On July 31, 2012, the Massachusetts legislature, at the end of its current session, passed a first-of its kind overall health care cost control measure in the hope of saving billions of dollars over the next 15 years. Governor Deval Patrick is expected to sign the bill into law.
The massive 350-page bill contains the following key provisions:
- It establishes annual health care cost growth benchmarks, equal to or slightly below the overall growth of the state’s economy.
- It creates two semi-independent offices to collect and analyze cost information from insurers and providers, to ensure they are meeting benchmarks, and to work with them if their spending becomes excessive.
- It assesses insurers and providers $225 million to help financially troubled community hospitals, improve public health, and help providers adopt electronic medical records.
- It attempts to reduce malpractice lawsuits by creating a 182-day “cooling-off-period” for settlement talks before a patient can sue and allowing providers to apologize for an error without having the admission to be used against them in court.
- It directs insurers to disclose out-of-pocket costs in advance of a patient obtaining medical care and posting provider prices on a state website to enable consumers to comparison shop.
- It encourages insurers to adopt budget-minded systems for paying providers, and providers to form large accountable care organizations to coordinate all of a patient’s medical care.
The legislation also requires the state Medicaid agency and the state employee health care program to move to new payment systems, such as so-called global payments, which give providers a budget to care for groups of patients. This system is intended to replace the one which provides for paying a set fee for every visit, test, and procedure, currently thought to drive up the cost of care.