October 19, 2009

IN THIS ISSUE

Editor's Column: Health Care And Horse Sense
Physician Tax Will Drive Doctors From Michigan
Physician Tax Would Be Unhealthy
In My Opinion: A Critique Of The Physician Tax Bill
Informative Breakfast Seminar Oct. 27
AMA Reform Update
HFHS, DMC To Collaborate On Dialysis Center
2009 Holiday Party Contributors

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Editor's Column: Health Care And Horse Sense

By JOSEPH WEISS, MD
Individuals with their hearts set on a public option for health care reform should not fret at the present turn of events. Don’t worry that Senate Democrats have eliminated a government-run health care plan from the reform bill. Rather, advocates for a government-run program should see the omission as a victory.

No health care reform will hold down the cost of care; no action to date by private health care companies or Medicare has stopped the cost from rising. No health consultant has a workable plan to hold down expense, and whatever praise one wants to heap on the Mayo Clinic, the Cleveland Clinic, or Kaiser, the bills these institutions present to insurance companies are whoppers.

Furthermore, the elderly who claim that health care reform will rob them of their Medicare benefits are foolish fellows. The elderly are losing their benefits now, under the present system of care. On Oct. 2, BCBS sent letters to all Medicare recipients covered under BCBS Advantage Option C and Option D stating that Blue Cross would drop Option C and D starting Jan. 1, 2010. From that time onward, BCBS will only offer Option A or B. These options, compared to Options C and D, require the Medicare recipient to pay greater co-pays, more of their hospital costs, and far more for prescription drugs. Whereas Option C cost $194 the cost for Option B will be $248 a month. Thus, even without new health care reform legislation, the private insurance companies the conservatives so greatly trust are handing seniors fewer benefits at a higher cost.

But no one need accuse the insurance company of participating in greed, excess gains, or unseemly executive pay. The problem is not the profit from care but the cost of it.

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Physician Tax Will Drive Doctors From Michigan

Editor’s Note: The following is an op ed piece published in the Detroit News Oct. 14. It is reprinted here with permission.

By RICHARD SMITH, MD
Every Michigan citizen would suffer the consequences if Michigan imposes an additional tax on physicians to subsidize the state’s Medicaid program. Access to good-quality health care in Michigan will begin to diminish significantly.

After the Michigan House approved a 3 percent tax on physicians’ gross receipts, the Michigan State Medical Society surveyed its members. Physicians of all ages indicated they would seriously consider leaving Michigan, and older physicians indicated they would retire earlier than planned.

Others said it is already extremely difficult to recruit physicians to Michigan and that a 3 percent tax on gross receipts would make it nearly impossible.

For a young physician coming out of one of Michigan’s superior medical schools and residency training programs, already carrying an average student loan debt of $200,000, a physician tax would be one more reason to leave Michigan. This would add to Michigan’s already projected shortage of 4,000 to 6,000 physicians by 2020.

Michigan is home to some of the best physicians and physician scientists in America. Health care provides more than a half-million jobs in Michigan.

Physicians take their mission seriously: They want to help people. Doctors provide millions of dollars in uncompensated care and serve as the safety net for our most vulnerable citizens. To provide the best care possible, they set up an infrastructure of an office building, equipment and staff.

What the Legislature and governor don’t always understand is that physician practices face the same economic pressures as every small business in Michigan. They pay employees’ health care premiums and medical liability insurance. They also pay income taxes as well as the Michigan Business Tax.

During the past three decades, Michigan’s Medicaid budget has been continually raided to pay for other items in the state budget. Most physicians don’t trust the fuzzy math of proponents who argue that a physician tax will pay for itself by treating more Medicaid-eligible patients. It will end up costing doctors but not improving Medicaid access.

Medicaid is a societal issue that should be funded appropriately by our elected leaders, not through expedient, short-sighted and politically motivated games that will undermine Michigan’s health care system.

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Physician Tax Would Be Unhealthy

Editor’s Note: The following is a Detroit News editorial that appeared in the News’ Oct. 14 edition. It is reprinted here with permission.

