Bill would set Rhode Island physician pay minimum

Rhode Island lawmakers are set to take up a bill that would set the minimum physician pay rate at 125% of what Medicare pays in an effort to bring pay rates closer to those in neighboring states.

The bill's sponsor, Democratic state Rep. Donald Lally Jr., said he worked with physicians to draft the bill after learning that low pay rates were driving physicians and dentists out of state and making it difficult to recruit young doctors to Rhode Island.

"As our physicians and dentists get older, it's going to hit a crisis point where we'll be in dire need of specialists in Rhode Island," Lally said.

No other state sets a minimum level of physician pay that commercial payers are required to meet.

The bill requires commercial insurers to pay a physician at least 125% of Medicare rates. In exchange, however, physicians must participate in Rhode Island's Medicaid program and devote at least 5% of their practices to free care.

Although it says physician pay is a problem in the state, the Rhode Island Medical Society opposes the bill.

"Those floors rapidly have a way of becoming ceilings, and getting it changed once it's made law becomes very difficult," said Steven DeToy, director of public and government affairs for the society.

DeToy said the group testified against a similar bill introduced in 2010 and would do so again this year if necessary.

However, Paul Carey, practice administrator for Urologic Specialists of New England, which has 11 offices and a surgery center in Rhode Island, said his practice has advocated for the minimum pay rate bill.

"We're one of the worst-reimbursed states in the country, and we've been fighting this battle for a long time," he said.

Carey said the group makes less than comparable practices in neighboring states -- anecdotally speaking, 95% to 105% of Medicare compared with 125% to 130% of Medicare in Massachusetts and Connecticut. The disparity makes it difficult to recruit young physicians, he said.

"We were looking for somebody for two or three years, and it's been very difficult," he said. The practice has turned to helping train young, homegrown physicians, he said. "They know the reimbursements are terrible, but we hope they will stay because they have family in this state."

DeToy and Carey said the pay disparity stemmed from the dominant position that the state's Blues plan historically held.

"They did suppress rates in Rhode Island for a long time," DeToy said.

Blue Cross & Blue Shield of Rhode Island held 69% of the market for PPO and HMO coverage in the state, according to the American Medical Association's most recent research report on competition in the health insurance market, which is based on enrollment figures from Jan. 1, 2008.

Kim Reingold, spokeswoman for Rhode Island Blues plan, said she could not provide comment before this story's deadline.