Taxing docs not acceptable

March 8, 2010
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Editor:

For the second time in six months, Gov. Jennifer Granholm proposed to tax physicians an additional 3 percent of their gross revenue. That’s a tax on revenue before any expenses, including medications and medical devices provided to patients in the office for which there is no markup. Insurance companies only reimburse physicians their actual cost of medications and medical devices, which means physicians would lose an additional 3 percent over and above their cost.

The state of Michigan reduced reimbursement for Medicaid patients twice in the last six months. There was a 4 percent reduction effective July 1, 2009, and an additional 4 percent reduction Jan. 1, 2010. These reductions were to a Medicaid system that already wasn’t reimbursing physicians enough to cover their costs. For instance, for the office visit code 99212 (minimal problems), the Blue Cross/Blue Shield reimbursement allowable is $46.66, the Medicare allowable is $35.71, but for Medicaid the most recent allowable was $19.08. And the governor wonders why physicians can’t accept more Medicaid patients.

Physicians have the same expenses as other businesses — staff payroll and medical insurance, payroll taxes, energy bills, phone bills, rent or mortgage payments, equipment and supply purchases, maintenance, personal property taxes, the Michigan Business Tax, income taxes (state and federal), general and liability insurance, cost of continuing education requirements, etc. The difference is that physicians can’t raise their fees to offset increased expenses. Their reimbursements are fixed by insurance carrier contracts.

Further taxing physicians to subsidize Medicaid funding makes no more sense to me than taxing teachers to subsidize education funding or taxing policemen to fund prisons.

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