Massachusetts Medical Society: MMS Opposes Licensure and Taxation of Ambulatory Surgery Centers in House Health Care Cost and Access Bill

MMS Opposes Licensure and Taxation of Ambulatory Surgery Centers in House Health Care Cost and Access Bill

LICENSURE AND TAXING OF “OFFICE-BASED SURGERY CENTERS” (H.4639, SECTIONS 66 & 77)

The Massachusetts Medical Society strongly opposes the provision in House bill 4639 that would create a new category of licensed health care facilities: office-based surgery centers. Over-regulating physician offices, which have long provided high-quality care, would add unnecessary expense and jeopardize the sustainability and cost effectiveness of these high-value sites of community-based care. 

As defined by H.4639, an office-based surgical center is one or more practitioners engaged in a solo or group practice, for profit or not for profit, which provides ambulatory surgical or other invasive procedures requiring (i) general anesthesia, (ii) moderate sedation, or (iii) deep sedation, and any liposuction procedure, excluding minor procedures performed with local or topical anesthesia and procedures requiring minimal sedation whereby the patients cognitive function and coordination may be impaired but they respond normally to verbal commands.  

The House bill would require office-based surgical centers to be licensed by the Department of Public Health and to pay an annual 8.75% tax on the total dollar amount of assessed charges for commercial payers.  Office-based surgical centers could also be subject to restrictive, onerous and expensive Determination of Need and other regulatory requirements applicable to health care facilities, as determined by DPH. 

The MMS opposes this provision because:

• Physicians are already regulated and governed by the Board of Registration in Medicine. There is no need for a new level of regulation by the Department of Public Health- especially in the absence of indications of any quality concerns.  

• The imposition of the 8.75% tax on “assessed charges”, rather than actual fees collected and revenue generated, will force many physicians’ offices to close, to offer a decreased range of services, and/or to sell their practices to hospitals, thus decreasing access to care and increasing costs to patients, insurers and the Commonwealth.  Healthcare costs will rise and patients will pay the price.

• No other state in the nation taxes physicians’ offices on charges.  Physicians do not get reimbursed for charges; they receive contracted rates as negotiated with health insurers.  Taxing a physician’s office based on charges rather than rates is like paying sales tax on the sticker price of a car rather than the negotiated sale price. 

• The concept of licensed office-based surgical centers has never before been put forth by the Massachusetts State Legislature.  It does not – nor has it ever – existed in standalone legislation.  It has never been subject to a public hearing. It has never been discussed by any committee or commission, workgroup, public or quasi-public entity. While the Medical Society appreciates the House’s desire to ensure the viability of community hospitals, doing so via this approach would have unintended consequences on physician office practices which could disrupt surgical care in office-based settings.

 

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