B ARBARA M ARX B ROCATO & A SSOCIATES
F OR T HE
M ARYLAND C HAPTER A MERICAN C OLLEGE OF E MERGENCY
P HYSICIANS (MD ACEP)
2009 Session Brief Recap: The Recession Session
The Governor and Legislature enacted a number of budget cuts, maneuvered funds from various
accounts and plugged in Federal Stimulus Funds to achieve a balanced budget for FY2010.
What has not been resolved this year is the projected shortfalls in future budgets (an estimated $1
billion shortfall in FY2011). There will be continuing discussions in the coming months over
revenue streams, shifting financial responsibilities (burdens), and potential for more cuts to
services and State agencies.
In these times of provider shortages and a fractured healthcare system, closer attention is being
paid to who has control of the healthcare dollars, and where and how they are being spent. This
session’s work on healthcare was extensive and explored all major components of the healthcare
environment: access to care (workforce); healthcare financing (Health Insurers-HMOs-MCOs,
physician reimbursement); healthcare delivery (scope of practice); public safety (Medevac);
medical/legal (malpractice liability, fraudulent health claims).
We developed the following “status report” on the major healthcare bills and issues from the
2009 Session, classifying them according to their potential impact on the current system.
Efforts to Repair Maryland’s Fractured Healthcare System
MEANINGFUL SOLUTIONS
Assignment of Benefits (Senate Bill 852/House Bill 1366)
FAILED TO PASS – SUBJECT OF STUDY BY JOINT COMMITTEE ON HEALTH CARE DELIVERY AND
FINANCING
MD ACEP Position: Support
Summary: Significant progress was made this Session. The level of discussion went far beyond
where it has gone in previous years. This issue will be the subject of intense study during the summer
by the Joint Legislative Committee on Health Care Delivery and Financing (Chaired by Senator Rob
Garagiola and Delegate Dan Morhaim)
Unfair Trade Practice (House Bill 734)
FAILED TO PASS
MD ACEP Position: Support
Summary: This bill would have prohibited a carrier from rejecting a hospital for participation on the
carrier’s provider panel or conditioning a hospital’s participation on the carrier’s provider panel based
on whether a provider with hospital privileges participates on the carrier’s provider panel. Violation
of this prohibition is an unfair method of competition and an unfair and deceptive act or practice in
18 P IN K N EY S TR E E T , A N NAP O LIS , MD 21401
P: 410-269-1503 * F: 410-269-5021 * B AR B AR A @ B MB A S S OC . C O M
the business of insurance. Delegate Shawn Tarrant, sponsor of the bill remains very interested in the
concept.
STEPS FORWARD
Health Maintenance Organizations - Out-of-Network Providers (Senate Bill 380/House Bill 255)
PASSED
MD ACEP Position: Monitored
Summary: These bills alter the rates that a health maintenance organization (HMO) must pay for a
covered service rendered to a HMO enrollee by certain noncontracting (out-of-network) health care
providers. Under current law, noncontracting providers must accept the amount defined in statute. The
bills also contain reporting and compliance mechanisms.
Loan Assistance Repayment for Practicing Physicians (House Bill 714/Senate Bill 627)
PASSED
MD ACEP Position: Support
Summary: These bills establish a new Maryland Loan Assistance Repayment Program for
Physicians and a related Fund. The program consists of two components: 1) the current federal
LARP program with additional funding from redirected physician license fee funds; and 2) a stateonly LARP program with funds from a 0.1 percent increase in rates for hospital services. Funds
would be targeted to “primary care” physicians (broadly defined) and physician shortage areas of the
state. Funding for the state-only program is contingent on CMS approval.
Credentialing of Health Care Providers by Managed Care Organizations, Insurance Carriers, and
Hospitals (House Bill 526/Senate Bill 646)
PASSED
MD ACEP Position: Support
Summary: This bill requires each hospital to use one of two uniform credentialing forms for
credentialing physicians: (1) the form designated by the Secretary of Health and Mental Hygiene; or
(2) the uniform credentialing form designated by the Maryland Insurance Commissioner. The
Commissioner is authorized to designate a specified provider credentialing application if the
application is available to providers at no charge and use of the application is not conditioned on
submitting the application to a carrier through a specified online credentialing system. Managed care
organizations are also added to the list of carriers subject to uniform credentialing requirements.
