AN ACT TO IMPROVE HEALTH CARE BY INVESTING IN VALUE
BEFORE THE JOINT COMMITTEE ON HEALTH CARE FINANCING
The Massachusetts Medical Society is a statewide professional association of over 25,000 physicians, residents, and medical students across all clinical disciplines, organizations, and practice settings. The Medical Society advocates on behalf of patients, for a better health care system, and on behalf of physicians, to help them provide the best care possible. Physicians in Massachusetts play a central role in the state’s health care cost containment efforts and have demonstrated commitment and ability to successfully manage and contain total medical costs while continuing to provide the highest quality of care for their patients.
While the Massachusetts health care system has led the country in slowing cost growth over the last several years, out-of-pocket costs continue to rapidly rise, exceeding wage growth and harming the most financially vulnerable families. Physicians regularly have difficult conversations with their patients about the affordability of health care, such as which prescriptions drugs they can afford and which they can forgo. We therefore must find targeted health care solutions that continue to constrain costs but that truly address the remaining drivers of high out-of-pocket expenses. And, of course, all while maintaining the high quality and high access that has made Massachusetts a national leader in health care.
The Medical Society commends Governor Baker for filing House bill 4134, An Act to improve health care by investing in VALUE, which offers solutions to many vital issues facing patients across the Commonwealth. In a time of incredible innovation and specialization in medicine, Governor Baker’s vision of promoting positive change to our health care system through investments in primary care and behavioral health is bold and wise. House bill 4134 has thoughtfully identified many of the most pressing issues facing our collective pursuit of a higher value, patient-centered health care system.
Many sections, such as those aiming to align health care quality measures, come with strong support of the medical community, as we believe that addressing the well-documented administrative waste in our system is a critical pathway to saving health care costs without jeopardizing quality or access to care. For other sections, support may come with qualifications, but the shared end goal should serve as an important indicator that the Medical Society stands willing to engage in finding the best pathway to the shared end goal. For example, the Medical Society strongly supports the patient protections contained in the surprise billing section of the VALUE Act but also offers alternative perspectives relative to the mechanics of how to achieve the important shared aim of a health care system free of surprise bills.
Additionally, while the MMS appreciates Governor Baker’s inclusion of a thoughtful telemedicine framework, we believe this proposal could be strengthened by the inclusion of additional provisions that will extend the promise of telemedicine to all Massachusetts patients and will facilitate the widespread adoption of telemedicine among physicians. Lastly, the Medical Society does oppose some provisions of H.4134, including those that seek to expand the scope of practice for certain medical professionals.
The Medical Society has detailed below its position and concerns relative to these key features of H.4134.
Primary Care and Behavioral Health Investment
The Medical Society strongly supports the intent of Governor Baker’s proposal to promote a 30 percent increase in primary care and behavioral health spending. We share his perspective that thoughtful investments in primary care can drive higher quality and lower cost care across the health care system. As we face an increasingly aging population with high rates of chronic disease, the medical care provided by primary care and the role of primary care as the coordinator of care in an ever-complex health care system are paramount. The importance of investing in primary care is perhaps only outweighed by the need to strengthen the behavioral health system in Massachusetts. We recognize the promise of behavioral health care that is better integrated and more highly coordinated, but a lack of investment has limited its uptake, leaving patients with challenges in accessing such care.
In 2010, the Rhode Island Office of the Health Insurance Commissioner required commercial insurers to increase the percentage of their overall medical spending dedicated to primary care by 1 percentage point per year for five years. As a result, spending on primary care grew 37% from 2008 to 2012, while total medical spending fell 14%. While Rhode Island’s positive experience lends support for this approach in Massachusetts, as outlined in House bill 4134, many important details about this proposal remain unanswered. How will ‘primary care’ be defined? What will be the source of these increased investments? Could the organization-specific provisions in this legislation unintentionally penalize current systems that have a much higher primary care spending baseline?
While legislation commonly lacks some detail—detail often derived through the regulatory process—the questions unanswered in this proposal are fundamental to understanding the impact that this policy will have on the health care delivery system. For example, if this expenditure increase results in a zero-sum game with no additional investments, then certain high-value services would likely need to be cut. MMS cannot support a proposal that robs a high-value specialty service to pay even the most deserving of primary care or behavioral health initiatives. There is also insufficient detail regarding how the money will be invested. Any target of spending increase is only as valuable as the evidence-base for the investment. Further detail is needed regarding how the money should be invested, and, perhaps most importantly, how the investments are evaluated. Any such proposal to increase spending in primary care and behavioral health should be accompanied with a plan for patient-centered evaluation.
