2009 House Bill 5386 (Impose new tax on doctors )

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Introduced by Rep. George Cushingberry (D) on September 17, 2009, to impose a 4 percent gross revenue tax on doctors. This would be a “Medicaid Quality Assurance Assessment” (MMQAA) tax that is used by the state to collect more federal Medicaid matching funds.
- Referred to the House Tax Policy Committee on September 17, 2009.
  - Reported in the House on October 6, 2009, without amendment and with the recommendation that the bill pass.
- Substitute offered by Rep. George Cushingberry (D) on October 6, 2009, to change the proposed tax rate to 3 percent. The substitute passed in the House by voice vote on October 6, 2009.
- Amendment offered by Rep. Phil Pavlov (R) on October 6, 2009, to tie-bar the bill to House Bills 4090, 4151, 4979 and 4980, meaning this bill cannot become law unless those ones do also. Those bills would require citizenship and resident preferences in subsidies & tax breaks, repeal restrictions on local government service consolidations, and authorize “education mandate rollback contracts” with school districts . The amendment failed in the House by voice vote on October 6, 2009.
- Amendment offered by Rep. Joseph Haveman (R) on October 6, 2009, to tie-bar the bill to House Bill 5208, meaning this bill cannot become law unless that one does also. HB 5208 would create an unemployment insurance fraud control fund to buy software that can detect and collect benefit overpayments. The amendment failed in the House by voice vote on October 6, 2009.
- Amendment offered by Rep. Gail Haines (R) on October 6, 2009, to tie-bar the bill to House Bills 4898, 4151, 4902, 4909, 4988 and 4908, meaning this bill cannot become law unless those ones do also. They would establish expedited environmental permit application processes, eenchmark state environmental regulation administration, regulate certain environmental-related plant inspections, limit state regulation promulgation authority, and require periodic review of state regulations. The amendment failed in the House by voice vote on October 6, 2009.
- Amendment offered by Rep. Kimberly Meltzer (R) on October 6, 2009, to tie-bar the bill to House Bills 4043, 4121, and 4150, meaning this bill cannot become law unless those ones do also. They would all place the state’s “check register” on-line. The amendment failed in the House by voice vote on October 6, 2009.
- Amendment offered by Rep. Marty Knollenberg (R) on October 6, 2009, to tie-bar the bill to House Bill 4080, meaning this bill cannot become law unless that one does also. HB 4080 would end post-retirement health coverage for legislators. The amendment failed in the House by voice vote on October 6, 2009.
- Amendment offered by Rep. Joseph Haveman (R) on October 6, 2009, to tie-bar the bill to House Bill 5480, meaning this bill cannot become law unless that one does also. HB 5480 would eliminate a scheduled increase in the earned income tax credit. The amendment failed in the House by voice vote on October 6, 2009.
Passed in the House (56 to 52) on October 6, 2009, to impose a 3 percent gross revenue tax on doctors. This would be a “Medicaid Quality Assurance Assessment” (MMQAA) tax that is used by the state to increase the amount of federal Medicaid matching funds it collects. [Vote Details and Comments]
Received in the Senate on October 8, 2009.
- Referred to the Senate Health Policy Committee on October 8, 2009.
  - Motion by Sen. Alan L. Cropsey (R) on October 28, 2009, to discharge the bill from further consideration by the Committee on Health Policy (and advance it to an immediate final passage vote on the Senate floor). The motion passed in the Senate by voice vote on October 28, 2009.
Failed in the Senate (4 to 32) on October 28, 2009, to impose a 3 percent gross revenue tax on doctors. This would be a “Medicaid Quality Assurance Assessment” (MMQAA) tax that is used by the state to increase the amount of federal Medicaid matching funds it collects. [Vote Details and Comments]
Moved to reconsider by Sen. Alan L. Cropsey (R) on October 28, 2009, to reconsider the vote by which the bill was defeated. The motion failed in the Senate (5 to 31) on October 28, 2009. [Vote Details and Comments]

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1) Re: 2009 House Bill 5386 (Impose tax on carbonated soft drinks ) [by cen20474 on October 30, 2009]

Here we go again another (BRAIN DEAD) senator wanting to raise taxes on doctor.You senator and congressmen should wake up and smell the coffee,If any of you Moron had enough sence you would look at (PART TIME LEGISLATOR) instead of increasing taxes all the time other state have part time ligislator.And the state would save million.

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2) Re: 2009 House Bill 5386 (Impose tax on carbonated soft drinks ) [by Admin003 on October 29, 2009]

Senator Switalski’s statement is as follows:

This is, of course, the famous QAAP bill that would be a physician tax on physicians in our state. We just had about a four-hour hearing on this last week, and we had standing room only. There is significant opposition to the bill, but the problems that have been brought forward with the bill, I believe, can be fixed. I believe we owe it to the Medicaid recipients in this state and the doctors who service them to try to improve the system.