THE BAND AID APPROACH
Bon Secours “Bailout” – [Language from Maryland State Operating Budget]
Summary: “Further provided that $5,000,000 of this appropriation made for the purpose of provider
reimbursements, may not be expended for that purpose but instead may be transferred by budget
amendment to the Family Health Administration (M00F03.02) to be used only to provide an
operating grant to the Board of Directors of Bon Secours Hospital, Baltimore, Inc. Funds not
expended for this restricted purpose may not be transferred by budget amendment or otherwise to any
other purpose, and shall revert to the General Fund.
MD ACEP 2009 End of Session Report
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Further provided that before any operating grant is made to the Board of Directors of Bon Secours
Hospital, Baltimore Inc., the Board of Directors shall provide a report to the Department of Health
and Mental Hygiene and the budget committees detailing a long–term, comprehensive and sustainable
solution to the hospital’s financial issues. This report shall include a plan for implementing by fiscal
2011 a sustainable primary-care centric approach that in addition to urgent care services will include
expanded primary care access; improved mental health services; additional substance abuse
assessment and treatment services; and other critical community services. The budget committees
shall have 45 days from the receipt of the report for review and comment. It is the intent of the
General Assembly that this is a one-time operating grant.”
House Bill 1486/Senate Bill 1039 - Prince George's County Hospital Authority
PASSED
Summary: The Governor’s proposed FY 2010 budget includes $12.0 million in operating support
for the authority as required under Chapter 680 of 2008. The State has also committed to provide
long-term financial support of $75.0 million in operating funds ($15.0 million in FY 2011 through
2015) and $24.0 million in capital funds ($4.0 million in FY 2012 and $10.0 million in FY 2013 and
2014). Under Chapter 680, the State is relieved of this commitment as of March 15, 2009, in the
absence of a final agreement on the transfer of the system. This bill reestablishes that commitment.
However, as the State’s funding commitment is not altered or expanded, the bill is not anticipated to
have any additional fiscal impact on the State.
House Bill 521/Senate Bill 464 – Maryland Trauma Physicians Services Fund – Rural Trauma
Centers – Reimbursement
PASSED
MD ACEP Position: Monitored
Summary: This bill expands eligibility for reimbursement for Level III trauma centers from the
Maryland Trauma Physician Services Fund by doubling the maximum number of reimbursable
trauma on-call hours annually and authorizing reimbursement for costs incurred to maintain trauma
physicians on-call in specified practice areas. Reimbursement is contingent upon availability of funds.
The bill terminates September 30, 2013.
The fund receives approximately $12.0 million in revenues annually. The Governor’s proposed fiscal
2010 budget includes $12.2 million for the fund. The fiscal 2009 year-end fund balance is expected to
be $20.7 million. If enacted, SB 166/HB 101 of 2009, the Budget Reconciliation and Financing Act
of 2009, will redirect $17 million of the fund balance to the general fund, leaving a balance of only
$3.7 million.
Senate Bill 774/House Bill 815 - Medical Malpractice Liability Insurance - Garrett County
Memorial Hospital -Subsidy for Practitioners Who Perform Obstetrical Services – Extension
FAILED
Summary: The following language was included in the State Operating Budget:
“Further provided that $235,000 of this appropriation derived from swf310 Rate Stabilization Fund
made for the purpose of funding provider reimbursements, may not be expended for that purpose but
instead may be transferred by budget amendment to the Maryland Insurance Administration
(D80Z01.05) to be used only to provide subsidies for medical professional liability insurance policy
issued to policyholders who are family practitioners with staff privileges at Garrett County Memorial
Hospital and who also provide obstetrical services at Garrett County Memorial Hospital. The subsidy
shall equal 70% of the difference between the policyholder’s premium for calendar 2010 and the
MD ACEP 2009 End of Session Report
~3~
premium that otherwise would be payable in calendar 2010 if the policyholder was not providing
obstetrical services. Funds not expended for this purpose may not be transferred by budget
amendment or otherwise to any other purpose, and shall be cancelled.