Administrative Simplification & Quality Measure Alignment
The Massachusetts Medical Society supports Governor Baker’s inclusion of a plan to better align health care quality measures. This proposal highlights the merits of health care cost containment legislation focusing on reducing waste and undue administrative complexity. A recent study found that physicians spent 27% of their office day on direct clinical face time with patients and spent 49.2% of their office day on EHRs and other desk work.2 Administrative complexity reduces access for patients and adds cost to the system; not only do physicians spend countless hours on low-value administrative tasks, but they must hire staff for the more extraneous tasks, such as the 16 hours per week spent obtaining prior authorizations. MMS supports even greater legislative scrutiny to administrative complexity in health care.
As for Section 1 of H.4134, the Medical Society strongly supports greater alignment of health care quality measures. Each year US physicians’ practices in four common specialties spend, on average, 785 hours per physician and more than $15.4 billion dealing with the reporting of quality measures.3 MMS therefore strongly supports the establishment of the Quality Measurement Taskforce to create an aligned set of measures of health care provider quality and health system performance. We note concern, however, that in addition to the Taskforce’s primary objective of creating a core measure set, Section 1 also allows for the creation of a “non-core measure set” which can also be used in contracting. Alignment is only truly beneficial if it reduces both redundancy and the overall number of quality measures on which a physician is required to report. If the non-core set becomes a catch-all for all non-core measures that insurers still wish to utilize, then the Taskforce will not make a meaningful impact on the waste that is associated with the proliferation of quality measures.
Out-of-network Billing
The Medical Society appreciates the inclusion of provisions in H.4134 that address the problem of unavoidable out-of-network (“OON”) billing, which unfairly puts patients in the middle of a matter that should be resolved by their health plan and physician. The physician community is committed to a solution that holds patients harmless, provides transparency for patients regarding network information, and strikes a balance that will maintain a healthy marketplace wherein physicians and insurers are incentivized to negotiate in good faith to come to contract, ultimately protecting access to vital health care services. The entire health care system functions better for patients when there are contracts between payers and physicians, which ensure quality accountability, coordination of care, and administrative efficiency through timely billing and payment. As such, the Medical Society opposes H.4134’s proposed solution to this complex problem, as it will not result in a reimbursement framework that will maintain a healthy marketplace that has long lead to large percentages of physicians and hospitals in contract with insurers across the state.
The VALUE Act would allow insurers to reimburse OON emergency services at contracted or in-network rates if the physician participates in the carrier’s network but does not contract with the carrier for the patient’s specific plan. If the physician has more than one contract with the carrier but not for the patient’s specific plan, then reimbursement would be at the average contracted amount. If the physician does not contract with a carrier, then reimbursement would be determined by the Health Policy Commission (HPC) at a “payment level equal to a percentage of the Medicare reimbursement rate.” The Medical Society has several concerns with this approach, including the establishment of HPC as a rate-setting organization, the use of Medicare reimbursement rates as a benchmark, and the lack of an independent dispute resolution process to settle reimbursement disagreements.
The Medical Society also has serious concerns with the substance and processes set out in Section 148, which authorizes the Health Policy Commission, in consultation with CHIA, to set reimbursement rates equal to a percentage of the Medicare reimbursement rates and to recommend those rates to the Division of Insurance. Since its inception, HPC has been charged with monitoring health care spending growth in Massachusetts and providing data-driven policy recommendations regarding health care delivery and payment system reform. The HPC’s mission is to advance a more transparent, accountable, and innovative health care system through independent policy leadership and innovative investment programs. To that end, HPC has played a tremendously valuable role in health care cost containment in the Commonwealth, largely through its role as a convener and policy leader. Setting reimbursement rates has not been and should not be within the purview of HPC, as it could hinder the HPC’s ability to continue to provide independent policy leadership.
