Health Care

Independent doctors call reimbursement plan a ‘shell game’

UVM Medical Center
Doctors employed by academic hospitals like the UVM Medical Center in Burlington generally are paid more by insurers than are independent doctors. Photo courtesy of UVM
The chief medical officer for an independent practice organization says it’s possible to lower prices paid to the University of Vermont Medical Center by 3 percent and use that money to increase pay to independent doctors by 25 percent.

Dr. Paul Reiss, of HealthFirst, said that shift would go a long way toward pay parity for independent doctors, who say they’re paid as little as a third of what doctors employed by academic medical centers get for the same services.

He made the comments Friday at a meeting of the Legislature’s Health Reform Oversight Committee. The panel was seeking input on plans submitted under Act 54 of 2015, which told insurance companies and the Green Mountain Care Board to find a way to pay doctors more equitably.

As a general rule, academic medical centers across the nation are paid more money by insurance companies than independent doctors for providing the same services. Some hospitals also charge so-called facility fees in addition to what they charge for the doctor’s time.

In July, in accordance with Act 54, MVP Health Care recommended that the board lower what the UVM Medical Center charges. MVP said the hospital charges substantially more than what similar academic medical centers charge in New York state.

Blue Cross Blue Shield of Vermont recommended a gradual decrease in fees for office visits. However, the insurer said hospitals might then seek to increase fees in other areas to reach whatever patient care revenue target the Green Mountain Care Board sets for them that year.

Amy Cooper
Amy Cooper is executive director of HealthFirst. File photo by Erin Mansfield/VTDigger

Now that the two major insurance companies operating in Vermont have submitted reimbursement plans, the board can accept, modify or reject the plans. The law then directs the board to require that the UVM Medical Center accept the new reimbursement plans. The board must report to the Legislature on its progress by Dec. 1.

“Blue Cross Blue Shield we believe has presented a plan that basically maintains the status quo,” said Amy Cooper, the executive director of HealthFirst, told the Health Reform Oversight Committee. “We think that plan needs to go back to the drawing board the way it is now.”

“Blue Cross Blue Shield came back with what essentially amounts to a shell game of reducing the physician fee schedule at the academic medical center only to transfer those dollars over to the facility and hospital fee schedule,” Cooper said.

She added: “Thank God for MVP’s engagement in this process. There we have a regional insurer that took the charge seriously, was able to compare using data and analytics from another neighboring state.”

Andrew Garland, a vice president for Blue Cross, rejected the idea the insurer wants to play a “shell game.” He called Cooper’s comment “confusing” and said the insurer does everything it can to negotiate the lowest possible prices with all Vermont hospitals.

“Think about the dynamic,” Garland said. “The Green Mountain Care Board tells the hospital that they can have a 2 percent (price) increase. That becomes the starting point for our negotiation.”

“Any hospital will come into the room and say, ‘The Green Mountain Care Board has said I can get 2 percent from you. Why should I accept any less?’ There’s a really big burden on us to figure out how to negotiate off of that,” he said.

Garland added: “I don’t really understand how we can achieve what (independent doctors) want, which is more money for independent docs, without adding more costs to the system. I just don’t see it.”

Cooper also condemned the Green Mountain Care Board for being silent and not “engaging” on the issue of price parity. She pointed to a 22-member commission that Massachusetts set up this month to reallocate $465 million from a monopoly academic medical center to community providers.

Al Gobeille
Al Gobeille is chair of the Green Mountain Care Board. File photo by Roger Crowley/VTDigger

The chair of the Green Mountain Care Board, Al Gobeille, said members are taking the time they need to reach a good decision.

“The law is pretty well thought out, and it’s pretty clear on the roles,” Gobeille said. “We’re going to do our jobs the way we always do: thoroughly, thoughtfully, and when we decide, there will be a decision.”

In April, an employee of the board analyzed insurance claims for shoulder surgeries and knee replacements performed by independent doctors versus doctors who worked for the UVM Medical Center. The employee analyzed all charges associated with the surgeries.

The report found that independent practices — whose surgeons perform surgeries in hospitals’ operating rooms — bill about half as much money for their surgeons’ time as they would bill if they were employed by a hospital.

However, because insurance companies pay several other fees for the surgeries, the report said the total costs of knee surgeries and shoulder surgeries are only about 10 percent less when an independent surgeon performs them than when an employed surgeon performs them.

The hospital said in a statement: “The pay parity discussion looks at one aspect of what patients pay for the health care they receive — physician reimbursement — instead of total cost of care.”

“We think that’s a more useful measure of affordability, and it’s why we support moving away from fee-for-service medicine to paying all providers for taking care of an entire population,” the hospital said.

The board and the Shumlin administration have been working with hospitals to set up a system of health reform that would pay doctors for taking care of populations.