Further provided that the Department of Health and Mental Hygiene and the Maryland Insurance
Administration in coordination with the Garrett County Memorial Hospital and the medical
malpractice insurance companies shall submit a report to the Senate Budget and Taxation Committee,
the Senate Finance Committee, the House Appropriations Committee, and the House Health and
Government Operations Committee regarding options to prevent the necessity for future medical
malpractice subsidies for the liability insurance policy issued to policyholders who are family
practitioners with staff privileges at Garrett County Memorial Hospital. The report shall be submitted
by October 1, 2009”.
OTHER ISSUES
Anesthesiologist Assistants (Senate Bill 798/House Bill 1161)
FAILED TO PASS- SUMMER STUDY BY THE SENATE EDUCATION HEALTH AND ENVIRONMENTAL AFFAIRS
COMMITTEE
MD ACEP Position: Support
Summary: This bill would have required the Board of Physicians to license and regulate the practice
of anesthesia care and establishes an Anesthesiologist Assistants Advisory Committee within the
board.
The initiative was led by Johns Hopkins in an effort to allow another qualified anesthesia provider to
practice in Maryland to help alleviate critical workforce shortages of anesthesia providers. The bill
met strong opposition from the nurse anesthetists. While the bills did not pass this Session they will
be the subject of a summer study by the Senate Education, Health and Environmental Affairs
Committee.
Maryland False Health Claims Act of 2009 (Senate Bill 272/House Bill 304)
FAILED
MD ACEP Position: Oppose
Summary: “As introduced, the Governor’s FY 2010 budget assumed $22 million (total funds) in
revenue would be generated by enactment of the False Claims Act. When the bill failed,
Supplemental Budget 2 was introduced and included reductions in hospital Medicaid payments of $20
million (total funds) through the imposition of Medicaid day limits—not reimbursable in rates—as
well as $9 million (total funds) in Medicaid payment reductions to physicians. The cuts were
contingent on reconsideration and passage of the False Claims Act. The cuts were not needed to
balance the budget—they just increased the projected FY 2010 state fund balance.
Subsequently, the stakeholders were asked to consider a compromise on the False Claims Act or the
Health Care Program Integrity and Recovery Act bills. The stakeholders said the qui tam (private
cause of action) and whistleblower provisions were the most egregious aspects of the false claims bill
and offered a number of amendments to both bills that would have strengthened the state’s authority
without those provisions. Secretary Colmers rejected the compromise amendments, so the cuts to
hospitals and physicians will stand.” – Excerpted from the MHA End of Session Report
MD ACEP 2009 End of Session Report
~4~
Charity Care – (Senate Bill 776/House Bill 1069)
BOTH BILLS PASSED
MD ACEP Position: Support
The Bills specify the following:
Free and Reduced-cost Care: Hospitals must develop a financial assistance policy for providing free and
reduced-cost are to patients who lack sufficient health care coverage. At a minimum, the policy has to
provide free care to patients with family income up to 150% of federal poverty guidelines (FPG) and
reduced-cost care to low-income patients with family income above 150% FPG, in accordance with the
mission and service area of the hospital. HSCRC may establish higher income thresholds by regulation. A
hospital must post notice of its financial assistance policy in the billing office.
Information Sheet and Notice to Patients: Each hospital must develop an information sheet that (1)
describes the hospital’s financial assistance policy; (2) describes a patient’s rights and obligations with
regard to hospital billing and collection; (3) provides contact information on how to access assistance; (4)
provides contact information for the Medicaid program; and (5) includes a statement that physician
charges are billed separately. The information sheet must be given to the patient or a representative of the
patient at specified times and must be referenced on the hospital bill. HSCRC must establish uniform
requirements for the information sheet and review each hospital’s compliance. Each hospital must also
ensure the availability of staff who are trained to work with the patient or a representative of the patient to
understand billing issues and how to apply for Medicaid and other programs that may help pay the
hospital bill.
Debt Collection Policies: Each hospital must submit to HSCRC the hospital’s debt collection policy. The
policy must (1) provide for active oversight by the hospital of any contract for collection of debts on
behalf of the hospital; (2) prohibit the hospital from selling any debt; (3) prohibit the charging of interest
on bills incurred by self-pay patients before a court judgment is obtained; (4) describe in detail the
consideration by the hospital of patient income, assets, and other criteria; (5) describe the hospital’s
procedures for collecting a debt; and (6) describe the circumstances in which the hospital will seek a
judgment against a patient. HSCRC must review each hospital’s implementation of and compliance with
these policies.