Michigan doctors would be hit with a 3 percent gross receipts tax under a plan by House Democrats to create new state revenues and avoid some of the painful cuts in the 2010 state budget. This poorly considered plan to revise an already passed departmental budget for community health, shifting more of the cost of Medicaid from the state to the federal government, should be dropped.

The goal is to leverage additional federal funds with the state physician tax. The proposal is strongly opposed by the state's two major physician organizations, which point out that doctors already pay income, personal property, small business and sales taxes.

They see it as a hindrance to physician recruitment and are rightly skeptical the promised federal bounty would materialize, once they've anted up the $300 million to $400 million this proposed levy is designed to raise. Skepticism is understandable when lawmakers continue to shift funds around and dream up boutique taxes to balance the budget without making needed government reforms.

The proposal, passed by the House last week, would levy what's described as a quality assurance assessment fee on more than 28,000 doctors. To boost their federal Medicaid allotment, Michigan and other states already impose similar taxes on health maintenance organizations, nursing homes, hospitals and community mental health agencies.

But West Virginia apparently is the only state that also taxes physicians in this way. In a survey by the National Conference of State Legislatures, West Virginia reported that its 2 percent fee has declined gradually since 2001 and is to be phased out in 2010.

The arguments in favor of the new tax here are that it would net Michigan $525 million in added federal revenue, help to avoid an 8 percent cut in the community health budget for 2010 and allow a higher rate of return for doctors treating Medicaid patients.

Many Michigan doctors have become reluctant to treat Medicaid patients because -- they say -- they now are reimbursed for as little as 35 percent of their actual costs. The percentage of Michigan physicians accepting Medicaid patients has shrunk to 55 percent from 88 percent in the last couple of decades.

And that's precisely the problem with this plan. Proponents claim that doctors whose proportion of Medicaid patients exceeds 4 percent would gain back more than the new tax would cost them. But the state also would have its hands in the pockets of many doctors who see very few Medicaid patients. They would have to absorb this costly new tax or pass its cost on in the form of higher rates for their services.

Could there be a bigger incentive to leave the state? Could there be a bigger disincentive for newly licensed physicians to set up practice here?

No doubt, doctors who care for Medicaid patients deserve better compensation. Given time, policy-makers perhaps can create a way of doing that without using an unfair doctor tax as their ATM. What Michigan doesn't need is a reason for more of its professionals to flee to other states that have lower taxes.

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In My Opinion: A Critique Of The Physician Tax Bill

Editor’s Note: The following is a detailed response to the physician tax bill (HB 5386) recently passed by the Michigan House of Representatives. We chose to publish the entire analysis because, in addition to it providing valuable information for working physicians, it shows just how difficult and time consuming it is for those affected by complex legislation to gain an understanding of how it will affect them; let alone recommend change. For a summary of that legislation, the bill’s actual text in full and information on the bill’s status, please visit: http://www.legislature.mi.gov/(S(5y1j14bxrmrcshzj2qpfbq45))/mileg.aspx?page=BillStatus&objectname=2009-HB-5386

By JAMES FORDYCE, MD
I have read and re-read the final version of the bill passed October 6. Some observations from a practicing physician standpoint:

Section 2: Quality Assurance Assessment: This is a very misleading title. This legislation has NOTHING to do with medical quality or quality assurance. Honesty and being precise without misleading titles should be a hallmark of every piece of legislation. As a physician with a long history of quality assurance involvement at my hospital and other venues, I view this is as a false, misleading, and inappropriate name for this assessment.

Section 3: The increased Medicaid physician services reimbursement rate under this section raises questions. What are the increased rates? Nowhere in this bill is there any mention of actual reimbursement rate. Are we to depend upon other, to-be-determined, legislation?

Section 4: Obviously there will be a cost to the Medicaid program to administer this section, but also a significant cost to the physicians and their entities to file these forms and meet deadlines, etc. My experience with anything to do with state or federal forms requires a professional accountant and, in many cases, attorney review – more costs to me. If an entity is a separate office, i.e., physician partnership/ownership in an infusion or dialysis or surgery center, etc., the cost of meeting these requirements is doubled or tripled for individual physicians. I doubt ANY legislation ends up with negative administrative costs.

