Joint Committee on Health Care Financing
The Massachusetts Health & Hospital Association (MHA), on behalf of our member hospitals, health systems, physician organizations and allied healthcare providers, appreciates the opportunity to submit comments regarding legislation relative to significant changes in the provision of health coverage in Massachusetts. These include proposals to create a single-payer healthcare system, a Medicaid buy-in program, and a public option on the state health insurance exchange.
MHA and its member hospitals and healthcare systems strongly support the tenets of universal healthcare coverage and maintaining a robust system of patient access. We have endorsed and advocated for numerous health coverage expansions over the years, including: the state’s first 1115 Medicaid waiver in 1997; the historic 2006 healthcare reform law, Chapter 58 of the Acts of 2006; and the Affordable Care Act (ACA). The effect of these expansions in reducing the number of uninsured has been well documented and we are proud that the commonwealth has the lowest rate of uninsured in the country.
Challenges remain, including closing the remaining gaps in coverage and addressing the affordability of healthcare. Much work is underway on the latter, including numerous payment and delivery reforms that are showing early evidence of success. Collectively, the Massachusetts healthcare system has thus far beat the 2012 reform law’s ambitious cost containment benchmarks while continuing to provide high-quality care to patients. The concept of Accountable Care Organizations (ACOs) has been fully endorsed across government and commercial payers, with MassHealth leading one of the most innovative and significant changes in the country. Today, healthcare providers in 17 new ACOs are accountable for the total cost of care of 893,000 MassHealth enrollees, increasing their roles in managing patient care outside of their facility walls. While still early, these efforts show strong promise of improving patient health, reducing avoidable hospitalizations, and bending the MassHealth cost curve.
Massachusetts hospitals and healthcare providers are committed to further efforts to: improve care delivery; close the remaining coverage and access gaps; and make healthcare more affordable and sustainable. However, we are opposed to a number of proposals grouped under the “Medicare for All” banner, including HB1194 / SB683. These proposals carry significant risk for patients, healthcare providers, taxpayers, and our economy. We strongly believe such a system would have irreversible negative consequences on healthcare providers and their ability to: provide services; maintain a high-functioning workforce; exceed quality benchmarks; discover innovative treatments; and, for some, simply exist. Such a drastic change in the financing and provision of health coverage will put into question the high-quality healthcare system upon which all commonwealth residents rely. Instead of a complete overhaul that will require an immeasurable unwinding of the current system with unknown effects on all aspects of healthcare, we should instead focus on securing andbuilding upon all of the progress that we have made and continue making the system that we all depend on more affordable and accessible.
MHA also opposes SB674 which would require the Center for Health Information and Analysis (CHIA) to recommend a methodology for the development of a single-payer benchmark – defined as the estimated total costs of providing healthcare to all residents of the state under a single-payer healthcare system. CHIA, in conjunction with the Health Policy Commission (HPC) and Division of Insurance would provide an annual report detailing a comparison of the state’s actual healthcare expenditures for 2018, 2019, and 2020, with the single payer benchmark. If it is determined that the single-payer benchmark outperforms actual total healthcare expenditures, the HPC is then required to submit a proposal for single-payer healthcare implementation to the legislature within one year of the date that the report is filed.
MHA opposes this bill as it would require a costly exercise that will likely produce misleading and unrealistic results based on a hypothetical scenario of implementing a single-payer healthcare system. The process of developing a single-payer government rate-setting payment system is a significant and complex endeavor that would require extensive consideration of a myriad of variables. A daunting amount of decisions would need to be made in evaluating expenses across the entire healthcare spectrum, taking into account state resources, standards for payment, provider input costs, capital costs, investments to improve quality and care management, and ensuring access, to name a few. Such a proposed payment system would require broad and detailed input from the healthcare community, insurers, government payers, and the public. The proposed exercise in SB674 would undoubtedly fall short of attempting to replicate a true single-payer system and its findings would likely be misused. We also believe it would be a costly exercise for CHIA and the HPC, both agencies whose expenses are paid primarily by hospitals and insurers.
While not as sweeping as the Medicare for All approach, HB1132 would create a new Medicaid plan where individuals and employers could buy into Medicaid coverage. MHA strongly opposes this bill as it will also have serious consequences for healthcare providers and our existing insurance markets. The proposed Medicaid buy-in program would allow and likely incentivize employers to move low-income employees to the MassHealth program. MassHealth enrollees that have employer coverage are currently required to stay on these plans and receive premium and out-of-pocket payment support from MassHealth. HB1132 would suggest the opposite approach, which we believe is the wrong direction given the already large shift in lives from the commercial market to Medicaid. According to CHIA, MassHealth was the primary insurer for 19.1% of the Massachusetts population in 20181. MHA instead supports addressing incentives to keep employees on commercial insurance and enhancing the MassHealth Premium Assistance program so that it is easier to access.
For hospitals, patients with MassHealth primary insurance coverage currently represent 17.4% of the average hospital patient population – with many hospitals experiencing greater percentages given the disproportionate number of low-income patients they care for. MHA would be particularly concerned if there were to be a further shift of people from employer coverage to MassHealth, which would carry with it a substitution of commercial reimbursement rates with Medicaid payment rates. As we have reported frequently, MassHealth hospital reimbursement fails to fully cover to the cost of providing services to these patients. MHA estimates that MassHealth fee-for-service rates only covered 75% of the cost of care in FY2017. Losses of 25% on this growing population are not sustainable as healthcare providers are under a tremendous amount of financial pressure, includingthe efforts and risks associated with the new MassHealth ACO program and managing to the state’s healthcare cost growth benchmark.