Reporting Requirements: Uncodified language in the bill requires two reports by October 1, 2009. First,
HSCRC must establish a workgroup on patient financial assistance and debt collection to review the need
for uniform policies among hospitals. Second, HSCRC must study and make recommendations on
incentives for hospitals to provide free and reduced-cost care to patients without the means to pay their
hospital bills.
House Bill 237/Senate Bill 505 “Health Care Malpractice - Noneconomic Damages”
FAILED TO PASS (No further action taken on House Bill after first house hearing; Senate Bill voted
unfavorable by the Judicial Proceedings Committee)
MD ACEP Position: Oppose
Summary: These bills would have increased specified limitations on noneconomic damages for a
personal injury action and a wrongful death action concerning health care malpractice for a cause of
action arising on or after October 1, 2009
House Bill 155 “Physicians - Licensure - Liability Coverage”
FAILED TO PASS (passed the House, voted unfavorable in the Senate Education, Health and
Environmental Affairs Committee)
MD ACEP 2009 End of Session Report
~5~
MD ACEP Position: Monitored
Summary: This bill requires physicians licensed in the State who perform outpatient surgical
services in freestanding ambulatory care facilities to maintain medical liability insurance of $500,000
per occurrence or claim and $1,500,000 per annual aggregate, or show coverage under the Federal
Tort Claims Act or the Maryland Tort Claims Act (MTCA).
House Bill 706 “Electronic Health Records - Regulation and Reimbursement”
PASSED
MD ACEP Position: Monitored
Summary: This bill requires the Maryland Health Care Commission (MHCC) and the Health
Services Cost Review Commission (HSCRC) to designate a State health information exchange (HIE)
by October 1, 2009. By various deadlines, MHCC also must (1) adopt regulations requiring “Stateregulated payors” to provide incentives to providers to promote the adoption and meaningful use of
electronic health records (EHRs); (2) designate one or more management service organizations
(MSOs) to offer EHR services; and (3) submit specified reports.
Beginning the later of January 1, 2015, or the date established for the imposition of penalties under
the federal American Recovery and Reinvestment Act of 2009 (ARRA), each provider using an EHR
that seeks payment from a State-regulated payor must use EHRs that are certified by a national
certification organization designated by MHCC and capable of connecting to and exchanging data
with the State HIE. State-regulated payors may reduce payments to health care providers for
noncompliance with these requirements. The bill takes effect July 1, 2009.
House Bill 1110 “State Board of Physicians - Discipline - Failure to Comply with Governor's
Order”
FAILED TO PASS
MD ACEP Position: Support
Summary: This bill would have This bill authorizes the State Board of Physicians to take
disciplinary action against a licensed physician who, during a catastrophic health emergency,
knowingly and willfully fails to comply with a Governor’s order to participate in disease surveillance,
treatment, and suppression efforts, or with the directives of the Secretary of Health and Mental
Hygiene or other designated official. The bill exempts a licensed physician who knowingly and
willingly fails to comply with certain Governor’s orders from fines and prison sentences imposed on
other persons who knowingly and willfully violate such an order.
Medevac Transport
Summary: The tragic crash in September 2008 of one of the helicopters prompted intense review of
the State’s Medevac helicopter system including: triage protocols, operations, equipment, and
staffing. The House of Delegates formed an oversight committee that made a number of
recommendations regarding the Medevac fleet including the need to move forward with the
replacement of the older helicopters and the continuation of the Medevac operations to be housed
with the Maryland State Police. Bills were introduced to formalize a Joint Legislative oversight panel
but those efforts did not pass this Session. There will be continued scrutiny of the State Medevac
system moving forward.
For more details and information on these and other bills visit your legislative portal at
www.bmbassoc.com/mdacep
MD ACEP 2009 End of Session Report
~6~
APPENDIX 1
www.baltimoresun.com/news/health/bal-md.bonsecours09apr09,0,2257214.story
baltimoresun.com
Bon Secours seeks aid to avoid shutdown
West Baltimore hospital asks state for $5 million
By Kelly Brewington | kelly.brewington@baltsun.com
April 9, 2009
Officials at Bon Secours Hospital are asking the state
for $5 million to keep the struggling hospital afloat
for a year while they devise a new strategy to offer
health care to a troubled West Baltimore community.
