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.
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.
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.