The Senate Finance Committee may pass legislation requiring insurance companies to reimburse independent doctors and hospital-employed doctors the same amount for their services.
The committee is looking to put the language onto another health care bill, H.29, and send it back over to the House. The committee put together a draft amendment last week and will discuss that amendment Monday afternoon.
The committee criticized the Green Mountain Care Board two weeks ago for not moving forward with paying doctors equally — a concept called pay parity. Lawmakers said they have passed three different bills since 2014 seeking to address this issue, but nothing has been done.
Independent doctors report that insurance companies pay medical practices affiliated with the University of Vermont Medical Center, the state’s only academic hospital, two to three times as much as independent doctors for the same services. Independent doctors have often attributed the disparity to the bargaining power of hospitals.
Senators put language in the annual budget requiring the Green Mountain Care Board to report back by Oct 1. on the progress it has made in the past three years to implement pay parity. Language they are considering putting into H.29 would go further.
The amendment would require insurance companies to pay all doctors’ offices —whether hospital-owned or independently owned — the same amount of money for routine office visits and a broad array of primary care services, including obstetrics and gynecology, starting Jan. 1.
By Jan. 1, 2019, insurance companies would be required to lower the range of what different doctors are paid so that no one is paid more than 30 percent above the average payment rate or less than 20 percent below the average rate. By Jan. 1, 2020, that range would need to be cut down to 20 percent above and 10 percent below.
The changes in payments would apply only to professional fees, which reimburse for a doctor’s time, and not facility fees, which hospitals but not independent doctors are paid in addition to professional fees to help maintain their infrastructure.
“We think that (the language) will help sustain independent practices in the state, which we’ve been losing at an alarming clip,” said Amy Cooper, the executive director of HealthFirst, a group representing independent doctors. She called the language “very specific to professional fees” and “avoids facility fees and all the controversy around that.”
Cooper said lawmakers are taking the issue seriously, but scheduling has been an issue because they did not take it up until late in the session. She added, “The lobbying machine for the hospital association and the various hospitals is opposed to this, which I think has perhaps had an impact.”
Mike Del Trecco, the vice president of finance for the Vermont Association of Hospitals and Health Systems, said there’s not enough information about the financial performance of independent practices. Hospitals are currently required to submit financial information to the Green Mountain Care Board as part of the regulatory process.
“I think we need more financial information from the independent physicians on their financial performance that exists in a similar format to hospitals,” Del Trecco said. “So in order to move forward with pay parity with fair and equitable financing, it needs to be defined.”
He said, “Those items haven’t been really clearly vetted, and in order to do it correctly, the Green Mountain Care Board, insurers, would need more clear financial information about what physician independent practices are having problems with
‘fair and equitable.’ In order to do that, I’d recommend some sort of regulatory oversight by the Green Mountain Care Board.”
Del Trecco said price transparency — the idea of having hospitals and independent doctors’ offices disclose the prices that consumers will have to pay — would not necessarily help pay independent doctors fairly or equitably. “What I can say is that the payment reform package under the all-payer model, over time, would definitely solve this,” he said.
The all-payer model envisions putting all doctors and hospitals in the state under the same administrative entity, called the Vermont Care Organization, and having insurance companies pay the Vermont Care Organization for services. The Vermont Care Organization, which is closely related to the University of Vermont Medical Center, would then pay hospitals and doctors’ offices for their services.
Marni Jameson, the executive director of the Association of Independent Doctors, called it “nonsense” that there’s not enough evidence to show that independent doctors are paid less than hospital-employed physicians. She said Medicare pays hospital-employed doctors more, and other insurance companies follow suit.
Jameson pointed to the Medicare Payment Advisory Committee, or MedPAC, which advises the federal Medicare program on how to save money. “For years it has noted the disparity, talked about leveling the playing field, and saving hundreds of billions of dollars in health care,” she said. “This is not a secret.”
In addition to Medicare paying hospitals higher professional fees, which reimburse for a doctor’s time, Medicare pays hospitals facility fees. Jameson said the combination of higher professional fees and getting facility fees leads to the pay disparity.
“Whatever Medicare does, then private insurance follows,” she said. “So private insurance has gone along and agreed to pay these facility fees and these professional fees. And it gets back to bargaining power. The more lives that a hospital controls, then the more money they can bargain for from insurance companies.”
Sen. Ginny Lyons, D-Chittenden, a member of the Senate Finance Committee, said she would like to see the current amendment’s language revised. She said the Green Mountain Care Board needs to fully look at whether to pay independent doctors more at the expense of hospitals.
“My interest is not to reduce the income or the payment to other providers to support the other providers, and I know the independent providers may not like that, but I think we need to bring everyone into a good place, bring people up, but don’t bring other people down.”
The Senate Finance Committee will meet at 2 p.m. Monday.