The company and the religious order that oversee
Bon Secours have not ordered its closure. But
executives say the hospital needs an infusion of cash
and a new vision to avoid shutting its doors.
"We are losing millions to an old system that cannot
be sustained in the future," said Richard J. Statuto,
CEO of the hospital's parent company, Marriottsvillebased Bon Secours Health System Inc.
The hospital lost $22 million last year - the largest
loss in a decade, according to the state agency that
sets the rates that hospitals can charge. But Bon
Secours has had problems for many years sustaining
a profit in a community where most of its patients are
poor, very sick and without insurance.
Dr. Samuel L. Ross, the hospital's CEO, took over
two years ago and pledged to confront inefficiencies.
He replaced senior management, got more stringent
about billing, and last year laid off 80 people from a
staff of 900. But the losses continued.
"The reality is if the hospital is not able to achieve the
financial turnaround - and get the support to do that there has to be an honest look at whether or not there
is closure," Ross said.
House and Senate budget conferees in Annapolis are
considering the hospital's request, among many other
issues. The full General Assembly must adopt a
budget before the session ends Monday.
Ross said that even if the hospital has to close,
MD ACEP 2009 End of Session Report
~7~
officials hope Bon Secours can continue to deliver
outpatient health care and social services in West
Baltimore.
An institution where senior executives open meetings
with prayer, leaders say they are committed to the
same ministry established by the Sisters of Bon
Secours when they opened the hospital in 1919. But
they say they cannot continue to sink millions more
into a health care model that is broken.
Bon Secours suffers from a downward spiral that has
small inner-city hospitals fighting to survive
nationwide: Poor patients, high costs and low
reimbursement rates.
Most patients have Medicare or Medicaid,
government insurance programs which reimburse at
lower rates than private companies, while some
patients have no insurance at all. The hospital's
uncompensated care equals 18 percent of its gross
revenue - more than twice the state average.
Hospital officials say that with so many poor patients,
doctors earn very little from insurers' payments for
the services they provide. So Bon Secours, like many
other hospitals, pays them more just to keep them on
staff. That subsidy - which cost the hospital $13
million last year - makes up the biggest portion of the
hospital's losses, hospital officials say.
At the same time, the neighborhood around Bon
Secours has virtually no primary care practices.
Patients clog the emergency room as if it's their
private doctor's office.
"If we want to stop the madness, we need to come up
with a more effective model that people want to
embrace," Ross said. "There is no easy fix."
This month, Bon Secours officials will start meeting
with neighboring hospitals, health care leaders and
community advocates to discuss a new health care
model for the community. Ross said he doesn't know
what a new Bon Secours might look like, but it needs
to focus on the community's biggest needs: primary
care and helping patients with chronic medical
problems manage their diseases.
Ross says the process will be similar to an effort the
hospital launched a decade ago, when it established a
foundation that provides a web of social services to
the community. In addition to the 125-bed hospital on
West Baltimore Street, Bon Secours runs community
centers that offer parenting and GED classes, and it
operates a bank called Our Money Place. In addition,
the foundation rehabbed crumbling rowhouses into
solid low-income rentals.
The hospital itself has deep roots in a community
whose institutions have vanished. Bon Secours took
over West Baltimore's failing Liberty Medical Center
in 1996. Liberty was the outgrowth of what used to
be Provident Hospital, an institution in black
Baltimore and once the only city hospital that trained
black nurses and doctors.
Located on a desolate corner, Bon Secours lies in the
midst of Baltimore's most vexing urban problems. Its
residents include some of the city's sickest, with high
rates of heart disease, diabetes, AIDS and infant
mortality.
In the emergency room, doctors see it all - from
people with chronic diabetes, renal failure and
asthma to drug addicts, psychiatric patients and the
homeless, who flood the waiting room seeking a
warm, safe place to escape the winter. The staff
knows many of them by name.
Behounek, who has worked at Bon Secours for 25
years, says Jackson is like many patients whose
health care history is murky. "They are all God's
children, just like me," said Behounek, who wears a
silver cross around her neck.
If Bon Secours converts to an outpatient model, no
one knows where Bishop and Jackson will go for
emergency care. The closest hospitals are the
University of Maryland Medical Center, St. Agnes
Hospital and Maryland General Hospital.
But patients will bring their financial problems with
them to hospitals that are already strained, said Alan
Sager of Boston University's School of Public Health,
who has studied urban hospital closings. And some
patients may stop seeking medical care, he said.