Perhaps more importantly, Medicare reimbursement rates alone are an inappropriate benchmark for payment by commercial insurers, and the physician community opposes this proposal, as it will have dramatically negative effects on the sustainability of many physician practices and health care institutions, ultimately jeopardizing access to care in many underserved areas. Medicare is not currently, and was never intended to be, a broadly applicable index for commercial physician payment, as Medicare rates have no relationship to fair market value or the cost of care and are based on federal budgetary considerations rather than on an appropriate valuation of the services provided.1 Importantly, there is no indication in H.4134 that HPC is authorized to recommend differing payment levels based on the physician’s specialty or the services provided, yet there is significant variation in the relative price of services across specialties billing Medicare.2
The use of a percentage of Medicare rates is likely to be below market rate and insufficient to adequately reimburse services; this disparity will have implications beyond just underpayment for the current instances of unavoidable out-of-network care. A default rate that is substantially below market value gives insurers undue leverage, with little incentive to negotiate in good faith with physician practices, knowing that any resulting out-of-network scenario would be reimbursed at a significantly lower default OON rate. In such circumstances, negotiations quickly become a “take it or leave it” proposition, allowing insurers to lower their in-network rates each year and pressuring physicians to accept their rates without any recourse. This proposal could lead to reduced rates for all care, which would significantly jeopardize the sustainability of many physician practices, threatening access to care for patients across the Commonwealth.
Here, California’s experience is instructive, demonstrating the concerning consequences of legislation that fails to provide a balanced solution. California passed an OON law that similarly gave insurers undue leverage by using the greater of an in-network benchmark determined exclusively by the insurers and 125% of Medicare rates, which has removed any real incentive for insurers to negotiate in good faith with physicians. While the law has succeeded in protecting patients from balance billing, a truly important feat, the effect on cost-savings are generally unknown; the law has seemingly failed in encouraging more physicians to contract in-network, which in the long term will result in more limited networks, increased deductibles, and decreased access to care for patients. A June 2019 letter from the California Medical Association details many of the unintended consequences of the California model. It includes multiple reports from physician groups of health plans, insurers, and their delegated entities taking advantage of the law by threatening or initiating terminations of long-standing contracts with physicians or demanding significant reductions in their reimbursement rates.3
Moreover, DOI is authorized to summarily reject HPC’s recommendation and implement its own payment level for OON bills by simply notifying the legislature of its reasons for rejection. DOI is not similarly required to consider various factors in determining rates, and there is no recourse if DOI rates appear arbitrary or insufficient. In fact, there is no process to appeal or resolve inadequate rates proposals, which is critical to mediate exceptional circumstances where there is disagreement regarding appropriate, reasonable rates of reimbursement.
The Medical Society supports provisions within an out-of-network solution that promote transparency, which can help prevent OON billing. However, certain notice provisions in H.4134 (section 68) will necessarily increase administrative burden in an already complex and burdensome health care delivery system. Requiring 48-hour advance-notice of network status and costs for all scheduled admissions, procedures, or services is not always feasible and is wholly impracticable for same-day appointments and services. Under these provisions, a primary care physician ordering lab testing would have to determine whether the pathologist is in-network, which will greatly increase administrative burden on physicians and cost to the system.
The physician community remains committed to finding a comprehensive, sustainable solution to protect patients from receiving unavoidable out-of-network bills and believes that the best legislative approach includes a default formula for reimbursement of unavoidable out-of-network care that is based upon a percentile of average charges for a given procedure or service, in the same geographic area, as determined by a third party, independent, transparent non-profit data base such as Fair Health. This approach would promote a sustainable, transparent solution that fairly reimburses physicians for their services. It would also entail an independent dispute resolution process for when disagreements arise.
A similar approach has been shown to be effective in New York. In over four years since the New York law has gone into effect, data and experience have shown that this model has saved consumers over $400 million, reduced surprise billing by 34%, incentivized negotiations between physicians and insurers ensuring a healthy market place, and reduced health care spending as defined through decreased payments to physicians and the lowest premium increases in the nation.4
Telemedicine
The Medical Society appreciates several provisions in H.4134 relative to establishing a framework for telemedicine in the Commonwealth and believes that the single most important step that the legislature can take in facilitating telemedicine throughout the state is to require appropriate insurance coverage and to ensure proper reimbursement for telemedicine services. MMS appreciates H.4134’s thoughtful, comprehensive definition of telemedicine, which importantly includes asynchronous technology, and its inclusion of parity in coverage for services delivered via telemedicine. Critically, H.4134 lacks parity in reimbursement, which is necessary to support investment in technology, staffing, and physician time. At its core, the use of telemedicine is about expanding access to care for patients, and without parity in reimbursement, there will be no meaningful expansion of telemedicine.
Additionally, the MMS find it unfortunate that this proposal does not extend telemedicine coverage requirements and parity to the MassHealth program, excluding MassHealth patients from the promise of improved access and quality of care extended to commercial patients. Lastly, the telemedicine framework in H.4134 could be strengthened by allowing for proxy credentialing and adding certain patient protections, including prohibiting required documentation of a barrier to an in-person visit and prohibiting limitations on setting where telemedicine services can be provided, therefore enabling geographic limitations.