HB1132 allows for the consideration of higher costs associated with the new Medicaid plan, with the possibility of additional funding both to improve provider payment rates or the MassHealth program generally. Putting aside our objections to the creation of the Medicaid buy-in plan envisioned in HB1132, we do not have confidence that such an approach would be used to support provider payments adequately or reliably over the long-term. MassHealth is dependent upon limited state and federal revenue while, at the same time, facing growing needs. This combination already fails to compensate healthcare providers adequately. By adding Massachusetts residents ineligible for Medicaid as well as employers to this mix, HB1132 will ultimately further create imbalance in resources and endanger the financial stability of healthcare providers.
For similar reasons, MHA is also opposed to SB697, which would create a “public option” insurance product for individuals and small groups to purchase on the state health insurance exchange. Under this bill, the state’s Health Connector would be charged with administering the creation of a health benefit plan and contracting with insurance companies to administer it – first with Medicaid Managed Care Organizations (MCOs) and then followed by the possibility of non-Medicaid MCOs two years later. The underlying financing of healthcare services would be assumed to be based on Medicare fee-for-service rates with potential adjustments to be determined by the Health Connector.
MHA believes the introduction of a public health insurance option under SB697 would exacerbate the government underpayment problem as Medicare fee-for-service also pays below the cost of providing care and reimburses hospitals far less than commercial payers. Shifting non-group and small group lives from commercial insurance products to a government payer would ultimately result in significant financial losses for healthcare providers. And depending on how this public plan interacts with the private insurance market on a competitive level, reimbursement from private insurance companies could also be reduced as they are forced to compete at government prices. In the Connector alone, the public option would be sold alongside the existing commercial products, thereby affecting insurance offered to the more than 280,000 people in the Connector today. However, the effect of the public option would extend to the entire non-group and small group merged market, causing major changes to the insurance market and the carriers that participate in it. Adding a public option to our state’s health insurance exchange based on Medicare rates will ultimately increase financial hardships on healthcare providers and could drastically reduce their services and economic output.
MHA strongly opposes SB722 which would allow Association Health Plans (AHPs) to operate in Massachusetts to the maximum extent allowed by federal law. This expansion of AHPs, as defined under federal law, would work to undermine our state’s efforts in providing near universal coverage to our residents and will fragment the state’s merged market risk pool.
Massachusetts has a long history of healthcare reforms. Prior to enactment of the Affordable Care Act (ACA), our state had insurance rules in place requiring carriers to provide coverage on a guaranteed issue basis and prohibiting exclusions in health insurance policies based on pre-existing conditions. In 2006, Massachusetts adopted health reform legislation aimed at providing health insurance coverage for all Massachusetts residents. The law included several provisions to further stabilize our health insurance marketplace, including requirements establishing minimum creditable coverage standards for adult residents, adoption and enforcement of an individual mandate, and the merger of our state’s small group market and individual market. Any effort to weaken these components and “cherry pick” healthy risk from our merged market will drive up premiums for those small businesses and individuals remaining in the pool. Current Massachusetts law continues to apply to health coverage offered to individuals and small employers. As described in M.G.L 176J, eligible small businesses that are within a Multiple Employer Welfare Arrangement (MEWA) are subject to the requirements under this statute as well as the provisions of any other applicable laws. These requirements have protected the citizens of the commonwealth and should not be altered to allow the federal approach to association health plans to proliferate in Massachusetts.
SB723 would remove any confidentiality protections for insurer data collected by the Center for Health Information Analysis under M.G.L. chapter 12C, section 10. It would instead require CHIA to release, at least annually, all hospital data (both inpatient and outpatient), as well as physician, practitioner, prescription drug, and other supplier utilization and payment data. Allowed amounts and submitted charges by provider would be required to be included. CHIA would not be obligated to develop a consumer transparency tool but, at a minimum, would be required to make the data available to the public on its website in a “raw but usable form.”
While MHA continues to support price transparency, we oppose SB723 as it would release thousands of lines of data that would not be meaningful or helpful to consumers. Since 2013, Massachusetts has had a law that requires payers and providers to, upon request, give consumers information on allowed charges for healthcare services. Health plans have been required to create websites with specific price information that reflect their provider contracts. Both of these are helpful to consumers seeking information either before they choose a provider or before they receive a service. In addition, CHIA has created a consumer-friendly website that provides price and quality comparisons for hundreds of procedures. The type of data dump proposed by SB723 would be unwieldy to use, confusing to consumers, and other than showing different allowed amounts paid by different carriers to a provider for a service, will be of no help to individual consumers in understanding their own costs and will be unlikely to have any effect on reducing overall costs or steering patients to high-value providers.
Thank you for your consideration of these important matters. If you have any questions or concerns or require further information, please contact Michael Sroczynski, MHA's Senior Vice President of Government Advocacy at (781) 262-6055 or msroczynski@mhalink.org