The state's rate-setting commission has tried to help
Bon Secours by building a 3 percent cushion into its
rates, which translates to roughly an extra $3 million
a year for the hospital. But the commission cannot do
more, said Robert Murray, its executive director.
"The commission has tried to recognize the additional
cost of operating in a very indigent neighborhood,"
he said.
Ross pointed out that beyond health care, Bon
Secours is the primary economic engine in a
depressed area. "It's not just us," he said. "There are
vendors, small businesses and people we employ."
On a recent afternoon, the ER is full, mostly with
elderly patients reclining in beds, hooked up to
various beeping machines. The scene is orderly, as
charge nurse JoAnn Behounek makes rounds.
Brother Arthur R. Caliman, a senior executive, said
the hospital cannot turn its back on a neighborhood
with such great needs.
She visits Mary Bishop, 66, a Bon Secours regular.
Today, she's complaining of a toothache. But after
more prodding, Behounek discovers Bishop has had a
heart valve infection. She was likely told to visit the
emergency room in the event of any serious pain.
Bishop lives in East Baltimore, but she took a taxi out
of her way to Bon Secours. "I like it here," she says.
MD ACEP 2009 End of Session Report
Two beds down, Kenneth Jackson, 45, is hooked up
to oxygen. His lifelong asthma was so severe that
morning that his girlfriend called an ambulance.
Doctors concluded he had pneumonia. Jackson, who
takes medication for schizophrenia, said he was
treated for asthma at a health clinic for the homeless
until a few months ago when his doctor left the
organization.
~8~
"There is no question that we want to continue some
level of health care ministry," he said. "I think the
problem is so great that the hospital may not be the
best solution."
Copyright © 2009, The Baltimore Sun
APPENDIX 2
www.baltimoresun.com/news/health/bal-md.hospitals27mar27,0,7665619.story
baltimoresun.com
Economic downturn hits Md. hospitals hard
Industry group says state facilities suffer more than national average
By Stephanie Desmon |
"mailto:stephanie.desmon@baltsun.com"stephanie.desmon@baltsun.com
March 27, 2009
The economic crisis is taking its toll on Maryland
hospitals: A report released Thursday shows that 34
of the state's 58 hospitals lost a total of $466 million
during the fourth quarter of 2008 and, officials said,
the picture has continued to be grim in the first
months of this year.
number of patients being admitted, as people put off
elective surgeries such as cosmetic procedures or hip
or knee replacements. Some cannot afford them in
the economic downturn. Others are afraid to take
time off from work, fearing that they might lose their
jobs while on leave.
The Maryland Hospital Association, which compiled
the data, said hospital finances in the state have slid
to "unprecedented low levels," far worse than
hospitals nationwide. The fourth-quarter loss was 10
times that for the same period in 2007, the
association said.
"Health care is not recession-proof," said Raymond
Grahe, chief financial officer of Washington County
Health System in Hagerstown, which is seeing
noticeably fewer patients admitted to the hospital.
The hospital is making $4.5 million in cuts and might
have to go further if the trend continues.
The hospitals are still able to pay their bills. Their
health care operations were, overall, more profitable
than the year before. But investment losses hit many
hospitals hard and - in glaring cases – larger hospitals
were hammered when financial arrangements
intended to protect them from interest rate increases
led to sharp losses when rates dropped.
"We have to be careful that we don't cut into the
muscle and the bone of an industry that could help
bring this state out of its economic doldrums," Grahe
said.
Another hit is coming from money paid to doctors $210 million in 2008, more than double the cost of
five years earlier - to keep them on staff. Hospitals
say the spending is necessary to counteract cuts in
federal reimbursement to physicians.
The number of patients being admitted to Frederick
Memorial Hospital is down by 5percent. "People are
deferring care, and when they come to us ...they're
sicker," said Tom Kleinhanzl, president and CEO of
the hospital. Its total profit year to year was down
$19 million, according to the report.
Meanwhile, patients are more likely to be uninsured and unable to pay for the treatment they receive.
"There is no question these non-operating losses are
putting more pressure on them," said Robert Murray,
executive director of the Maryland Health Services
Cost Review Commission, the state agency that sets
the rates that hospitals can charge. Still, he said,
"They're turning a profit and a quite healthy one."
