An increase to Washington state's business and occupation tax passed during the 2019 state legislative session will have a negative impact on health care access for the most vulnerable of populations, especially children.
House Bill 2158 imposed a 20 percent surcharge on the B&O professional services tax on independent physicians, among other professions. Hospitals are generally not subject to the surcharge.
The projected impact on the physician community in our state? A whopping $50M over the next two years alone.
The WSMA is not taking this hit to our state's physicians and resulting impact to patients lightly. We are working today and will be working in the months ahead to build momentum to exempt physicians from this onerous surcharge in the 2020 session.
We need your help to make it happen.
Keep the pressure on local legislators by meeting with them during the months leading up the beginning of the next legislative session, which begins in January. We need you to let your lawmakers know the impact this tax will have on your practice and on access to care for patients in our communities.
Nothing moves legislators more than personal stories of how the ripple effect of their actions impact your business and the lives of your patients.
Talking points are below. For tips on how to schedule a meeting with your legislator(s) and a sample agenda for the meeting, click here.
If you have questions about these talking points or how to meet with your legislator, contact Alex Wehinger at firstname.lastname@example.org.
Talking Points for the B&O Tax Increase
The 20 percent B&O tax surcharge will:
- Put a strain on many practices' ability to remain economically viable and competitive in today's marketplace. Consider that approximately 70 cents on every dollar received by a medical practice goes toward overhead and dealing with insurance plan requirements, not patient care. Where it used to take three support professionals per physician, now the number is five.
- Limit access to care for our most vulnerable patients, including children. Keeping administrative costs down is critical to helping practices care for Washington state's expanded Medicaid population. A physician practice loses money caring for Medicaid patients since reimbursement is far below the actual cost of service [if you have an example, share it here]. Adding additional taxes onto their business will force many practices to stop seeing Medicaid patients to stay viable, or to close their practice and join a large integrated system, limiting choice in the community and raising health care costs for all.
- Mean a loss of jobs since independent physician practices run on very tight margins. A large practice estimates 70 percent of its expenses are for labor. A medium family practice estimates the impact of the tax increase would equal two full-time jobs.
- Impact the ability of practices to invest in innovations that improve patient safety and patient care, stifling their ability to be competitive in today's marketplace.
- Put independent practices at a competitive disadvantage to hospital-based medical groups, which are protected from the surcharge.
WSMA Members Highlight the Problems with the B&O Tax Increase on Independent Physicians
Sen. Steve O'Ban (R-Pierce County) recently conducted video interviews with four WSMA members who are also physicians at small practices and small business owners and who will be directly affected by the tax increase. For quick one-minute video shorts, click on the following links which address:
How the B&O tax increase will affect your family budget and health care
In the first full-length interview, WSMA members Teresa Girolami, MD, and Brianna Label, MD, help highlight the problems with the B&O tax increase on independent physicians. Watch part one of the three-part interview below. Visit Sen. O'Ban's website for parts two and three of the interview.
Will the tax increase on doctors and other small business owners make it harder for low-income patients to access care?
In the second full-length interview, WSMA members Chelsea Unruh, MD, and Sung-Won Kim, MD, discuss how the B&O tax increase is forcing independent physician practices to make hard choices that have real impacts on patients' access to care. Visit Sen. O'Ban's website for parts two and three of the interview.