Massachusetts Medical Society: Provider Price Variation Commission

Provider Price Variation Commission

The Honorable James T. Welch
Senate Chair, Joint Committee on Health Care Financing
State House, Room 309
Boston, MA 02133


The Honorable Jeffrey Sánchez
House Chair, Joint Committee on Health Care Financing
State House, Room 236
Boston, MA 02133


Re: Provider Price Variation Commission

Dear Chairmen Welch and Sánchez and members of the Special Commission on Provider Price Variation:

Thank you for the opportunity to provide comment to the Provider Price Variation Commission. Despite lacking an appointment to this commission, we have attended the meetings and followed your work with interest, particularly as the focus of many conversations at the commission meetings have shifted toward physician matters, including tiered insurance plan design and out of network billing.

While it is critical to engage in conversations about alternative insurance plan designs such as tiered network and the issue of out-of-network billing, we hope that they will ultimately take place in a venue that allows for full participation of relevant stakeholders, and we urge that specific recommendations related to these issues be developed when such an inclusive venue presents itself.  We further note that there is plenty of work to still be done per the original charge of the commission, which is in part to identify “the acceptable and unacceptable factors contributing to price variation in physician, hospital, diagnostic testing and ancillary services.”  There appear to be many other charges to the commission that have evaded substantial discussion, as well.

I would like to highlight two general considerations that the physician community would like to convey to the Commission.

First, the issue of tiering has been raised many times in the course of this Commission- in fact; many conversations have referenced “tiering on steroids” as a possible solution to addressing price variation.  The Medical Society wishes to highlight some perspectives regarding tieiring which have largely evaded conversation of the Commission thus far.  

  • Doubling down on tiering is not a panacea, as the jury is still out on the effectiveness of these plans to promote lower cost care. In their 2015 Report on Health Care Cost Trends and Cost Drivers, the Attorney General’s office said, “We found that membership in tiered products has grown, but the presence of these products has not resulted in an overall shift in patient volume away from hospitals that insurers have identified as lower value.” We urge continued study of these and other alternative payment designs to ensure focus on strategies with the strongest evidence base.

  • The same Attorney General’s report indicated substantial inconsistencies among tiering products, some of which lead to high price hospitals being included in the best available tier (without quality-based explanations) Tiering needs substantial fixing before it should be affirmed or even amplified in the market.

  • Lastly, tiering methodologies are shrouded in opacity.  The above finding of the AG’s report allude to a tension between the findings of their study of tiering and the Ch. 288 mandate to tier providers based on standardized and transparent cost and quality measures. Combining these concerns with longstanding issues such as variability and inconsistency of deductibles and co-payments, and still imperfect attribution methodologies, and tiering suddenly may not be the solution that should be put on steroids.  For example, a study published in 2016 found that “the current methods for profiling physicians on quality may produce misleading results.” [i] Therefore, we hope these perspectives are considered by the commission as a whole.

We have also been particularly interested in the many conversation of this Price Variation Commission around the issue of out-of-network billing.

First, the Medical Society remains committed to finding a solution to out-of-network billing that takes the patient out of the middle of all surprise bills- held harmless, with a prohibition on their receiving a balance bill. Patients seeking care at in-network facilities should not be subject to surprise bills.  

That is why we are pleased to let you know that the Medical Society is finalizing legislation to address this issue- to prohibit patients from receiving “surprise bills” and providing a sustainable reimbursement strategy moving forward. The Medical Society’s leadership and Committee on Legislation are currently reviewing this legislation that we hope will offer a thoughtful solution to the issue that has been the subject of so much conversation at your commission.  The legislation is modeled after successful legislative solutions put forward by other states- strategies highlighted by the Health Policy Commission in its 2015 Cost Trends Report.  We look forward to discussing and engaging on this issue through your roles as legislative chairs of the Joint Committee.  

And second, while we don’t have the data to know the exact nature of the issue, it will be critically important moving forward to ensure that patients have access to adequate networks.  While we’re all concerned about cost of health care, cost savings are only as good as are the ability of the underlying strategies to assure access to the care. We urge you to keep this issue in the forefront of all conversations moving forward.  

Again, as the discussions of out-of-network billing have come solely from the limited membership of the Commission, I’m joined by Dr. Alex Hannenberg from the Massachusetts Association of Anesthesiologists.  Dr. Hannenberg has long been closely involved in billing matters for his practice, and is here to highlight some considerations and reactions to many of the conversations of the Commission on this topic.


Brendan Abel, Esq.
Legislative & Regulatory Affairs Counsel

[i] Adams JL & Paddock SM. 2016. Misclassification risk of tier-based physician quality performance systems. Health Services Research.

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