[T]he Senate Finance Committee approved legislation last week that would require health care providers to be paid the same professional fees whether they are in independent practices or employed by a hospital or group practice.
Independent practices are “becoming an endangered species,” said Sen. Tim Ashe, D/P-Chittenden, Senate Finance chairman, in an interview Monday. He’s pushing the so-called “provider parity” language because when independent practices are “gobbled up by the academic medical centers, it has the end result of increasing costs to the health care system without adding any additional value,” he said.
The number of full-time physician equivalents employed by Vermont’s hospitals grew 22 percent between 2007 and 2012, from 947 to 1,207, according to figures from the Green Mountain Care Board.
Professional fees are the portion of medical payments from insurers, government programs, or in the case of the uninsured, individuals, that compensate providers for their time. The parity language would only apply to commercial health plans. Medicaid doesn’t make differential payments based on whether a physician is employed or independent, and Medicare differential payments are baked into the program’s broader compensation of providers.
Blue Cross Blue Shield of Vermont, the state’s largest health insurer, pays a doctor with an independent practice in Burlington $42 for an electrocardiogram — a test that checks for problems with the electrical activity of the heart — versus $63 for an electrocardiogram from a physician employed by the University of Vermont Medical Center, according to information published on its website.
A Shumlin administration analysis of primary care practices in the Blueprint for Health managed care program found that practices affiliated with academic medical centers receive the highest professional fees for the 10 most common procedures billed through that program.
Practices affiliated with other hospitals or Federally Qualified Health Centers actually receive lower professional fees than independent doctors, according to that analysis.
Vermont’s only academic medical center is the University of Vermont Medical Center, which is part of a network that also includes Central Vermont Medical Center in Berlin. Dartmouth-Hitchcock Medical Center in Lebanon, New Hampshire, serves many Vermonters and employs physicians in the state.
A Green Mountain Care Board study on price variation found that market forces play a large role in the payment disparities.
That analysis found that the University of Vermont Medical Center, as a “dominant player” in the region, commands roughly equal payments from private insurers, while independent practices are relegated to being “price takers” in negotiations with the same insurers.
The provider parity language in the Senate bill directs health plans offered in Vermont to adjust their reimbursements starting in 2017 to compensate independent and hospital-employed physicians equally without increasing premiums.
Ashe did not say whether he expects health plans to reduce payments to academic medical centers or increase them for independent providers and others, noting that it could be either and might vary depending on the service.
The Vermont Association of Hospitals and Health Systems said in a statement that “this specific question belongs in the larger payment reform discussion about how we compensate providers, from a system based on quantity to a system based on quality of care.”
The hospital trade group would prefer the approach adopted by the House in its health care bill, which calls on the Green Mountain Care Board to consider provider parity in payment reforms it is expected to implement. A Shumlin administration official said that’s the approach they prefer as well.
“It’s something that needs to be looked at in the overall system,” said Robin Lunge, director of Health Care Reform, “Anything that has grown up over time organically needs to be re-examined to figure out if that makes sense or if we need to find a new way going forward.”
Ashe acknowledged that the need for parity in professional fees could be eclipsed by system-wide health reforms the state is pursuing that seek to compensate providers based on patient outcomes, instead of paying for each service that’s delivered.
However, it’s not clear how quickly the state will make that transition, Ashe said, and, in the meantime, “the independent practitioners are going extinct. I don’t want to have a solution when they’re gone.”
The provider parity language is in S.135, a health policy bill that “advances a few important health care policies without posing as something it’s not, which is a dramatic health reform bill,” Ashe said.
Many of its provisions are focused on setting the stage for the state’s transition to new payment models by expanding the power and authority of the Green Mountain Care Board, as well as calling for related study reports from the board and administration.
Some provisions mirror language in an omnibus House health care package that cleared the lower chamber last Friday. The House used a Senate bill S.139 to advance the $12 million package it supports. That will likely go to a conference committee as it deviates greatly from the Senate-passed version.
Ashe said the Senate will either look to tack provisions from S.135 onto S.139 during conference, or it may try to pass S.135 on its own. S.135 is now before the Senate Appropriations Committee.
Correction: An earlier version of this article misstated the relationship between the University of Vermont Medical Center and Central Vermont Medical Center.
