest of the organization, still focused on education and quality of care, would become the American College of Cardiology Foundation.
Just as the orthopaedists achieved a “seamless” relationship between their Academy and their Association, the ACC and its Foundation would technically be separate entities. The same Board of Trustees and Board of Governors would govern both organizations. More important, the College’s emphasis on educating cardiovascular specialists will always remain its top priority, and the bulk of the budget will continue to go toward that end.
This proposal to change the College’s corporate structure is just the latest sign of the College’s commitment to advocating for its members and their patients. By giving members a better chance to make their voices heard, the new organizational structure will help fulfill the College’s ultimate goal of fostering optimal cardiovascular care.
- American College of Cardiology