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

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

TAX ON AMBULATORY SURGERY CENTERS (H.4639, SECTION 77)

The MMS opposes the House bill’s intent to tax Ambulatory Surgery Centers (ASCs) at 8.75% of charges. Specifically, Section 77 of H.4639 would impose the following tax on ASCs, urgent care centers, limited service clinics and a new category of licensed providers called office based surgical centers:

"Each assessed specialty clinic shall, in each fiscal year, pay to the executive office an amount equal to 8.75 per cent of the total dollar amount of its assessed charges for commercial payers. Each assessed specialty clinic shall be exempt from contributing any percentage of the total dollar amount for its assessed charges for public payers."

The MMS opposes the ASC tax for the following reasons:

• The proposed tax on ASCs is excessive, to the point that its unintended consequences would actually increase healthcare costs in the Commonwealth.  If passed, the 8.75% tax on assessed charges will make Massachusetts the state with the highest ASC provider tax in the nation.  All other states that have a tax on ASCs base the rate on revenue received, not charges. 

• ASCs offer patients increased access to high quality outpatient surgical and diagnostic services at costs less than those at hospital outpatient departments.  ASC prices are about half of hospital outpatient prices for the same procedures. For Medicare, prices double when moved to hospital-based offices. Patients benefit from reduced costs at ASCs through lower deductible and coinsurance payments.  High value care offered at ASCs benefits insurers and employers as well, as they are struggling to contain health care costs for beneficiaries. 

• Imposition of the 8.75% tax will force many freestanding ASCs to cut back on investment in replacement technology, reduce the range of services offered, or even resort to selling their facilities to hospitals, thereby decreasing access to care, increasing costs to patients and the healthcare system.

 

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