Section 5: According to this, any physician having gross receipts of less than $66666.67 per year is exempt. Assuming overhead in any physician practice is about 50 percent, this physician is taking home a net salary of about $33333.33. I truly doubt there is a full-time practicing physician in Michigan in this situation and, if this person does exist and has to file reports as required, his net salary is still lowered!

Section 6: I have read this over and over and, frankly, have not a clue as to what it means or any clear cut ramifications – another job for my legal counsel.

Section 7: Physicians practicing with offices in both Michigan and adjoining states will simply close the Michigan office, forcing patients to travel to adjoining states to see their attending physician. Perhaps not a huge burden on patients in the Lower Peninsula, but our patients in the Upper Peninsula may find that very difficult – e specially in the winter months – for their oncology treatment, dialysis, surgery, etc. This is clearly not an inducement for border physicians to stay open or provide services in Michigan – a potential restriction of access to care.

Section 8: In 31-plus years of practice in a P.C. in Michigan, I do not recall being able to write off patients who have not paid due bills. I have simply written them off. I have only excused two patients in 31 years because of refusal to pay for services, one of whom was a foreign embassy representative who told me he was entitled by law to free care from me. I have simply eaten and written off  bad debts.

Section 9: Again, where is the rate increase guarantee in this bill? I hear 8 percent increase bandied about. Still, a final rate lower than private and federal entities. A 13.2 percent kick in addition to the present cost of administration sounds logical-but does that include the increased cost to administer THIS Bill. Also, I hate to be suspicious, but I do not appreciate any guarantee in this section that ALL matching federal funds will end up in the newly formed Michigan Health Care Rebate Fund. Implied guarantees have not always been met, and there is no language here that reassures me at all.

Section 10: The assurance that none of the remaining monies in the fund at the end of the fiscal year revert to the general fund is encouraging, but please see my comments on Section 9.

Section 11: Seems to undo whatever was written in Section 6. Physicians may have a partial ownership of centers that I listed in Section 4. Being taxed on these entities in addition to personal gross income is an incentive to get out of these centers, which may provide services not available locally by hospitals. Again, this means more accounting costs and reasons to get out of various physician-owned medical centers, limiting access to care for not only Medicaid recipients, BUT POTENTIALLY FOR EVERYONE IN MICHIGAN.

Section 12: I, like many physicians in Michigan, belong to preferred provider groups that have contracted with various insurance programs. This means that PPO-type organizations organized and run by physicians or other entities receive an additional tax on organizations that they are encouraged to form and participate in to achieve better control of medical costs. I fail to see any logic here.

Section 13: As much as I respect the role of a Registered Nurse Practitioner, Nurse Midwife, and CRNA – these individuals provide services in Michigan and there is no requirement for supervision of these individuals in the Health code – they receive payment from state, federal and private payers, yet are not included under this bill since they are not subject to direct supervision or control by a physician.

Rep. Corriveau, you can see that I, as a practicing physician, cannot find one bright spot in this bill, either for Medicaid recipients, other patients, or the Michigan physicians who attend them. I see Medicaid patients as a specialist, and about 5-7 percent of my gross income comes from Medicaid. This bill taxes this percentage of gross, so, in reality, reimbursement is less. You state that I then will receive a higher reimbursement, part of which is from both my own assessment and assessment on the efforts of my fellow physicians. I do not see any guarantee, and I fear my administrative costs under this bill will wipe out any increase I may receive. You speak of high overhead and tax credits, BUT THIS BILL DOES NOT ADDRESS OVERHEAD AT ALL. The surgicenters, dialysis centers, etc. still are taxed on GROSS PROCEEDS! All physicians have high overhead – our Michigan small business tax and higher medical liability premiums are added to the cost of medications and supplies, administration, salaries and benefits of employees, rent, property taxes, cost of Continuing Medical Credits required for Medical License, hospital staff fees, compliance costs mandated by state and federal legislation, biologic waste removal, mandated procedures, etc., etc., etc. We all realize that Michigan is in dire financial straits.

