MMS Issues Strong Opposition to Proposed Legislation Linking Licensure to Participation in Health Plan

November 2, 2009

Contact: Richard P. Gulla
rgulla@mms.org
(781) 434-7101
pager: (877) 820-9023

Senate 2170 dictates to physicians, ties licensing to participation in private health plans and links reimbursements to a broken Medicare payment system  

Society says bill exploits physicians in the names of health care cost control

Waltham/Boston -- November 2, 2009 -- The Massachusetts Medical Society today testified before the legislature’s Health Care Financing Committee in strong opposition to Senate 2170, An Act Relative to Affordable Health Plans,” legislation that the physicians group says exploits physicians, attempts to derail Governor Patrick’s recommendations on addressing the cost of health care for small businesses, and sends “absolutely the wrong message” to the rest of the country about health care reform in Massachusetts.

The legislation would establish an Affordable Health Plan, ostensibly designed to make health insurance more affordable for small businesses.  
 
“While we recognize the increasing burden everyone bears with rising health care costs,” Mario Motta, M.D., president of the Massachusetts Medical Society said, “this bill is the wrong approach for too many reasons. It is unfair to physicians and exploits them in the name of health care cost control.”

One provision of the bill requires the participation of physicians and other health care providers in this plan as a condition of licensure.

Dr. Motta said “There should be no law that requires physicians and other providers to follow the dictates of insurers, including rules on limiting care to patients, or risk loss of their professional license. Further, The Board of Registration in Medicine, the state agency responsible for licensing, should not be mandated to revoke any qualified physician’s license on the basis of that physician’s contractual relationship with any insurer.” Dr. Motta pointed out that even Medicare and Medicaid do not tie participation in its plans to a condition of licensure.

Dr. Motta said the bill would further require that health care providers accept as payment 110 percent of Medicare rates for health insurance for small businesses. “This provision of the bill,” he said, “ties payment rates to a formula we know is broken and to a system of rates that the state has absolutely no control over.” Dr. Motta said lawmakers in Washington have been struggling for years with how to correct the SGR (Sustainable Growth Rate) formula Congress created in 1997, which forms the basis for Medicare reimbursement. The current formula calls for a 21 percent cut in physician reimbursements as of January 1. Each year for the last several years, Congress has used a last-minute fix to erase planned cuts in physician payments called for by the SGR formula.

Senate 2170 provides even more dictates for physicians, in that they would have to accept all patients and stated rates if the physician participates in any other plan offered by that insurer. 

“The bill has no provisions requiring health insurers to pass any savings along to employers,” said Dr. Motta.  “While insurers have stated that the bill has cost protections, there is no language to that effect actually in the bill.” 

Dr. Motta offered several suggestions for improving the situation for small businesses. One would be to use a system of community ratings, whereby the risk is shared by a much larger group of people. Additionally, Dr. Motta said huge savings could be gained from cutting insurers’ administrative overhead and instituting liability reform to reduce the expensive practice of defensive medicine.   

“Insurers are raising premiums without additional reimbursements to physicians,” said Dr. Motta, “so physicians aren’t the problem and shouldn’t be the ones to bear the burden of the fix.”

Noting that that today’s hearing was hastily scheduled just last Friday afternoon, the Medical Society characterized it as “clearly an attempt by the insurance industry to derail the Governor’s recommendations on addressing the cost of small business health plans.” 

In October, the Governor announced a multi-step plan to look at the health care costs of small businesses. He called for immediate hearings of The Division of Insurance to examine small business premium increases; the filing of legislation amending small-group rating rules, giving the Division of Insurance expanded power to annually eliminate any unnecessary administrative costs;  the filing of legislation to expand the Division of Insurance's authority over health insurance premiums; and the conduct of special sessions by the Division of Insurance with stakeholders to plan the development of open-access purchasing cooperatives.
 
“Physicians have strongly supported health care reform,” said Dr. Motta. “We are dedicated to the service of our patients, and we treat patients regardless of reimbursements. This bill goes too far in taking advantage of that dedication solely for the benefit of insurers.”

“This legislation is sending a message to physicians and other providers,” Dr. Motta concluded. “The sponsors of this legislation don’t value your work or your voice. Advancing this bill sends a message to physicians and the health care industry across the nation about what the Massachusetts model for healthcare reform is. This is absolutely the wrong message.”   

The Massachusetts Medical Society, with some 22,000 physicians and student members, is dedicated to educating and advocating for the patients and physicians of Massachusetts. The Society publishes the New England Journal of Medicine, a leading global medical journal and web site, and Journal Watch alerts and newsletters covering 13 specialties. The Society is also a leader in continuing medical education for health care professionals throughout Massachusetts, conducting a variety of medical education programs for physicians and health care professionals. Founded in 1781, MMS is the oldest continuously operating medical society in the country. For more information please visit www.massmed.org, www.nejm.org, or www.jwatch.org.