Massachusetts House Releases Health Care Financing Reform Bill


On May 4, the Massachusetts House of Representatives released its first draft of the Health Care Quality Improvement and Cost Reduction Act of 2012 (H. 04070), a long-awaited bill to reform the Commonwealth’s health care financing system. The House bill reflects extensive hearings on Beacon Hill since the reform proposal presented by Governor Deval Patrick in February 2011. The release of a Senate bill may be imminent. After additional hearings in June, legislative action could be completed by the end of the current session on July 31. Estimates indicate that the House bill could save Massachusetts consumers $160 billion over 15 years.

The multi-faceted House bill would create an independent Division of Health Care Cost and Quality, governed by a public board with industry and consumer representation, charged with the responsibility to promote payment and delivery system reform among all payers in the Commonwealth, using tools such as accountable care organizations (ACOs), patient-centered medical homes, and innovative bundled, global, and pay-for-performance financing strategies. It would also create a wellness and prevention trust fund to expand community-based initiatives targeting preventable diseases, a health care workforce trust fund to improve primary care in medically underserved areas, a distressed hospital trust fund, and a health information technology fund.  

The House bill would limit aggregate health care spending in the Commonwealth to growth rates below the Commonwealth’s overall economic growth rates beginning in 2015 and extending beyond 2027; impose 10 percent assessments on charges for hospitals and other facilities that exceed 120 percent of statewide medians, to be transferred to the distressed hospital trust fund; promote integration of behavioral health and primary care; create a consumer health information website; increase transparency for consumers about charges and cost-sharing that they may be liable for; standardize prior authorization procedures; require meaningful use of electronic health record (EHR) systems and proficiency in computerized physician order entry (CPOE) and e-prescribing through state licensure standards; create a statewide interoperable health information exchange and data storage capability; and reform Massachusetts malpractice law to adopt successful disclosure and settlement methods pioneered by the University of Michigan health care system.  

The bill would also require the state Medicaid agency, which won approval from the Centers for Medicare and Medicaid Services (CMS) for a delivery system transformation strategy last December 20, to attribute each Medicaid recipient to a primary care practitioner; to develop a shared savings program with respect to recipients not enrolled in managed care organizations; and to implement an accountable care organization (ACO) or a medical/health home model for 25 percent of Medicaid recipients by January 1, 2013, 50 percent of Medicaid recipients by January 1, 2014, and 80 percent of Medicaid recipients by January 1, 2015.         

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Categories:Health and Human Services


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