Price cap modification expected in Florida

June 17, 1992

Florida's price cap on imaging procedures, barely out of its legislativebirthing room, already shows signs of old age. Two bills thatwould modify the two-month-old cap are working their way throughFlorida's Senate and House of Representatives. The

Florida's price cap on imaging procedures, barely out of its legislativebirthing room, already shows signs of old age. Two bills thatwould modify the two-month-old cap are working their way throughFlorida's Senate and House of Representatives.

The Florida cap became law as part of legislation intendedto cut health-care costs by banning providers from referring tomedical centers in which they have an investment interest (SCAN6/3/92 and 4/8/92).

This law applies to health services designated by the stateto be major contributors to rising costs: imaging facilities,physical therapy centers, clinical labs and radiation therapycenters. It gives physicians until October 1995 to divest themselvesof ownership in joint ventures in the designated health servicesto which they self-refer.

But the price cap, which limits fees to 15% over Medicare rates,applies not only to joint-ventured facilities but also to facilitiesin designated health services with no physician ownership. Thatraised the ire of the state's health-care community, which hasbeen clamoring for a rewrite of the law.

Two bills being heard in the Florida legislature would do justthat, according to David Teek, an aide to Rep. Charles Roberts(D-Titusville), the main sponsor of the joint-venture law.

A bill in the state Senate would postpone the rate cap untilJuly 1994. At that time a cap would be imposed, preventing fees40% over Medicare rates in the designated health services. Health-careproviders could obtain authorization to charge higher rates incases of economic hardship, Teek said.

The other bill, in the state's House of Representatives, wouldapply the rate cap only to joint-ventured facilities in the designatedhealth services.

The bills could be modified as they move through the legislature,but the general mood of lawmakers is to make the cap less restrictive,Teek told SCAN.

"There's a recognition that (a 15% cap) is probably toolow and that it shouldn't be applied to people outside joint ventures,"he said.

The cap is making it harder for physicians to divest themselvesof interests in medical centers because facilities operating underprice regulation are less attractive to investors, Teek said.

Florida's lawmakers hope they won't be back in session in twomonths debating the issue a third time. The current session, originallycalled to deal with the state budget, is scheduled to end June19.

"I think they want to make sure that when they resolvethis they resolve it correctly," Teek said.