[H]ospitals, insurance companies and state regulators picked apart Tuesday night the Senate Finance Committee’s latest version of medical pay parity legislation.
The stakeholders raised questions on a pared-back version of an amendment to H.29. A previous version would have drastically reduced pay disparities between independent and hospital-employed doctors.
Independent doctors say insurance companies pay hospital-employed doctors two to three times as much independent doctors for performing the same services. Independent doctors have historically attributed the differential to the bargaining power of hospitals.
Sen. Michael Sirotkin, D-Chittenden, has been the primary member of the Senate Finance Committee working on implementing pay parity. He has presented three different versions of the amendment to H.29 so far.
The first version would have required insurance companies to pay doctors equally for primary care services and routine office visits. That version also would have required insurance companies, by 2020, to narrow the range of what different doctors are paid for other services so that no one is paid more than 20 percent more than the average or 10 percent below the average.
The second version would have required the Green Mountain Care Board to create a working group to determine how to reduce the disparity in pay by 10 percent per year for four years. That draft would have retroactively barred insurance companies from increasing pay to recently acquired practices, and prospectively barred insurance companies from increasing pay to a practice once a hospital buys it.
The third version of the amendment was similar to the second. The biggest change would have required the Green Mountain Care Board to cut the pay disparity by 40 percent over four years, instead of 10 percent per year for four years. That version allowed the board to have some flexibility, Sirotkin said.
The Vermont Association of Hospitals and Health Systems, Blue Cross Blue Shield of Vermont and the Green Mountain Care Board all raised questions on Tuesday night with key enforcement parts of the third version.
Susan Barrett, the executive director of the Green Mountain Care Board, asked the board to eliminate language requiring the 40 percent decrease in pay disparity. She asked for the committee to use language that would make that 40 percent number optional.
“We would want to talk with our insurers, the hospitals, the independent practices,” to pick the right number, Barrett said. “We don’t want to solve the problem before we solve the problem, but we are committed to solving the problem.”
Sirotkin replied: “That’s the teeth of the whole bill.” He told her to come up with a suggestion to change the bill other than making the decrease in pay disparity optional.
Barrett said: “We would like to know if that’s the right number. (We should) study this and work with the stakeholders. It may be 50 percent. It may be 60 percent.”
Sirotkin told Barrett that the language calling for 40 percent is only a floor on reducing the disparity.
Barrett said the board would still like to see language saying the board “may” reduce the disparity. She also said, instead of 40 percent, the bill could say the board could use “an appropriate differential factor.”
Kelly Lange, from Blue Cross, said the insurer would like to see the committee change the language in the bill in the “findings” section, which identifies specific procedures in which Blue Cross pays academic medical centers more than independent doctors.
“I will note this is a multi-payer issue,” Lange said. “It’s not just a Blue Cross issue.” She asked for language to take out the specific dollar amounts. She said there was a disparity in Medicaid reimbursements doctors received.
Lange said the insurer “very much supports” a work group, but said the bill was so specific that “you’re offering the answer before we’ve really had the time to really research.”
Sen. Ann Cummings, D-Washington, told Lange that the Legislature passed language in 2014, 2015 and 2016 seeking action on pay parity but the Green Mountain Care Board has not yet implemented anything.
“We’ve gone on several years, and nothing’s happened,” Cummings said.
When asked about the question two weeks ago, Barrett called pay parity “a very complex issue, and it’s not a simple task.” She also said the board needs to consider how pay parity could impact health care reform such as the all-payer model.
Mike Del Trecco, the vice president of the Vermont Association of Hospitals and Health Systems, said Tuesday night his organization “fully supports fair and equitable payments to all providers.”
Del Trecco argued that language in the budget bill, which requires the Green Mountain Care Board to report on its progress in implementing pay parity, is sufficient.
He also said retroactively barring insurance companies from paying more money to doctors offices that hospitals have recently acquired “may raise some legal questions and concerns.”
Del Trecco also said that the all-payer model could help with concerns of independent doctors. “It certainly won’t be quick enough and fast enough, and I certainly have heard the anxiety and frustration,” he said.
The future of the all-payer model is currently unclear. On Monday night, a key committee of stakeholders discussed whether to suspend operations of the administrative entity that was set up specifically to collect payments under the all-payer model.
Healthfirst, which represents independent doctors, and the Bi-State Primary Care Association, which represents community health centers, testified in favor of the amendment.
