MEMORANDUM IN OPPOSITION to 9.63% HCRA SURCHARGE

ESTABLISHMENT OF A 9.63% HCRA SURCHARGE ON OFFICE-BASED SURGICAL AND RADIOLOGICAL PROCEDURES

As contained in the Governor’s Health Budget Art. VII bill (A.9708/S.6608)

This measure contained within the Health and Mental Hygiene Article VII bill would extend the 9.63% HCRA surcharge to services billed as surgery or radiology services which have been provided in physician offices or in urgent care facilities. The Medical Society of the State of New York opposes this provision and urges that that it be removed from the State Budget.

We agree that health insurance companies, which have made extraordinary profits over the last several years, must re-invest these profits back into the healthcare system.   They cannot continue to extract from the healthcare delivery system the equity in that system which is essential to its future growth.  In this regard, MSSNY supports the proposal contained in the proposed State Budget that would restore the authority of the State Insurance Department (SID) to approve proposed increases in health insurance premium rates, as well as increasing to 85% the minimum medical loss ratio for the nearly 2 million individuals enrolled in small group and individual health insurance policies.

However, while this surcharge would be imposed on the health insurer, not the physician, we are very concerned with the potential that this surcharge will simply be passed through to the physicians who are providing this care through substantial payment reductions and/or to their patients through imposition of higher cost-sharing obligations.  Simply put, individual physicians and even group practices lack sufficient leverage now enjoyed by much of the hospital sector to forestall or prevent a possible 9.63% cut in their payment which might be imposed by health insurers to offset the surcharge imposed on them.

Many physician practices today are barely solvent. There are a number of reasons for this, including rapidly escalating practice costs led by the extraordinary cost of medical liability insurance.  At the same time, physicians are confronted with declining practice revenue.  Radiologists in particular will suffer significant Medicare cuts as a result of the federal health care reform bill.  Already in every region of New York State, we are experiencing a significant shortage of critically needed physicians in a number of specialties.  The impact of this one proposal, if the proper protections are not established preventing health insurers from passing on these costs, could cause an even larger number of physicians to retire early, alter their practices, or relocate their practices outside of New York State.  Access to need surgical and radiological care must be protected.

Based upon the foregoing, your medical society opposes this component of the Governor’s Budget and urges that it be removed.

This entry was posted on Thursday, April 29th, 2010 at 1:48 pm and is filed under NEWS FROM THE NYS LEGISLATURE. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.