Prescription Drugs
Prescription drug costs are a major impediment to patients’ access to medically indicated care and a high priority for the Medical Society. For the physician community, the high costs of prescription drugs do not just strain global budgets or large systems, they impact patients directly and prevent patients from achieving the highest attainable standard of health and quality of life. House bill 4134 takes strong steps to address soaring prescription drug costs in the private market by imposing transparency and accountability in the pharmaceutical industry, specifically for manufacturers, pharmacy benefit managers (PBMs), and pharmacists.
The Medical Society supports provisions that shed light on the opaque pharmaceutical pricing process, subject pharmaceutical manufacturers and PBMs to the Health Policy Commission’s cost trends hearings, and impose strong penalties on excessively priced drugs. These provisions could be strengthened with the inclusion of a public hearing as part of the accountability process in order to further incentivize manufacturers to work with HPC to find a fair and reasonable resolution regarding highly or excessively priced drugs.
Physicians are keenly aware of the value of prescription drugs and their development–innovation in pharmaceutical medicine helps physicians to improve patient outcomes and quality of life–but when those gains are threatened because the cost of medicine becomes a substantial barrier, we know the system is flawed and in need of reform. Overall, these provisions in H.4134 strike an appropriate balance that will support innovation while ensuring prescription drugs are affordable.
MMS opposes section 145, which repeals an existing statute that prohibits carriers from requiring a provider to participate in a new select network or tiered network plan that the carrier introduces. In effect, this section would allow carriers to create a new network plan and contractually mandate providers to opt-in.
Scope of Practice
The current laws and regulations in Massachusetts maintain an important balance between ensuring access to high quality care while allowing independence and flexibility for nurse practitioners to treat patients. Patients in Massachusetts present with a wide range of acuity—some with common urgent care needs and others with far more complex comorbidities, undiagnosed conditions, or other complications. For many routine clinical encounters, nurse practitioners possess the requisite education and training to treat patients, but the added expertise of licensed physicians, acquired through extensive education and rigorous training—which includes four years of medical school and an additional three to seven years of residency training—undoubtedly provides a safeguard that patients deserve. The Medical Society believes it prudent, in the interest of sensible protection of patients in the Commonwealth, for the legislature to ensure that these established relationships with physicians are available for purposes of consultation on these complex cases.
The current laws and regulations provide extensive independence for NPs. These laws and regulations do not require NPs to work under the active supervision of physicians; there is no longer a requirement that a physician even be present at the location where the NP is practicing. Furthermore, physicians are not required to perform regular chart reviews for patients seen by nurse practitioners. The only physician oversight requirement that remains today is for the mutual development of prescribing guidelines. Resultantly, nurse practitioners are already able to prescribe medications in accordance with these prescribing guidelines. Data indicate that NPs have higher rates of inappropriate prescribing, unnecessary orders for diagnostic imaging tests, and lower quality referrals to specialists, all of which contribute to increasing costs of care. Aside from developing prescribing guidelines alongside a physician, NPs otherwise have wide latitude to treat patients as needed. Meanwhile, patients maintain the safeguard of a relationship with a physician for instances when additional consultation is warranted. That relationship is the full extent of physician oversight required by current laws and regulations.
The Medical Society is concerned that H.4134 could incidentally result in a two-tiered medical system wherein patients seen by physicians would be protected by laws and regulations assuring the highest quality of care, while patients cared for by non-physician providers would not be afforded the same level of protections. Over many years, this legislature, in fulfilling its duty to protect patients of the Commonwealth, has diligently established a thoughtful, patient-focused framework of policies and statutory requirements that apply to physicians. Allowing non-physician providers to practice wholly independently would undermine these critical patient protections. Specifically, the Medical Society points to the statutory requirement that all physicians complete a medical residency, to the continuing medical education requirement of 100 hours per license cycle, and to the public physician profile requirement as important measures the legislature has enacted to protect patients. Care provided by independent non-physician practitioners would not be subject to these same patient protections.
The Board of Registration in Medicine also provides important protections to patients cared for by physicians through its stringent practice requirements, thoroughness in its licensure process, and the sophistication and resources of its investigatory unit. If completely independent practice is to be granted to non-physician providers, licensure boards for these professionals must possess similar expertise and resources to understand and uphold the standard of care that is provided by physicians. The Medical Society is concerned that patients seen by non-physicians would lack the same standard of care, legal protections, and quality assurances that patients seen by physicians experience.
