Mass. Lawmakers Poised To Launch Health Care Payment Reform Efforts

Massachusetts in 2006 became the first state to enact legislation to guarantee near-universal coverage for its residents, and the state now is looking to control costs "in equally groundbreaking ways," the Washington Post reports.

In the coming months, state lawmakers are expected to launch efforts to rein in health care spending in the state, according to the Post.

Proposals Under Consideration

Last week, the state's Joint Committee on Health Care Financing advanced stalled legislation -- originally introduced by Gov. Deval Patrick (D) in February 2011 -- that by June 2015 would move all state health care providers to a value-based payment model and create a new government entity to facilitate the transition.

Meanwhile, the state Senate is expected to debate a similar bill in the next month.

The Senate legislation is expected to differ from the governor's proposal in that it will include a hard cap on state health care spending. According to state Health and Human Services Secretary Judy Bigby, many observers speculate that the lawmakers will seek to set a spending cap equal to the state's gross product minus between 0.5% to 2%.

State lawmakers also are expected to consider legislation that would change the way providers in the state are paid, by encouraging them to accept "global payments" to cover the cost of all the care provided to an individual or group. The expectation is that such payments would provide disincentive to provide unnecessary care.

No Government Direction Needed?

According to the Post, some business have shown they will accept changes in the way providers are paid, and some already have begun to do so without any prompting from the government.

For example, Blue Cross Blue Shield of Massachusetts in 2009 unveiled the "Alternative Quality Contract," a plan that seeks to pay physicians and hospitals based on the quality of care they provide.

Under the AQC, groups of providers accept a global payment to provide care to a set of patients and the providers can earn bonus payments -- up to 10% -- if the patients do well on 64 quality measures, including controlling blood pressure. The program -- which has enrolled 12 provider groups that provide care to 615,000 state residents -- slowed spending in 2011, according to a New England Journal of Medicine study.

The Post reports that the new payment system state lawmakers are expected to introduce likely will "loo[k] a lot like" the AQC.

Some Pushback on Spending Cap

Some groups have opposed a spending cap that is lower than overall economic growth and say it could harm patients, the Post reports.

Lynda Young, president of the Massachusetts Medical Society, said, "We don't feel that's feasible," adding, "It's very important for us to do cost control, but we also need physicians to have some say in the direction" (Kliff, Washington Post, 4/30).


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