The Senate passed H.29, with an amendment on medical pay parity, overwhelmingly on a voice vote Friday.
The Senate attached the pay parity language to H.29, which originally dealt with Medicare supplemental insurance. The House could decide as early as Wednesday whether to accept the Senate’s changes.
Only Sens. Claire Ayer, D-Addison, the chair of the Senate Health and Welfare Committee, and Jeanette White, D-Windham, the chair of the Senate Government Operations Committee, voted against the bill.
Pay parity is the idea that insurance companies should reimburse medical practices the same amount of money for a given office visit or procedure, regardless of whether the doctor is self-employed or works for a hospital.
Independent doctors say insurance companies pay hospital-employed doctors two to three times as much for performing the same services. Independent doctors have historically attributed the differential to the bargaining power of hospitals.
Blue Cross Blue Shield of Vermont told VTDigger in 2016 that it has two fee schedules: one for community providers, including independent doctors and small hospitals, and one for academic medical centers. The insurer’s spokesperson said at the time that the fees for academic medical centers can be more than twice as much as the community provider fee.
Ayer and White opposed H.29 on the Senate floor. They each introduced amendments, and Ayer went head to head on the pay parity issue with Senate President Pro Tem Tim Ashe, D/P-Chittenden.
H.29 requires the Green Mountain Care Board to convene a working group to develop a plan to reduce pay disparities between independent doctors and those employed by academic medical centers by the “maximum achievable” amount in the next three years and report back to a joint legislative committee this year.
Another provision would bar insurance companies from raising how much they reimburse physician practices specifically because a hospital buys the practice. That provision mirrors a rule proposed by the federal Medicare Payment Advisory Commission in November.
Neither Ayer nor her committee were involved in crafting the pay parity provisions attached to H.29. The Senate Finance Committee introduced the language.
Sen. Michael Sirotkin, D-Chittenden, spearheaded the proposal and introduced three different versions to address concerns from stakeholders — such as the Green Mountain Care Board, Blue Cross Blue Shield of Vermont, and the Vermont Association of Hospitals and Health Systems.
On Thursday, before the Senate gave the latest version of H.29 preliminary approval, Ayer repeatedly questioned Sirotkin about whether he thought independent doctors didn’t make enough money.
She then challenged him on whether the Senate Finance Committee, which she sat on until this year, had looked at research on the take-home pay of independent versus hospital-employed doctors.
Sirotkin said for three years the panel has looked at reimbursement rates, not take-home pay, with no action from the Green Mountain Care Board.
Ayer said independent doctors take home as much or more income as hospital-employed doctors. She said that if lawmakers want to create pay parity they need to look not just at independent doctors but at the entire medical system — including mental health and substance abuse professionals.
“If we know that the hospital doctors themselves aren’t getting that money, where is it?” Ayer asked. “And if we find where it is, who in the system are we looking at as being the most underpaid — the mental health workers, the substance abuse workers, the people who work with old people?”
White asked on Thursday whether decreasing payments to hospital-owned physician practices would hurt the small hospitals in her area — Brattleboro Memorial and Grace Cottage Hospital.
White also took aim at language in the “findings” section of the bill.
That section points to low pay as one reason independent doctors leave Vermont or sell their practices to hospitals. The section uses an example “one Vermont insurer” that paid independent doctors $78 for an office visit versus $177 to an academic medical center-affiliated doctor in 2015.
On Friday, when White and Ayer introduced amendments, the Senate Finance Committee convened briefly to fend off the challenges. It voted unanimously to reject Ayer’s main amendment, which would have expanded the scope of the Green Mountain Care Board’s working group.
Tension grew when White offered an additional amendment that would have removed the section of the bill barring insurers from increasing reimbursements to practices immediately after a hospital acquires the practice.
White said she had been hearing from small hospitals around the state, and she concluded that “there are many reasons for those costs to go up” when a hospital purchases a practice.
“Many practices are sold to hospitals or become part of hospitals because the physicians want to have regular schedules, so the hospitals hire hospitalists,” White said. “That’s one of the reasons why costs go up.”
Sirotkin said on Thursday that hospitals are able to raise the prices for recently acquired practices because they have more bargaining power with insurance companies. He also said Dr. John Brumsted, the chief executive officer of the UVM Health Network and UVM Medical Center, supported the part of the bill barring insurance companies from increasing reimbursements to practices immediately after a hospital acquires it. On Friday White read a note from Brumsted saying he supports the practice but does not support codifying the practice in statute. White also said Brumsted’s comments only apply to UVM, not to the smaller hospitals.
The amendment failed on the Senate floor, 14-12.
Ayer then offered an amendment that would have expanded the scope of the Green Mountain Care Board’s working group and the solutions the board must present to lawmakers.
“If the point of this whole exercise is to encourage independent doctors, to help them stay strong on their feet, to make the choices easier for them to get into business,” then lawmakers should look at other strategies, Ayer said.
Ashe stood up to say he would vote against Ayer’s amendment.
Ashe said he learned about pay disparities between hospital-employed doctors and independent doctors several years ago when he was playing soccer with a doctor who was, at the time, one of the last remaining independent orthopedists in Chittenden County.
He said the Senate Finance Committee passed pay parity bills three years in a row, and now for the fourth year, stakeholders continue to ask how pay parity would affect parties such as insurers and hospitals, not independent doctors.
“None of those interested parties, after four years, have stopped and flipped it on its head and said, ‘If we do not stop and help the independent physicians, what will happen to them?’” Ashe said. “I think it’s in part because we already know the answer to that. They will slowly disappear.”
“Why should we care?” Ashe asked. “If right now independent physicians are reimbursed at a lower rate, that means that if a consumer no longer has the option in some regions of the state to choose between a lower- and higher-reimbursed practice, what that means is we have lost an option that saves a commercial insurer money and potentially saves a consumer money. That’s gone. …”
“And if it is a deliberate policy that we want (independent doctors) to go away, then someone should state it publicly and just say it,” he said. “But because everyone talks a good game about how we care about the independent physician and then doesn’t do anything, we get the result that we’ve been seeing, which is that they slowly disappear.”
“And that’s bad for consumers,” he said. “It’s bad for the independent physician. It’s bad for choice. It’s bad for innovation that we sometimes see in independent practices. And none of this is meant to be a word of criticism to the larger facilities. They have their critical, important, fundamental role as well.”
Ayer said she agrees with Ashe, but improving reimbursement disparities between independent doctors and hospital-employed doctors may not save insurance companies or consumers any money.
Ayer’s amendment failed 18-11, with all six senators from Chittenden County voting against it. H.29 then passed in a voice vote.
