DURHAM — As a Maine legislator, I sat on the Health and Human Services Committee for two years. No other place showed me, a licensed pharmacist for nearly 30 years, the crisis we face in health care in such totality. Health and Human Services committees at the state level are where government rate programs, patient population and health collide.

Patients come to testify because they have lost either services, access or money. Often, all three are true. Health care providers testify because they are trying to stop the rate setting that has driven margins dangerously low. This is most apparent in a rural state like Maine.

In 2017, Calais Regional Hospital had to shut down its obstetrics department, and later that year ended outpatient cancer care. In September, the hospital filed for Chapter 11 bankruptcy protection. The Health and Human Services Committee heard from numerous people who demanded that we force the hospital to keep the obstetrics department open. The larger hospital system in Bangor is two hours away, so there are real concerns about losing the only hospital within reasonable distance. Hospital representatives testified that rate reductions were going to cause even further reductions in services and access. Two years later, we see the results, and even more rural hospitals in Maine are going through similar crises.

Now Congress is going down this road. Lawmakers want to address surprise medical billing, which happens when certain procedures are not covered for out-of-network care. They propose mandating a “median” rate that insurers must pay out-of-network providers. We can look forward to more hospital closures and doctor shortages, particularly in rural areas, if Congress moves forward with this approach.

Why does government rate setting have this adverse effect on rural areas? Rural populations are small and scattered, meaning that full-service health centers already face serious challenges, such as a high Medicaid population with low reimbursement rates, which can be inadequate to cover the actual services. It’s more difficult and more expensive to recruit practitioners to serve in rural areas like Calais and northern Maine – something I saw in the world of pharmacy recruiting. Still, private and government-backed insurance rates fail to reimburse at a level that helps recruit and retain providers in these areas.

Rate-setting discussions have always taken a “one size fits all” approach, even in the Health and Human Services Committee, but that approach doesn’t manage the diversity and access issues in our health systems. Fixed rates don’t account for rural hospitals, and the higher salaries to get a provider to move there. They don’t account for other daily living costs that make it hard to find help.

Calais Regional Hospital can’t pay an obstetrician for 24-hour workdays when the number of births there averages less than one a day. Similarly, having an obstetrician on call is not a likely scenario, and it’s not practical. The reimbursements that would be acceptable and practical for a busy, full-time obstetrics unit just won’t work in these areas. Health care practitioners are professionally and legally obligated to deliver care, which leads to a non-covered service or an insufficient reimbursement.

My experiences show that the system needs more flexibility. There certainly needs to be accountability for insurers and audit reinforcement for services rendered, but the rate-setting approach will yield only an inadequate solution. Government-backed rate setting will lead only to blanket rate cuts and higher administrative burdens to get paid for services rendered.

The United States is one of the most developed and modern medicine civilizations in the world. Surprise billing and the threat of unknown medical costs lead patients to simply stay home when they need care. This needs critical discussions between health care providers, payers and policymakers. Congress should take stock of the failures of rate setting and protect access to care in rural states like Maine. Passing bad policy is worse than no policy at all.


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