Clarification: An earlier version of this story conflated billing with how much surgeons in independent practices are paid. Those surgeons bill about half as much for their time as they would bill if they were employed by a hospital.

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Erin Mansfield

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  • Irene Stewart

    I hope you will all go back and re-read the fifth paragraph in this column. It states that the UVM Medical Center charges “substantially more” than any comparable academic hospital in New York State. This is no surprise to anyone in Vermont, because this is what a monopoly can do and has done. We are being overcharged each and everyday! What on earth has the GMCB done all these years to bring down costs for all Vermonters? NOTHING. They never, ever say NO to the UVM Medical Center, and the rates just keep rising. This has to stop. Vermonters can no longer accept the way health care is being managed in this state. And now, Shumlin is still pushing for the Medicare waiver to give us the biggest boondoggle of all. If every Medicare patient in this state went to DHMC, Albany, Cheshire, Keene, etc., that Medicare money he is so anxious to use for everyone, except you, would not be available for him, to pursue this crazy proposal. It is going to ration care in Vermont.

    • Walter Carpenter

      “This is no surprise to anyone in Vermont, because this is what a monopoly can do and has done. We are being overcharged each and everyday! What on earth has the GMCB done all these years to bring down costs for all Vermonters? NOTHING. ”

      Think about this sentence: “The Green Mountain Care Board tells the hospital that they can have a 2 percent (price) increase.” Now think about what this 2 percent would have been without the GMCB.

    • Nate Awrich

      So you are against health care “rationing”, but you do want the state government to determine how much hospitals can charge, who they can care for, which physicians they employ, how much the physicians are paid and how much of each category of income the hospitals can make?

      FYI – there are something like 14-15 hospitals in Vermont, and anyone in Vermont can go to NH, Mass or NY (or elsewhere) for their care. UVMMC is large, but it is not a monopoly.

      • Bob Elliot

        But Vermont’s whole health care system is becoming one giant HMO type monopoly called VT OneCare. Governor Shumlin is waiting to see if he gets the go ahead for the state to takeover the Medicare payments, along with Medicaid and private insurance monies, and dole them out to each hospital under a state controlled global budget. Under a global budget, the state will loose money when VT patients get care in another state. It is almost certain that there will be limits on getting care in another state, unless you pay for it yourself. Sounds like Canada doesn’t it. If the waiting times in VT are too long under the limited health care budget, you can go to another state to get care, but on your own dime.

        • Lana Lundeen

          One of the presidential candidates has spoke about erasing the lines between the states for the insurance companies.
          At this time , they do not cross over with similar plans. There are many health insurance companies in the USA. This will cause intense competition between companies. This will cause a decrease in premium costs for citizens. Companies will be forced to decrease their huge profits, to be competative, just to stay in the health insurance business.
          Please register to vote. Please go to the polls. We can make a change with our fingertips. Its NOT to late.

    • Glenda Nye

      Irene Stewart, If you read my commentary below, you will see a link to a story by CBC Broadcasting Canada regarding the Quebec health care problems. It would behoove you and everyone to scroll down and read the comments to this broadcast by Canadians regarding Socialized Medicine. This is where we are headed. I am very experienced in the Quebec healthcare system and rationing of healthcare.. Thank you.

  • Dave Bellini

    This is an opportunity to “bring down the cost of healthcare.” What good is the GMCB if they aren’t doing that?

    • Amber Goss

      I guess that’s why my premiums go up every year, because they’re “bringing down the cost of health care.” Smh.

  • Howard Dindo

    This is what happens when the VT State Governme controls the distribution of medical services. If you want to see UVMMC lower their fees, as a result of lowering their cost, throw some competition into the mix. If Shumlin’s GMCB were to approve Green Mountain Surgical Center’s request to be allowed to sell their services in Colchester, it would be a start and you would see UVMMC’s fees decrease and as a result, medical premiums would decrease.

    Ambulatory Surgical Centers have been expanding throughout the country for many years, but here in VT, we have allowed certain politicians to prevent competition because they want to control what providers we use, what provider services we are allowed to buy, how far we have to travel for services and how many others we have to pay for with the premiums charged.

    Hopefully, when Phil Scott wins in November, he will hand out “pink slips” to Shumlin’s GMCB and replace them with experts such as, Dr. Paul Reiss, Amy Cooper.

    • Good connection Howard. The GMCB’s analysis linked to above shows that more than 70% of the total cost of $15,470 (including surgeon’s cost, hospital cost, and other costs) for shoulder surgeries, and more than 80% of the total of $30,300 for knee replacements, is comprised of the hospital cost (aka the facility fee). This is the same conclusion that a June 2016 national study from the Healthcare Bluebook came to

      Now it would really be something if we had a way to lower the facility cost for some of these orthopedic surgeries. Of course, it turns out that we do. If Vermonters had access to a multi-specialty ambulatory surgery center in our largest metropolitan area, as citizens of each of the 49 other states have access to, then we could be saving up to 50% each time on the facility costs of outpatient surgeries. That would really help us start to move the needle on reducing health care costs.

