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PROVIDER TAX

Background

What to do if you are subject to this tax

How to inform your patients

How to contribute

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Contact your legislator

Help RIMS fight artbitrary physician provider tax

Background

The Rhode Island state budget for fiscal year 2008 imposes a 2% surcharge on a subset of physicians who perform imaging services or have licensed physician ambulatory surgery centers. This tax will affect hundreds of physicians, including some primary care practices. RIMS has opposed this tax since it was proposed by the Governor, but it was adopted by the General Assembly. RIMS formed the Rhode Island Medical Society Surcharge Committee to determine which steps can and should be taken in order to fight this discriminatory and unfair tax. The Surcharge Committee voted to pursue legal action to try to have the tax repealed. The RIMS Council voted unanimously to pursue this course of action.

Believing that such a tax can only damage health care in Rhode Island, RIMS is moving quickly to challenge the legality of this new and highly arbitrary tax, the impact of which will be broader and deeper than it may first appear.

Rhode Island General Laws and Regulations do not permit RIMS to file a lawsuit directly. Individual practices subject to the tax must pay the tax, and then request a refund from the Division of Taxation.

If a denial for a refund is received, the taxpayer has 30 days to request an administrative hearing before the tax administrator. If the tax is upheld by the hearing administrator, the taxpayer is then entitled to a hearing in the Sixth District Court., and if the results of this hearing is unfavorable, the taxpayer may seek a hearing in the Rhode Island Supreme Court.

• Read the Legal Details memo from RIMS counsel
• Read the Appeals Process memo from RIMS legal counsel
• Read the RI Medical News article
• Read the Providence Business News op-ed by Dr. Barry Wall

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What to do if you are subject to this tax

RIMS is fully prepared to provide guidance to the individual providers as the process proceeds. Every provider is encouraged to enclose a letter requesting a refund with each monthly payment. Suggested language for a refund letter is available for download below.

STEP 1
Send a letter (via certified mail, return receipt requested) requesting a refund with every monthly tax payment to:

State of Rhode Island Department of Revenue
Division of Taxation
One Capital Hill
Providence, RI 02908-5811

You can download draft letters in MS Word format here:
• Letter for Surgery tax refund
• Letter for Imaging tax refund

If you receive a denial for a refund from the Division of Taxation, let RIMS know by sending an e-mail to Steve DeToy at sdetoy@rimed.org. You have 30 days after receiving a denial to request a hearing. RIMS will provide sample language to request a hearing.

STEP 2
It appears likely that our legislators will revisit this law when they convene in January although the possibility of repeal seems unlikely. Start calling your local state legislators now to express your outrage regarding this unfair and discriminatory tax. Let them know that the impact of this tax will be to shift these services to more expensive settings, decreasing access to care and increasing costs to patients and the health care system. Also let them know that as these services are reduced, staffing will likely have to be cut, resulting in lost jobs. You can contact your representatives by going to Grassroots Advocacy.k

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How to inform patients about this surcharge

IMPORTANT DISLAIMER
Please be advised that a medical practice’s decision to pass through or otherwise seek reimbursement from patients for the 2% provider surcharge may have legal implications. RIMS does not advise its members on legal matters. Before making any decisions that may have legal implications, members should consult with a qualified legal professional for specific legal advice tailored to their situation.

You will have to decide whether your medical practice will seek reimbursement from patients for the 2% surcharge, or whether your practice will absorb the added expense. Suggested language for letters for either scenario are available for download in MS Word format:

• Letter about Absorbing surcharge expense
• Letter about Collecting surcharge expense

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How to contribute

RIMS will require significant financial support in order to conduct both a legal challenge and to launch a successful public campaign to recruit support from patients and the business sector.

Please give generously to RIMS' legal advocacy fund when your voluntary contribution is solicited.

Although the current provider tax specifically targets physicians providing imaging services and ambulatory surgical centers, this unprecedented legislation threatens all health care providers. Lack of a strong outcry now may encourage future, more broad based “surcharges” affecting many more physicians.

Encourage all of your colleagues to respond.

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Updated 10/10/07