The Medical Society supports the provision of health care services by a physician-led team of health care professionals who work collaboratively to deliver the highest quality patient care. This team-based approach, working alongside patients and families, helps to achieve shared goals within and across care settings in order to promote coordinated, high-quality, patient-centered care. The physicians of the Massachusetts Medical Society value the important care that all members of the health care team provide to patients. Accordingly, we support the current constitution of team-based care that already sees nurse practitioners provide clinical care on a largely independent basis with physician guidance available as needed. As health care is increasingly delivered in collaborative settings, the Medical Society believes that nurse practitioners should continue to engage in this critical, independent, day-to-day clinical care. Patients, however, should continue to the benefit from the law’s longstanding patient protections that safeguard the highest quality of health care. Our current laws do just that by ensuring nurse practitioners have established relationships with physicians who remain available to offer consultation or collaboration for the most complex cases. H.4134 would disrupt this important balance and eliminate critical patient protections, and, for that reason, the Medical Society is opposed to the expansion of scope of practice standards contained therein.
HPC Enforcement
H.4134 vests the Health Policy Commission with enforcement authority over failures to meet the primary care and behavioral health expenditure target and failures to meet the health care spending growth benchmark, and it does so without regard for the Commonwealth’s overall performance relative to these measures all the way down to the individual provider level. While the Medical Society supports the overall intent of portions of this bill to monitor health care cost growth, we believe that the enforcement mechanisms in place at present are better suited than those proposed in H.4134 to prevent excessive and inappropriate expenditure. When considering the potential for enforcement at such a minute locus, alongside the mandate for primary care and behavioral health expenditure increases, the vague language of enforcement authority with which the HPC is entrusted becomes worrisome for its lack of notification to providers and provider organizations regarding exactly what will be expected of them and how they will be held accountable. Requiring HPC to enforce standards for expenditures goes beyond the scope of the original intent of that entity and inextricably implicates the Commission into the industry for which it is instead meant to be a policy advisor and leader. This level of involvement seems contradictory to both the Commission’s history and mission.
Furthermore, the tension between a mandate to increase expenditures and a limitation of expenditure growth can be reconciled only at a systemic level. When operating within such a zero-sum game, it is incompatible to charge individuals within the system with the responsibility to play both sides. It is only upon taking a broader view of the diversified factors that one can properly diagnose contributions to the failures in the system. H.4134 significantly expands the definition of who is considered a “health care entity”–and who may therefore be subject to penalties—by removing a long-standing exemption for small practices with fewer than 15,000 patients or providers who receive less than $25 million in annual net patient service revenue. As a result, under H.4134, small practices and individual providers could be punitively penalized for growth in their practice or specialization that is not in accord with the mandate for primary care and behavioral health expenditure. Under H.4134, HPC has the ability to bypass the imposition of a performance improvement plan and levy financial penalties when such a plan is “not an appropriate remedy” to address the expenditure failures. Without an explanation of what constitutes an appropriate remedy, physician practices and individual physicians and health care organizations are left only to wonder how a change in their patient population or practice constitution may affect them financially.
Currently, systemic failure to meet the statewide expenditure target is addressed by authorizing the HPC to mandate the development of a performance improvement plan that aims to fix the ails of larger health care entities. As presently defined, a “health care entity” that is subject to expenditure enforcement methods must serve larger populations and maintain larger revenues. Focusing performance improvement efforts on such entities is appropriate, as cost growth is less variable, and it is that stability that makes expenditure targets more appropriate for them. Regardless of the target of the enforcement, the mechanism must also serve the purpose of the mandate. The Medical Society believes that the current law provides such a mechanism in the performance improvement plans, which force entities to investigate issues, diagnose problems, and develop plans to improve their financial performance. This approach is far less punitive than financial penalties in that it keeps an eye toward improvement rather than punishment.
Consequently, the Medical Society opposes placing the HPC into an enforcement role, levying financial penalties as a first-level punishment, and broadening the definition of ‘health care entity.’ These changes, when taken together, pose substantial challenges to physicians and small practices regarding the sustainability of practice and managing the growth or other development of their practices.
The Medical Society commends the Governor on his steadfast dedication to health care cost containment and greatly appreciates the opportunity to provide comment on this comprehensive, thoughtful legislation. We look forward to continuing to engage with the legislature and other key stakeholders to find the best path forward to constrain health care costs and promote a system that continues to provide high-quality care for the patients of the Commonwealth.