I see Medicaid patients because SOMEONE has to see patients who cannot afford insurance. I see patients in need for free who cannot qualify for Medicaid or other programs. Many physicians do the same. TO SINGLE OUT ONE PROFESSION TO COVER MEDICAID PROGRAMS IS NOT ONLY UNFAIR AND ILLOGICAL; I VIEW IT AS AN INSULT TO ME AND MY PROFESSION.

Being told to be more generous and stop complaining by a legislator (as heard on the morning radio Oct. 16) reinforces my feeling that the Michigan Legislature does not appreciate or respect the efforts of the medical community of this state. I was born, received three degrees, did postgraduate training, and have lived and practiced medicine entirely in MY State of Michigan. I worry about present and future access to care. The residents-in-training in our state and others are very aware of the practice climate in Michigan, only one of 13 physicians-in-training in the last few years spending training time in my office planned on staying in Michigan. As Chairman of the Health Policy Committee, you should be acutely aware of the problems recruiting general and specialist physicians to our state and access to care. I am worried about finding a physician to replace me when I can retire. I FEEL EVERYONE SHOULD BE CONCERNED WITH FUTURE ACCESS TO CARE BY ALL CITIZENS OF MICHIGAN. I know that tough times require tough decisions, but the passage of this bill is ill-advised, unfair, and has future adverse ramifications for health care in our state. I appreciate your invitation to continue to share to my views on this subject with you. I will continue to share them with you, my patients, and others.

These are my personal views, which, I am sure, are shared by other physicians. I know you and other legislators are receiving the views of Organized Medicine, which I, as an active member, in general support. When I started my journey as a physician, I took an oath to "do no harm.” I respectfully submit that those in government should follow the same dictum.

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Informative Breakfast Seminar Oct. 27

The Wayne County Medical Society of Southeast Michigan along with the Michigan State Medical Society is presenting a complimentary breakfast seminar on October 27, 2009 at the Doubletree Hotel in Detroit, MI. This seminar is being offered to all Office and Business Managers.

Topics will include:

Legislative Issues - Josh Richmond, MSMS

Billing/ Reimbursement Issues - Laurie Latvis, BCBS

Bill/Policy Update - Stacie Saylor & Stacey Hettiger, MSMS

MSMS Connect - Dara Barrera, MSMS, Physician Services Inc.

October 27th, 2009

7:30am-9:00am

Doubletree Hotel—Downtown Detroit

525 West Lafayette Blvd.

Detroit, MI 48226

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AMA Reform Update

Editor’s Note: The following is from Oct. 13 and reflects the AMA’s critique of the health care reform bill as passed by the Senate Finance Committee, as well as update on activities in the House.

The US Senate Finance Committee concluded its markup (Oct. 13) and voted 14-9 to approve its draft health system reform proposal. Sen. Olympia Snowe (R-Maine) joined the panel's Democrats to support the proposal; all other committee Republicans voted against it. While it's possible that Senate floor action could begin next week, many observers anticipate the full Senate will not take up health reform legislation until the week of Oct. 26. The Senate leadership is working to merge the committee's proposal with one passed last July by the Senate Committee on Health, Education, Labor, and Pensions.

The AMA continues to urge state and specialty societies to contact their senators to secure changes in the Senate proposal on the following three issues:

• Repealing the sustainable growth rate (SGR) formula
• Inequitable treatment of physician services under the proposed Independent Medicare Advisory Commission
• Arbitrary Medicare payment reductions for physicians who are "outliers" in resource use

Talking points on each of these issues are available on the AMA's health system reform Web site under "Resources for physicians."

Visit the AMA's Grassroots Action Center to send an e-mail to your senator or to join the Physicians' Grassroots Network. Also, the AMA grassroots hotline at (800) 833-6354 can connect you directly to your senator's office.

House leadership maintains commitment to SGR repeal

Leaders in the U.S. House of Representatives continue their efforts to blend amendments adopted by three separate committees into a single health system reform bill for consideration on the House floor. However, because of budgetary concerns, the House leadership has been challenged to craft a bill that does not add to the federal deficit. The House leadership is considering alternative strategies for passing the SGR repeal. Such a strategy could include passing separate Medicare physician payment reform legislation and merging it into a comprehensive health system reform bill for consideration during a House-Senate conference committee.

