The views of proponents and opponents of the Any Willing Physician bill are very polarized and politically charged. It seems that we can make a positive contribution to health policy in Massachusetts if we further study the issues surrounding these laws, and make an objective, informed recommendation to the legislature. Our recommendation will need to assess the contracting implications of any willing provider legislation, in general, within the context of our new healthcare marketplace. But we also must take a position on this specific bill.
HospPAC Commissioners
With that goal in mind, the HospPAC (Hospital Payment System Advisory Commission) commissioners had set about assessing the various perspectives on the Any Willing Physician bill. It was by no means clear what recommendation, if any, they eventually would make. Indeed, as they approached the meeting where they were to make a final decision on a recommendation, they appeared to be polarized themselves.
BACKGROUND
HospPAC was an independent commission, established in 1992 as part of a hospital financing law, known as Chapter 495, that created a competitive healthcare marketplace in Massachusetts. The legislative language establishing HospPAC and its mandates is contained in Exhibit 1.
The passage of Chapter 495 signified a fundamental shift in the Massachusetts’ vision of how the healthcare industry should be regulated. Previous legislation gave the Rate Setting Commission (RSC) authority to regulate all hospital payment rates paid to providers. Chapter 495 deregulated acute hospital payment rates, and allowed providers and payers, including Medicaid, to freely negotiate their own rates. (Non-acute hospital rates, such as for chronic, rehabilitation, and psychiatric hospitals, are still regulated by the RSC.) As a result, a large portion of the state’s payment system was governed by market forces rather than government regulation.
One of HospPAC’s mandates was to address issues related to the fairness of these newly deregulated contracting practices. This “fair market contracting” mandate charged HospPAC to “... assess adherence by payers and providers to recognized fair market contracting standards and to propose, whenever deemed appropriate, additional safeguards to prevent unfair or discriminatory contracting or pricing practices.”
Current Contracting Standards
At the time HospPAC’s discussions about fair market contracting were underway, there were very few laws that determined the “fairness” of payers’ and providers’ acts when negotiating and implementing contracts. Federal and state antitrust laws prevented organizations from obtaining too large market shares in particular geographic areas, and there was also a state regulation, Chapter 176D, that prohibited boycotts or other anti-competitive coercive acts, as well as refusals to contract based on religious affiliation or available range of services. This statute also prohibited insurers from engaging in so-called “most favored nation” pricing, which entitled one insurer to the same rate a provider charged another insurer. . . .
Assignment
- In general, what are the basic arguments for and against AWP laws?
- How, if at all, does the any willing physician bill differ from AWP laws in general? Are these differences significant? Why or why not?
- How might an any willing physician law affect primary care physicians versus specialists? What implications does this have for health plans’ ability to control costs?
- What recommendation should HospPAC make relative to the any willing physician law? AWP laws in general?