[O]ne of Vermont’s major health insurance companies is calling on regulators to reduce what the state’s two largest hospitals charge for services.
MVP HealthCare, which is based in New York, says the University of Vermont Medical Center charges the insurance company substantially more than similar academic hospitals in other states do.
MVP is recommending that UVM Medical Center use guidance from the U.S. Centers for Medicare and Medicaid Service to lower its prices. The insurer also wants the network to lower what its affiliated doctors’ offices charge by 23 percent in both 2017 and 2018.
MVP also says Rutland Regional Medical Center’s hospital-affiliated doctors are making more money than they would if the hospital followed federal guidance. The insurer recommends that regulators at the Green Mountain Care Board lower those prices.
MVP submitted its recommendations to the board July 1 in accordance with Act 54, the health care law from 2015. The law required MVP and Blue Cross Blue Shield of Vermont to recommend how the state could make prices paid to hospitals versus independent doctors more equitable.
Throughout the nation’s health care industry, insurance companies reimburse hospitals more than they do independent doctors for the same services. Additionally, if a hospital buys an independent practice, the doctor’s office can remain in the same building but get paid the hospital-level prices for the same services.
In Vermont, Sen. Tim Ashe, D/P-Chittenden, spearheaded the section of Act 54 that raised questions about inequities. Ashe said he thought doctors should be paid the same amount for the same services regardless of where they work, and he said doctors should be able to maintain independent practices if they want.
“Two years ago we were losing independent docs pretty consistently, and we clearly had reimbursement schedules which were far from equitable,” Ashe said. He said the law “serves as more of a rallying cry to the Green Mountain Care Board to sort these things out.”
Blue Cross, which covers 70 percent of Vermont’s commercial insurance market, has a community fee schedule and an academic medical center physician fee schedule. The insurance company does not disclose to journalists how much it pays doctors, citing competitive concerns.
According to data compiled by HealthFirst, an organization of independent doctors, Blue Cross paid an independent physician $78 for a 15-minute office visit in 2014, but paid a practice affiliated with the University of Vermont Medical Center $177 for the same service.
Blue Cross also submitted recommendations to the Green Mountain Care Board on July 1 under Act 54. The insurer suggested the board approve a new fee schedule that follows federal guidelines and includes smaller price differentials on pay to hospital-affiliated doctors versus independent doctors.
However, even with that plan, Blue Cross said several factors could get in the way of lowering prices for physicians affiliated with UVM. One of those factors is pending implementation of the all-payer model — which is designed to do away with the current system of pricing and instead give administrative organizations monthly stipends for caring for patients.
Cory Gustafson, the spokesperson for Blue Cross, said the insurer is sensitive to Vermonters’ concerns about the price of health care, but he said the insurer filed the report in order to follow the law, not to make a political point.
“Would our members see lower premiums if UVMMC charged less? Yes,” Gustafson said. “But can UVMMC charge less and still provide the adequate access and quality? Well, that’s for the Green Mountain Care Board to decide.”
Rutland Regional Medical Center declined to comment for this story.
The UVM Medical Center said: “We need to study these reports, and then we look forward to being part of the conversation as the Green Mountain Care Board decides how to implement them. Our top priority is providing high quality care that patients can afford.”
During the upcoming hospital budget process, the UVM Medical Center says it will ask for a 3 percent increase in how much it charges insurers, the lowest increase in recent history. The hospital says it supports price transparency in the medical field.