      • Neil Johnson

        Look at the new hospital they are building….it’s curved, could they possibly make it any more difficult to build. When you are connected and have the inside track to Montpelier, money flows like water. Grant money for all my cronies, says the King of Vermont.

  • Glenda Nye

    The total 2017 Fiscal Year Budget for the Green Mountain Care Board is $10,056,196 as opposed to the 2015 Fiscal Year Budget totaling $7,981,249. This board was created for the specific intent to force All-Payer Global Budget Healthcare on Medicare recipients in Vermont. All of this was done in conjunction with the Obama Administration & Shumlin. The overall intent in the end will be that Obamacare will fail thus politicians will then Impose a nation wide Universal Health Care such as the Canadian system. Please go to the link below, Read the following CBC Canadian Broadcast on the Socialized Medicine system in Quebec, most importantly read the comments of Canadians regarding their experiences, that says it all, this is what we will see along with higher co-pays and premiums. Canadian healthcare is not free you “true-up” the cost when you file your taxes with Revenue Canada.

    • Barry Kade

      From that link:
      Sicotte was 19 when she requested the appointment with a gastroenterologist.
      “I tried not to laugh on the phone,” she said.

      “I couldn’t remember even having requested the appointment. I told them to give my place to someone who needed it more.”

      ‘It’s unclear why she wasn’t contacted for an appointment during all these years.’
      – Alain Paquette, spokesman for Laurentians CISSS

      By the time she heard back, she was 28 and had managed to solve the problem herself through lifestyle and diet changes.

      The local health authority, the Laurentians CISSS, couldn’t explain why it took so long to get back to her.
      It’s not like she was sick and continuously attempting and failing to get an appointment.

      • How about this Canadian case: “Mandy noticed blood and mucus in her stool and immediately sought medical attention. She was understandably worried about what her symptoms meant. After seeing her doctor, she was put on a seven-month waiting list for a colonoscopy. Fortunately, Mandy didn’t wait. She paid out-of-pocket for the test only to find she had stage four cancer and would likely have died within seven months.”

        This is an example of rationed care under a global health care budget. Governor Shumlin hopes to put Vermont’s health care system under a global budget if Washington grants him the “all payer” waiver. Vermonters should be very concerned how that waiver will affect their health care.

      • Zeke Rivers

        Sounds exactly like the VA, doesn’t it Barry? Except with the VA, most people are dead nine years later.

      • Glenda Nye

        Barry Kade, You focused on Sicotte only, I find it interesting that you didn’t remark on the multitude of comments from Canadians telling their horror stories on Quebec’s Socialized Medicine healthcare system. .

    • Neil Johnson

      All done by the lobbyists. All written by lobbyists. All paid for by lobbyists. We just supply the money.

  • Thank you to the Green Mountain Care Board for preparing the analysis that Ms. Mansfield links to in her article.

    The data presented by the GMCB finds that the median payment to UVMMC for an employed physician performing shoulder surgery is 2.4 times the amount paid to an independent physician. You can call this a 140% difference in cost, as the GMCB’s analysis does, or you can say that UVMMC costs are 240% of the independent physician costs, as I did in an April commentary in Vt Digger. The numbers are equivalent, but they are just percentages.

    In terms of the total dollar impact, a typical orthopedics practice with four surgeons might do 500 surgeries a year or more. At a $2,000 additional surgeon’s charge per surgery (using GMCB’s median numbers) that equates to at least $1million in commercial payments added to the system when UVMMC purchases such a practice.

  • It is surprising to me that Mr. Garland cannot “see” how increasing payments to independent physicians could lower overall costs in the system. If raising reimbursement rates to independent physicians (while still keeping them below hospital rates) increases the share of the total population cared for by the independent physicians (maybe by increasing the number of independent practices), it is easy to “see” how it could reduce the total costs in the system.

    Conversely, allowing the hospital systems to negotiate a higher profit margin on their procedures to drive independent doctors into those systems, thereby increasing the share of the population treated by the higher cost hospital groups would raise the total cost to the system.

  • Sharon Gutwin

    BCBS, UVMMC, GMCB and Shumlin’s are interconnected in an unhealthy alliance. They all want us to believe they are acting honorably, but it is obvious to all independent providera and the vast majority of the population that they serve each other’s interests.
    It is up to the legislators to take back our health care system.

    • Neil Johnson

      Well said. We have many unhealthy alliances in our little state.