"People are unfortunately losing their jobs and losing
their health insurance," said Carmela Coyle, president
and CEO of the hospital association. "At the same
time, the safety net is challenged."
But hospitals say the overall losses are forcing them
to lay off employees, implement hiring freezes and
make administrative cuts.
Maryland Hospital Association spokeswoman Nancy
Fiedler said that, for the most part, hospital cuts have
not had a major impact on patient care but, "If the
numbers continue to go in this direction ... we're
going to have to see layoffs in patient care."
Some hospitals are reporting a decrease in the
MD ACEP 2009 End of Session Report
~9~
Not all institutions are being affected equally by the
financial meltdown, though the trend is downward
for nearly all of the state's hospitals. The total profit
margin at Johns Hopkins Hospital was 3.8percent in
the fourth quarter of 2008. At the University of
Maryland Medical Center, the fourth-quarter profit
margin was a negative 77.3percent.
According to their financial statements, in the last
half of 2008, Hopkins and University of Maryland
Medical Center had to write off large sums from
financial arrangements in which they had expected
interest rates to rise, with Maryland's loss more than
$100 million. Anne Arundel Medical Center had to
write off $61 million in the period.
Murray, of the cost review commission, said the
hospitals might have to look more carefully at the
amount they are paying to doctors beyond what the
state covers. Such extra payments went up nearly $70
million last year to $210 million, the hospital
association said.
Doctors request the extra pay because they "feel as
though they're getting lower reimbursements than
they would like to maintain their standard of living,"
Murray said.
Copyright © 2009, The Baltimore Sun
www.baltimoresun.com
APPENDIX 3
Letter to the Editor
(Submitted to the Baltimore Sun)
This is in response to the March 27, 2009 article, “Economic downturn hits MD hospitals hard.”
Among the reasons listed for $466 million dollars in losses sustained by hospitals in 4th quarter
2008 is payment to physicians to keep them on hospital medical staffs. I would like to address
the misperception created by a quote attributed to Robert Murray, executive director of the
Maryland Health Services Cost Review Commission (HSCRC). “Doctors request the extra pay
because they ‘feel as though they’re getting lower reimbursements than they would like to
maintain their standard of living’.”
The facts are very different. The market for physician services is national, not state or local.
Reimbursement for physician services in Maryland is in the lowest quartile in the nation; the cost
of living is in the highest. Uninsured patients comprise at least 15 percent of the payer mix of
most emergency physician groups with much higher percentages in urban practices. The average
physician completing residency training is 30 years old and carrying over $150,000.00 in
educational debt. Less than half the physicians trained in Maryland choose to practice here
because of the low pay relative to the cost of living.
The HSCRC requires insurers to pay for hospital care at designated rates considering payer mix.
There are no rates or requirements for physician payment Hospitals have no vested interest in
maintaining physician lifestyles. They do have an interest and duty in maintaining access to
quality care. This is the reason for physician subsidies in Maryland.
Laura Pimentel, MD
Chair, Public Policy
Maryland Chapter, American College of Emergency Physicians
MD ACEP 2009 End of Session Report
~ 10 ~
APPENDIX 4
New York Times
April 27, 2009
Shortage of Doctors an Obstacle to Obama Goals
By ROBERT PEAR
WASHINGTON — Obama administration officials,
alarmed at doctor shortages, are looking for ways to
increase the supply of physicians to meet the needs of
an aging population and millions of uninsured people
who would gain coverage under legislation
championed by the president.
Senator Orrin G. Hatch, Republican of Utah, said,
“The work force shortage is reaching crisis
proportions.”
The officials said they were particularly concerned
about shortages of primary care providers who are
the main source of health care for most Americans.
One proposal — to increase Medicare payments to
general practitioners, at the expense of high-paid
specialists — has touched off a lobbying fight.
Miriam Harmatz, a lawyer in Miami, said: “My
longtime primary care doctor left the practice of
medicine five years ago because she could not make
ends meet. The same thing happened a year later.
Since then, many of the doctors I tried to see would
not take my insurance because the payments were so
low.”
Family doctors and internists are pressing Congress
for an increase in their Medicare payments. But
medical specialists are lobbying against any change
that would cut their reimbursements. Congress, the
specialists say, should find additional money to pay
for primary care and should not redistribute dollars
among doctors — a difficult argument at a time of
huge budget deficits.
