Defeat of a Michigan bill that would have cost physicians three percent of their gross revenue continues to cause discord between opponents who argue the tax unfairly singles out doctors and supporters who say their Medicaid system could collapse without it.
The Michigan Senate voted down the Quality Assurance Assessment Program, or “QAAP,” in October, prompting many EPs, including members of the American Academy of Emergency Medicine, to applaud the legislature's move.
But QAAP proponents said the program wasn't simply a tax but also a match that would have enabled the state to draw federal money for health care, said Earl Reisdorff, MD, the director of medical education at Ingham Regional Medical Center in Lansing and a member of the Michigan College of Emergency Physicians. The “physician tax” label slapped on the bill was partly responsible for its failure, he said. “People hear ‘tax,’ and there's an instant visceral reaction.”
Philosophy vs. Practicality
The QAAP involves more complicated issues than just these seeming semantics. Although physicians would have had to pay three percent of their gross revenues to the state, the total would have been matched by federal dollars and used to finance Medicaid physician reimbursement and its administration.
In real-world terms, the three percent assessment on physician income would have raised about $300 million, which the federal government would have matched with $822 million, said Dr. Reisdorff, a figure formulated based on the current match rate. About $716 million would have come back to physicians in the form of Medicaid physician reimbursement, he added.
This boost essentially would have “increased payments for Medicaid services to Medicare rates,” said James Fox, MD, the managing director of Midwest Emergency Services and an MCEP member. It would apply to all physicians who see Medicaid patients, among whom EPs figure prominently, and would have increased access to emergency clinicians and subspecialists, he added.
QAAP supporters viewed the program as a practical answer to Michigan's economic situation, which Dr. Fox described as “brutal.” The unemployment rate in Michigan for the last half of 2009 hovered around 15 percent, while the national rate held closer to 10 percent, according to the U.S. Bureau of Labor Statistics.
MCEP's board of directors realized “how stressed the Michigan economy is and how that translates into the state's budget, and that if medicine doesn't find an alternative or supplemental mechanism for funding, there will be a disastrous meltdown in Medicaid,” said Dr. Reisdorff.
On the opposing side, the Michigan State Medical Society and AAEM rejected the idea of any tax “levied on physicians,” said Larry Weiss, MD, JD, the immediate past president of AAEM and a professor of emergency medicine at the University of Maryland. Though government affairs are typically first considered by committee, AAEM took a stand on the QAAP after concerned members asked for the group's help, he added.
Medicaid is a “general societal benefit, and all of society should bear the burden, not just physicians,” Dr. Weiss said, likening the QAAP to a tax imposed on teachers employed by the public school system. “Philosophically, we believe far more important issues are involved” than a higher net income for physicians. Had such a bill passed, for example, one could imagine other states entertaining similar legislation, he said.
A physician tax also would drive doctors out of the state and make it difficult to attract new ones, which would limit patient access, he said.
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This isn't the first time Michigan has seen the QAAP, and some hope it's not the last. The program was first developed in 2002 by then-Republican Governor John Engler, and Michigan's hospitals were the first group to participate, according to Dr. Fox. Since then, Michigan's nursing homes, too, have adopted the QAAP.
The initial attempt in 2005 to extend the QAAP to doctors failed, said Michigan Senator Mickey Switalski, a Democrat and QAAP supporter. After a second defeat, this past October, a QAAP for physicians “would have a rough road,” he said. While he won't say its passage is impossible, he acknowledged that physicians are the lynchpin. “I think unless the doctors change their minds, it would not be possible to pass it in Michigan,” he said.
The QAAP, however, was not the only issue at stake with this legislation. Typically, in Michigan, Republicans want medical malpractice reform, and Democrats are for the QAAP and higher spending on Medicaid, said Dr. Reisdorff.
Because the program was creating such angst in the physician community, pro-QAAP legislators seeking to find common ground worked to extend the Good Samaritan law to cover emergency services, which would have changed the tort standard from simple to gross negligence, said Dr. Fox. In fact, Sen. Switalski is a cosponsor of such a bill.
“Had Michigan adopted the QAAP, Democrats would be more likely to be amenable to tort reform,” Dr. Reisdorff said.
Regardless of past legislative action, MCEP and AAEM are steadfast in their QAAP positions. “You don't win them all, and sometimes you have to run things up the flagpole several times before you get a win,” Dr. Fox said. On the other hand, AAEM looks at each bill individually, but would philosophically continue to oppose taxes aimed at physicians, according to Dr. Weiss.
Sen. Switalski said he still hopes that some can be swayed, and he urged physicians opposed to the QAAP to let him know what would make the program more palatable. In the meantime, the legislature will have to look at other ways to trim the budget and provide better Medicaid service, he said. “What we find is that as we cut the rate back, it drives people to the emergency department. It's not a good situation,” the senator said.
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