Massachusetts Bill Aims To Help Control Rise in Health Care Spending

On Friday, Massachusetts House leaders introduced a bill (H 4070) that aims to control rising health care costs by setting a growth rate for health spending and establishing a new government-like agency to enforce it, the Boston Globe's "White Coat Notes" reports (Kowalczyk, "White Coat Notes," Boston Globe, 5/4).

In 2006, Massachusetts became the first state to enact legislation to guarantee near-universal coverage for its residents, which lawmakers have noted did not include cost-control provisions (California Healthline, 5/1). The new bill seeks to rectify that issue.

Details of the House Bill

According to National Journal, the bill -- from the joint Committee on Health Care Financing -- would:

  • Create a quasi-governmental agency called the Division of Health Care Cost and Quality to monitor the shift from a fee-for-service payment structure to global payments for health care providers;
  • Set a cap on health care spending that is tied to the state's economic growth;
  • Authorize a 10% tax on hospitals that charge more than 20% above the state median price for a specific service if they cannot justify the higher price;
  • Give accountable care organizations greater prominence;
  • Emphasize increased care coordination through patient-centered medical homes and primary care providers;
  • Require providers to use electronic health records by 2017;
  • Create a 180-day "cooling off" period for medical malpractice cases, while both sides attempt to negotiate a settlement;
  • Provide funding for workforce training and development, and forgive loans to primary care physicians who practice in rural or underserved areas;
  • Make changes to Medicaid, including raising MassHealth payment rates to providers (Zimmerman/Goldberg, National Journal, 5/6); and
  • Require health plans to make health services prices more transparent to consumers (Levitz/Wilde Matthews, Wall Street Journal, 5/4).

State Rep. Steven Walsh (D), co-chair of the committee, said the proposal would reduce spending by $160 billion over 15 years. He added that annual health insurance premiums for families would decrease by an average of $2,000 below forecasts within five years ("White Coat Notes," Boston Globe, 5/4).

State Senate leaders on Wednesday are expected to release a similar bill.

According to the Wall Street Journal, health care cost-control legislation is expected to receive strong support in the Legislature. In 2011, Gov. Deval Patrick (D) introduced a similar measure to control health care costs and has been urging lawmakers to do the same (Wall Street Journal, 5/4).

Opposition to the House Bill

Lynn Nicholas -- president of the Massachusetts Hospital Association -- said the House bill's spending goals are "unreasonable and will impinge on our ability to deliver care at the level people expect" ("White Coat Notes," Boston Globe, 5/4).

Lora Pellegrini -- CEO of the Massachusetts Association of Health Plans – said that the group supports an overall target for reining in health care spending but that it thinks the effort now should be limited to the monitoring mechanism with the possibility of future legislation that would detail the enforcement mechanism (Wall Street Journal, 5/4).

Romney's Medicaid Plan Could Jeopardize Massachusetts' Health Care Overhaul

In related state news, Republican presidential candidate Mitt Romney's campaign plan to rein in Medicaid spending by limiting federal Medicaid funding to states could "dramatically undercut" the Massachusetts health reform policies he enacted as governor, according to some health care policy experts, the Boston Globe reports.

Although specific details of his Medicaid proposal have not been publicly released, Romney's "overall intent" would "probably cripple" the state law, which was financed by increased Medicaid funding, according to the Globe (Jan, Boston Globe, 5/4).

Michael Samms
It is sad that most cost reduction fixes includes an indiscriminate across-the-board freeze for reimbursement regardless of location, rural or urban. We must find a reimbursement innovation that effectively addresses over-served and under-served areas AND it should protect primary care physician income. This reimbursement innovation must be simple and work regardless of any regulatory changes and there must be no interference with a provider's medical and clinical judgment. This innovation must address appropriate levels of services in a specific geographical area while preserving appropriate patient services. There is an innovation that represents the solution needed. This innovation can be found at www.sesscoring.com

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