The Massachusetts Medical Society wishes to be recorded in
opposition to H.1179, An Act Relative to Hospital Billing and Licensure. This bill would require health care facilities
and physician practices that provide services at a secondary facility over 500
yards away from the primary facility to have a separate license, tax
identification number (TIN) and national provider identification (NPI) numbers.
It further would require the secondary facility to apply for a Determination of
Need certificate, to establish separate contracts with public and private
health insurers and to negotiate separate rates from the parent facility. If
the secondary facility does not have a contract with a particular insurer, the
rate of reimbursement for Out of Network services would be statutorily set at 110%
of Medicare.
This legislation is ill-advised and counter productive to the
Commonwealth’s efforts to reduce health care costs. It would unnecessarily increase
the administrative burden and costs for physicians by requiring the
establishment of new legal entities, new tax identification numbers and separate
contracts with insurers.
Administrative complexity has been identified by the Health
Policy Commission as a driver of health care cost increases. In its 2018 Annual Health Care Cost Trends
report, the HPC states “The Commonwealth should take action to identify and
address areas of administrative complexity that adds cost to the health care
system without improving the value or accessibility of care. Specific areas of
focus should include complexity of payment arrangements, insurance billing and
coding, risk adjustment, quality measurement reporting, provider credentialing,
and the use of electronic health records.” H.1179, if passed, is completely contrary to
those goals.
The MMS is also strongly opposed to the provision that out
of network services be reimbursed at 110% of Medicare. Medicare was never
intended to become the foundation for “fair” reimbursement. Medicare rates have
no relationship to fair market value or the cost of care and are based on federal
budgetary considerations rather than on what physicians have been customarily
paid. To implement Medicare reimbursement, or even a system based on a modicum
reimbursement factor above Medicare rates, would be detrimental to many physician
office practices throughout Massachusetts and could reduce access to care.
For all of the above reasons, the MMS urges the Committee on
Health Care Financing to report this bill out “ought not to pass.”
