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.