The path we are going down right now is to cut Medicaid 8 percent and with continuing budget problems. I think we have a significant deficit projected and General Fund for next year. We would have to continue down that path of continued cuts. The QAAP provides an alternative, and certainly, it is an alternative replete with problems that it would have to undergo significant changes. But as part of that process, last week and the hearing that we had, we asked the doctors and the physician groups and interested parties, “Would you be willing to sit down and work on this bill and make improvements and fix the problems with it?” With probably one exception everyone said, “Yes, we are willing to sit down and make improvements and changes to this bill, but in its current form, we don’t support it.”

Well, what we have in front of us now is the bill in its current form as it came over from the House. Certainly, it needs significant changes, but with the thing discharged to the floor without warning, it is not possible to make those significant changes. We discussed those at length during that four-hour hearing, and I think what the doctors were looking for were things like a provision that said any money that we raised through this QAAP would stay in the DCH budget and be used for health purposes; that we would guarantee the higher Medicare rate rather than the low and continually dropping Medicaid rate that is causing us to lose access per patients and convince doctors not to participate.

So if we could do something like that, it would improve the bill. If we could have a one-year sunset on the bill, they could see whether it worked or not, and if it wasn’t working, we could get rid of it. If we had language in there to address timely payments and provisions that if the federal reimbursement changed, the tax would go away. All these things would make this bill a lot better, but we really don’t have a chance to have those conversations and make those changes if we bring it up for a vote right now.

There were other problems. There were physicians who have a large amount of overhead who maybe are giving out expensive cancer treatments, cancer drugs, or inoculations that they just pass on the costs to their customers. They really don’t’ make money on it, but under the definition of “gross receipts” in this bill, they would be paying a tax on that. We talked about redefining the definition of “gross receipts” so that we could exclude some of those. We talked about the size of the state’s gain share and adjustments we could make for that. We talked about the tendency of the Legislature to raise money and devote resources to something and then take money—General Fund support—away with the other hand. We talked about maybe there is a maintenance of effort section we could put in to make that impossible for the Legislature to do that. We talked about promise with the Federal Qualified Health Centers, that currently get a higher rate than Medicare, and they would be losers in this if they had to just pay in and are not able to get a higher reimbursement.

So we talked about all these problems, and we expressed a willingness to sit down at the table and figure out if it is possible to change the bill and address those. You know, it was certainly a major undertaking, but I think anybody who sees the path that we are going down and sees the continued rise in Medicaid patients and the decline and physicians willing to take them because of the poor reimbursement rates, we have to find a way to change that trend. So it was worth talking about, and I still think it is worth talking about. If you are going to put this up and make me vote on a bill that I think is flawed but can be fixed, I have no choice. I have to vote for it and hope that we could make changes in it, but you are not making it easy on me. You are not allowing the discussion to take place. You are not allowing the changes in the bill to be offered to try to fix its problems.

So I think this is not a very good evaluation of the QAAP’s merit because you are putting up something that I, myself, am an advocate of it, admit is fundamentally flawed. But I think it can be fixed, and you are not giving us a chance to try to fix it. I am disappointed you have discharged this to the floor, not giving the Legislature a chance to make improvements to it. But I am going to vote for it because I want to say that I don’t want to continue going down the path we are going down. I think there is a better way to. We ought to make one little change in it. We should throw a comma in there, I think, so that we have a difference between this and the House bill, and we could then go to a conference and spend some time. It might take a lot of time. It might take a lot of thought. It might take bringing in a lot of other issues like medical malpractice, like reimbursement to other entities, and it might take a lot of uncomfortable votes and uncomfortable negotiations, but it is something we should try and see if we can make the thing better.

So thank you for the opportunity to speak, Mr. President, and I hope members will keep the process alive to keep something that is flawed but can be fixed from dying a premature death.

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3) Re: 2009 House Bill 5386 (Impose tax on carbonated soft drinks ) [by Admin003 on October 29, 2009]

Senator Cherry, under her constitutional right of protest (Art. 4, Sec. 18), protested against the motion to order the previous question for Senate Bill No. 5386.

Senator Cherry’s statement is as follows:

I voted “no” on the previous question vote because this is another political game, and I am so sick of political games. This bill was not a good bill; yet I did vote for it because we need to do something. We sat in a committee meeting for four hours last week and came up with some suggestions, some things that we needed to work through. My colleague from the 10th District very diplomatically talked about what those changes were, and yet we refuse to even deal with any of it.

I am so tired of this body playing political games and not solving the budget problem, so I voted “no.”

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