Before the Committee on Health Care
Financing
The Massachusetts Medical Society wishes to be recorded in
strong opposition to H.3904, "An Act Relative To Promoting Equity
and Efficiency in Health Care Rates." This bill would put
into statute strict parameters for contracts between health plans
and health care providers. However the narrow definition of
provider would limit the provisions to physicians and hospitals
only.
There is also language in the bill requiring any physician
who "provides covered services to a person must provide such
services to any such person as a condition of their licensure, and
must accept payment by a carrier consistent with the provisions of
this section, and may not balance bill such person for any amount
in excess of the amount paid by the carrier pursuant to this
section, other than applicable co-payments, co-insurance and
deductibles."
A conservative interpretation of this language would be that
participating physicians who treat a patient of an insurer may not
balance bill or risk loss of license. A broader interpretation
would see this as a mandate to physicians to treat all individuals
and accept whatever the individual's insurer pays for covered
services regardless of whether they participate in the plan or not.
Further language in the paragraph reinforces the broader impact.
"Any health care provider that participates in a carrier's network
or any health benefit plan shall not refuse to participate in the
carrier's network due to the carrier's compliance with this
section." This could be interpreted to read that physicians or
hospitals that take any insurance plan are subject to this
requirement to accept all insurance coverage as payment in
full.
H.3904 would also require health plans to reduce the rates they
pay to health care providers whose rates are above the plan's 80th
percentile, as determined by the Division of Health Care Finance
and Policy's Relative Price methodology, and increate rates to
providers that fall below the 20% percentile.
The MMS supports the intent of H.3904, which is to reduce
healthcare costs. The MMS recognizes that rising health care
premiums take an especially large toll on many small businesses in
Massachusetts, many physicians are small business owners
themselves. We also recognize that all health care providers
play a role in helping to moderate those increases. However,
we do not believe that this legislation will appropriately achieve
the underlying goal.
This bill regulates output prices without any recognition that
providers have limited control over input prices such as labor,
pharmaceuticals and medical devices. There are many factors
responsible for the increase in premiums. Rising unit costs and
greater utilization are the two that are most frequently
mentioned. While H.3904 may address unit costs by increasing
rates for low cost healthcare providers and reducing rates for high
cost providers, it does nothing to address utilization, consumer
preference, administrative costs, and employer demand. In
order to effectively moderate the rise in premiums, it is necessary
to understand all parts of the cost equation.
For all the above reasons, the MMS urges the Committee on Health
Care Financing to retain H.3904 in committee for consideration
within the broader context of statewide health system and payment
reform.