To cope with the growing shortage, federal officials
are considering several proposals. One would
increase enrollment in medical schools and residency
training programs. Another would encourage greater
use of nurse practitioners and physician assistants. A
third would expand the National Health Service
Corps, which deploys doctors and nurses in rural
areas and poor neighborhoods.
Some of the proposed solutions, while advancing one
of President Obama’s goals, could frustrate others.
Increasing the supply of doctors, for example, would
increase access to care but could make it more
difficult to rein in costs.
Senator Max Baucus, a Montana Democrat and
chairman of the Finance Committee, said Medicare
payments were skewed against primary care doctors
— the very ones needed to coordinate the care of
older people with chronic conditions like congestive
heart failure, diabetes and Alzheimer’s disease.
The need for more doctors comes up at almost every
Congressional hearing and White House forum on
health care. “We’re not producing enough primary
care physicians,” Mr. Obama said at one forum. “The
costs of medical education are so high that people
feel that they’ve got to specialize.” New doctors
typically owe more than $140,000 in loans when they
graduate.
Lawmakers from both parties say the shortage of
health care professionals is already having serious
consequences. “We don’t have enough doctors in
primary care or in any specialty,” said Representative
Shelley Berkley, Democrat of Nevada.
Even people with insurance have problems finding
doctors.
“Primary care physicians are grossly underpaid
compared with many specialists,” said Mr. Baucus,
who vowed to increase primary care payments as part
of legislation to overhaul the health care system.
The Medicare Payment Advisory Commission, an
independent federal panel, has recommended an
increase of up to 10 percent in the payment for many
primary care services, including office visits. To
offset the cost, it said, Congress should reduce
payments for other services, an idea that riles many
specialists.
Dr. Peter J. Mandell, a spokesman for the American
Association of Orthopaedic Surgeons, said: “We have
MD ACEP 2009 End of Session Report
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no problem with financial incentives for primary
care. We do have a problem with doing it in a
budget-neutral way.
“It’s completely reasonable to say that adding more
physicians to the work force is likely to increase
health spending,” Dr. Grover said.
“If there’s less money for hip and knee replacements,
fewer of them will be done for people who need
them.”
But he said: “We have to increase spending to save
money. If you give people better access to preventive
and routine care for chronic illnesses, some acute
treatments will be less necessary.”
The Association of American Medical Colleges is
advocating a 30 percent increase in medical school
enrollment, which would produce 5,000 additional
doctors each year.
“If we expand coverage, we need to make sure we
have physicians to take care of a population that is
growing and becoming older,” said Dr. Atul Grover,
the chief lobbyist for the association. “Let’s say we
insure everyone. What next? We won’t be able to
take care of all those people overnight.”
In many parts of the country, specialists are also in
short supply.
Linde A. Schuster, 55, of Raton, N.M., said she, her
daughter and her mother had all had medical
problems that required them to visit doctors in
Albuquerque.
“It’s a long, exhausting drive, three hours down and
three hours back,” Ms. Schuster said.
The experience of Massachusetts is instructive.
Under a far-reaching 2006 law, the state succeeded in
reducing the number of uninsured. But many who
gained coverage have been struggling to find primary
care doctors, and the average waiting time for routine
office visits has increased.
The situation is even worse in some rural areas. Dr.
Richard F. Paris, a family doctor in Hailey, Idaho,
said neighboring Custer County had no doctors, even
though it is larger than the state of Rhode Island. So
he flies in three times a month, over the Sawtooth
Mountains, to see patients.
“Some of the newly insured patients still rely on
hospital emergency rooms for nonemergency care,”
said Erica L. Drazen, a health policy analyst at
Computer Sciences Corporation.
The Obama administration is pouring hundreds of
millions of dollars into community health centers.
The ratio of primary care doctors to population is
higher in Massachusetts than in other states.
Increasing the supply of doctors could have major
implications for health costs.
MD ACEP 2009 End of Session Report
But Mary K. Wakefield, the new administrator of the
Health Resources and Services Administration, said
many clinics were having difficulty finding doctors
and nurses to fill vacancies.
Doctors trained in internal medicine have historically
been seen as a major source of frontline primary care.
But many of them are now going into subspecialties
of internal medicine, like cardiology and oncology.
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