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Governor And Top Lawmakers Reach Healthcare Pricing Compromise

This is a picture of a hospital bed

Massachusetts Governor Charlie Baker and the leaders of both state legislative bodies have come to an agreement they hope avoids a ballot question calling for regulation of hospital payments.Baker, Senate President Stan Rosenberg and House Speaker Robert DeLeo announced the deal Wednesday. The plan creates a $45 million Community Hospital Reinvestment Trust Fund by redirecting assessments that fund the Center for Health Information and Analysis budget. All hospitals with prices below 120 percent of the state median price will be eligible for annual relief payments from the fund over a five-year period.  

The move is meant to avoid what Speaker DeLeo calls “a costly and divisive” ballot question and lend assistance to community hospitals. The Campaign For Fair Care has been pushing an initiative that would prohibit healthcare providers and private health insurance companies from entering into contracts that pay hospitals more than 20 percent above the average amount paid to similar providers for the same services. It would also stop contracts that pay hospitals less than 90 percent of the average amount paid to similar providers. Representing 52,000 healthcare workers in Massachusetts, SEIU1199 United Healthcare Workers East was the main campaign driver. In a statement Executive Vice President Tyrek Lee says the agreement is the first substantive step toward leveling the Massachusetts healthcare playing field. Lee spoke with WAMC News in March.

“If you look at a hospital that’s not fully funded they’re not able to maintain certain services that a particular community would need and they’re also not able to provide the good jobs that also stay in the communities,” Lee said.

Senator Ben Downing, a Democrat from Pittsfield, filed legislation similar to the ballot initiative. He says the compromise will be substituted for the bill.

“I think it is most importantly a win for community hospitals,” Downing said. “It creates a framework in which we can have a sensible discussion about healthcare pricing and hopefully in so doing take pressure off of our state budget and most importantly allow people to have access to care as close to home as possible.”

Wednesday’s agreement also authorizes up to $15 million in rates to be returned to hospitals in addition to the $250 million hospital assessment proposed in the fiscal 2017 budget. The deal also reforms a price variation commission by adding the heads of the Legislature’s Joint Committee on Health Care Financing as co-chairs.

“The commission has to meet by September and they have to meet once a month,” Downing said. “There are any number of component parts that will ensure that this commission is not just a fig leaf, but rather it’s a working commission that has to put forward a product. Because we know that this is such a difficult issue that folks will want to avoid tough decisions. This basically mandates those tough decisions be made and that action be taken no later than March.”

SEIU1199 also announced a partnership with the state’s largest healthcare provider Partners Healthcare, which was set to lose hundreds of millions of dollars if the ballot initiative passed. The union says the alliance will work together to deliver high quality healthcare, support fair pay and good jobs.

The Massachusetts Hospital Association, which opposes both the ballot initiative and Downing’s original legislation, called the solution a constructive step forward that is superior to the “misguided rate setting process” proposed in the ballot question.

Wednesday’s agreement must be approved by lawmakers and signed by Governor Baker before going into effect. If approved, SEIU1199 intends to pull the ballot question.

Jim is WAMC’s Associate News Director and hosts WAMC's flagship news programs: Midday Magazine, Northeast Report and Northeast Report Late Edition. Email: jlevulis@wamc.org
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