Doctors speak out on tax

Dawson Bell

Oct. 21, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- LANSING -- Hundreds of white-coated doctors swarmed the state Capitol on Tuesday, most of them trying to convince the Legislature not to heed Gov. Jennifer Granholm's call for a tax on medical services to help balance the state budget.

The demonstration was organized by the Michigan State Medical Society, Michigan's largest doctor organization, which claimed to have brought up to 800 physicians to Lansing to rally against the tax. They were countered by a smaller contingent of emergency room physicians who support it.

Many from both sides later attended a Senate committee hearing to discuss the proposed 3% tax on gross receipts at medical practices. The tax would generate about $300 million in new revenue and could be used to attract more than $500 million in federal matching money, according to state Medicaid officials. They said the money could be used to restore an 8% cut in Medicaid reimbursements.

A similar tax, which in government-speak is called a Quality Assurance Assessment Program, is levied on hospitals, nursing homes and some HMOs. Stephen Fitton, the state's acting director of Medicaid, said the QAAP taxes have been critical to maintaining services.

But the doctors protested that the tax proposed for them is unfair and unworkable.

Because medical practices vary dramatically in size and scope of service, a doctor tax would be wildly inequitable, putting some practices out of business, said Howell internist John Vassallo. "This proposal is a job killer," he said.

Emergency room physicians, who often treat a high number of Medicaid patients, said higher reimbursements would more than offset the cost of the tax for many doctors.

But that argument was unconvincing for the antitax physicians, who said state government couldn't be trusted to maintain the reimbursement level. Many of them suggested that if the state needs more revenue to maintain critical programs, lawmakers and the governor should seek to raise taxes such as sales or income that fall broadly across the population.

The doctor tax was approved last week in the state House but is stalled in the Senate.

The standoff was well illustrated on Capitol Avenue outside the Senate hearing room late Tuesday, where a pro-tax billboard truck was parked bearing the message "PHYSICIANS WHO CARE SUPPORT THE QAAP." Tucked under the wiper blades of the unoccupied cab were protest signs, including one directed at Granholm and the Legislature: "YOUR FAILURE TO PLAN DOES NOT CONSTITUTE A CRISIS."

Contact DAWSON BELL: 517-372-8661 or dbell@freepress.com

Newstex ID: KRTB-0048-39020866