Meadows denies pushing new tax on doctors

In an e-mail to supporters Wednesday afternoon, Mark Meadows, an East Lansing Democrat, denied he was involved in drafting and pushing legislation which would assess a tax on doctors in order to raise matching funds for federal Medicaid dollars.

The legislation squeaked by in the state House on Tuesday night, and was opposed by, among others, the Michigan State Medical Society. In addition to the new tax on doctors, the House also approved a shell for Michigan Business Tax reforms, and a freeze on the inflationary adjustment to personal income tax exemptions.

When this legislation was originally presented to me, I was reluctant to support it for several reasons: I did not want any proceeds from this to be used in any programs other than Medicaid; I was bothered by a tax that would be assessed on doctors who did not treat Medicaid patients; and, I wanted to be sure that any proceeds would go towards raising Medicaid reimbursement rates for those Doctors that did treat Medicaid patients.

I know that some organizations (MSMS) have portrayed me as somehow being the person who proposed and pushed this tax forward, but that is simply untrue. When it was proposed to me as a member of a task force trying to identify some potential revenue streams to address shortfalls in the budget, I rejected it for the reasons identified above. I then consulted with groups that currently have a QAAP (hospitals, HMOs, nursing homes). Those conversations eventually led me to take another look at it.

Meadows said he eventually supported the bill Tuesday night, citing changes in the law which would restrict the revenues raised to a special Medicaid fund. He also provided some more insight into his reasoning:

Even without the MBT [Michigan Business Tax] credit, a physician that receives 4% of his or her revenue from Medicaid will break even on the tax. Generally, by raising the reimbursement level to Medicare rates, a physician will see about a 125% increase in Medicaid revenue, assuming the same procedures and number of patients.

It is estimated that the tax will bring in about $300 million and that will leverage (through the federal match) $822 million dollars into the Medicaid program. Of that $822 million, $716 million will be used to increase reimbursement rates. The remainder works to keep services in the Medicaid program.

A Quality Assurance Assessment Program (QAAP) is a federally-established program that provides Medicaid reimbursement rate increases to health care providers by assessing a specific assessment on the providers. The provider groups and services that are eligible for the QAAP are identified in the Social Security Act.

The bill has been sent from the Democratic controlled House to the Republican controlled Senate, where a spokesperson for Sen Majority Leader Mike Bishop, R-Rochester, called the bill, and two partner bills, “a joke.”