The AMA continues to maintain that repealing the SGR is essential to the success of any health system reform legislation. The AMA has been assured as recently as today that the House leadership remains firmly committed to passage of a permanent repeal this year.

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HFHS, DMC To Collaborate On Dialysis Center

Henry Ford Health System, Detroit Medical Center’s Sinai-Grace Hospital and Nephron Associates, a Southfield-based physician group, have agreed to build a $1.8 million dialysis center in Southfield, reported Crain’s Detroit Business Oct. 19.

Crain’s reported that the Northland Park Dialysis Center will be staffed by personnel from Greenfield Health Systems, a division of Henry Ford that operates other dialysis centers in the area. The 11,700-square-foot facility is scheduled to open in summer 2010.

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2009 Holiday Party Contributors

The following is a list of contributors to the WCMS Foundation’s 24^th Annual Holiday Party for underprivileged children. This year’s event is Dec. 5 at the New Detroit Science Center. For more information, or to contribute, call (313) 874-1360 or visit www.wcmssm.org

James A. Rowley, MD

Sion Soleymani, MD

Madjid Mesgarzadeh, MD

Dr. & Mrs. Allan Dobzyniak

Helene C. Dombrowski, MD

Drs. Lalitha and Babu R. Vemuri

Robert Brent, MD

William Knapp, MD

Nancy Goll

Elizabeth Edmond, MD

Benjamin Ramos, MD

Peter Cracchiolo

Robert Borchak, MD

Julian Alvarez, MD

Beth Ann Brooks, MD

Dr. & Mrs. Sajal Choudhury

William L. and Betty G. Knapp

Drs. Safwan Halabi & Razan Asbahi

Joe Weiss & Marilyn Shapiro

Dr. & Mrs. George C. Hill

Neela Sripathi

Homer M. Smathers, MD

Sidney Baskin, MD

John C. Somogyi, MD

Charla Blacker, MD

Todd R. Williams, MD

Iris and Fred Whitehouse

Joseph M. Beals, MD

Stephanie Flom, MD

Dr. & Mrs. Mark F. Pezda

Eudoro Coello, MD

Christopher W. Hughes, MD & Debra J. Hughes

Claus Petermann, MD

Richard D. Cieslak, MD

Daniel S. Moore

Drs. Peter & Alice Watson

Drs. Rachel and Brian Silver

Kathleen Yaremchuk, MD

Anne-Mare' Ice, MD

John M. Malone, MD

Anne Nachazel, MD

Eastside Surgical Specialists

Paul Mazzara, MD

Dr. Richard Pollard

Michael G. Taylor, MD, FACS

Drs. Kenneth & Deborah Granke

Aaron Lupovitch, MD

Keith P. Bartold, MD

Rev. William and Dr. Mary Logan

Scott Monson, MD

Arthur J. Frazier, MD

M. Natacha Umlauf, MD

Phyllis A. Vallee, MD

Michael Schaldenbrand, MD

Heidi R. Gunderson, DO

Paul J. Sullivan, MD

S.V. Mahadevan, MD

Indu & Bala Pai

Chris and Janet Bush

Eve M. VanEgmond, MD

Taufiek Alhadi, DO

Gwendolyn H. Parker, MD

Dr. Ray and Mrs. Marcia Littleton

Drs. Daniel & Margarita Morris

Dr. & Mrs. Laurence E. Stawick

Dr. & Mrs. John Calwell

S. Rao Talla, MD

Ghaus M. Malik, MD

Eastlake Pediatrics PC

Vernon F. Strand, MD and Jane P. Strand

Martin H. Daitch, MD

John Kurtz, MD

Dr. & Mrs. Dan Michael

Mohammed Arsiwala, MD

Livonia Urgent Care

Margaret Dowling, MD

Dr. S. Maitra

George Mogill, MD

Dr. MaryJean Schenk & David Fry

Dr. Grace Engler & Ms. Anna Fedor

Dr. & Mrs. Donald M. Ditmars Jr.

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