MONTPELIER — Two lawmakers from the Burlington area have introduced a bill that would provide consumers and regulators with more information about the market power of health systems.
Sens. Tim Ashe, D/P-Chittenden, and Michael Sirotkin, D-Chittenden, have introduced S.245, legislation that would require hospitals to notify state regulators and their patients every time the hospital buys a new independent practice.
Ashe told his colleagues in the Senate Health and Welfare Committee last week that the state should “get to the heart” of why hospitals are acquiring so many independent practices and whether the trend increases costs for Vermont’s health care system.
“What we’ve seen is practices purchased by hospitals in Vermont and elsewhere, and as a result the price paid by consumers goes up,” Ashe said. “And people scratch their heads and say, ‘What changed other than the letterhead on stationery, or the bills?’”
In the current health care system, commercial insurers pay hospital-affiliated doctors more than they pay independent doctors for the same services. Government payers are charged for additional fees for hospital facilities, even if the practice stays in the same building as it was before the acquisition.
According to data compiled by HealthFirst, an organization of independent doctors, Blue Cross Blue Shield of Vermont paid an independent physician $78 for a 15-minute office visit in 2014; a practice affiliated with the University of Vermont Medical Center was paid $177.
Under the major provisions of S.245, a hospital or hospital system would be required to send a letter out to patients within 30 days of the purchase. The letter would need to notify patients that the practice has been sold and, among other things, explain that the patient may need to pay more for the same services because of the sale.
(An amendment under consideration would move the reporting responsibility from the doctor to the parent hospital system.)
Hospitals and hospital systems would also be required to notify both the Vermont Attorney General and the Green Mountain Care Board at least 30 days before they finalize the purchase of an independent practice. The bill says the notification would help the Attorney General weed out monopolistic behavior.
Doctors who belong to hospital-owned practices must tell patients that if they need a referral they are not required to see another hospital-affiliated doctor. The doctor would also need to provide contact information for the patient’s insurance carrier so the patient could find out how much she would have to pay in out-of-pocket costs to see an affiliated provider.
Jill Olson, a vice president of the Vermont Association of Hospitals and Health Systems, said the bill creates logistical problems in its current form, and some of the new reporting requirements are already required under federal law.
“The Green Mountain Care Board already has a formal process in place where we have to notify them when a new practice becomes an employed practice, and that is something we have to do as it’s happening,” Olson said.
She said the bill would require a doctor’s office to use an actuarial analysis to figure out what services a patient gets before estimating how much the acquisition would increase the patient’s out-of-pocket costs. Olson said the federal government already requires certain reporting to Medicare.
Paul Harrington, director the Vermont Medical Society, which represents most doctors in the state, said the current version of the bill “would add significantly” to administrative burdens that doctors already say get in the way of their jobs.
“At some point we’ve got to stop,” Harrington said. “We’ve got to step back and say, ‘How much more time are we going to take from the finite hours available to physicians and other health professionals and adding additional administrative work?’ and instead let them use their extraordinary time and their dedication to providing clinical care to their patients.”
Paul Reiss, from HealthFirst, supports the bill. “It’s really about our patients having the knowledge about what the health care system costs, rather than obscuring that, rather than keeping it hidden from them,” he said in an interview.
The Senate Health and Welfare Committee plans to hear from the Green Mountain Care Board next week.