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Voices in Healthcare

Wise Decisions Call for Wise Use

Congress made a wise decision today - to provide a six-month extension of enhanced Federal Medical Assistance Percentage (FMAP) payments to states. I commend the members of our congressional delegation who supported the extension, as well as the Governor and hospitals across the state who advocated for the extension. Now our state leaders have the challenge of deciding how to wisely and fairly distribute the much-needed funding.

The additional funding is critical for Massachusetts during this rocky economic period. It is extremely important that significant portions of the FMAP resources be used to maintain and restore vital healthcare programs.

Specifically, portions of the funds should be used to avoid further MassHealth payment reductions to hospitals. Unfortunately, the Patrick administration is currently considering further cuts to hospitals that build upon payment reductions they experienced in FY2009 and FY2010. We hope that with the infusion of this federal funding relief, the administration will reconsider their proposed actions.

MHA is particularly concerned by a Patrick administration proposal to eliminate approximately $75 million in MassHealth performance payments as part of the upcoming hospital MassHealth contract for rate year 2011, in addition to other planned payment cuts. These new cuts will further erode one of the major goals of the healthcare reform law - closing the MassHealth payment gap, and undermine the reforms that promote payments based on performance rather than just volume.

A portion of the FMAP funds should also be used to address other important healthcare priorities such as helping distressed hospitals, the Commonwealth Care Bridge program, and the Health Safety Net.

Governor Deval Patrick was instrumental in fighting for this FMAP money, as were hospitals. Now we need a collaborative effort to stop any further payment cuts to hospitals and to restore the necessary funding we lost. The health of Massachusetts residents, as well as the state's prospects for economic growth, depends largely on the ongoing vitality and contributions of the hospital community.

Important Progress, But Long-Term Healthcare Reform Remains the Goal

In these difficult economic times, the Massachusetts legislature has done laudable work to provide meaningful insurance rate relief to small businesses that is also consistent with comprehensive, long-term reform of the healthcare delivery and payment systems. The health reform legislation passed over the weekend is a responsible compromise that moves the Commonwealth's healthcare reform effort forward without stalling or de-stabilizing our healthcare-based economic engine.

If signed by the Governor, the legislature's proposal will help healthcare stakeholders build upon the progress hospitals have already made in bending the curve of cost increases – down 65 percent from 2008 to 2009.  But that progress is matched by concern that many vulnerable hospitals, including those who serve large financially distressed populations, are in need of greater support.

The compromise legislation has some positive elements – including expansion of transparency requirements, standardization of insurers' Medical Loss Ratios moving to 90 percent, and administrative simplification of the healthcare system.

Hospitals also support the legislation's provisions to establish limited open enrollment periods for individuals seeking health care coverage, moral obligation bond financing to support community hospitals and community health centers, and a piloted approach to small business purchasing collaboratives.

The hospital community advocated for many of the measures included in the final bill with state legislative and executive leaders. But comprehensive, long-lasting payment and delivery reform remain the only real solutions to sustain the progress we have all made in improving access to quality care while ensuring that such care is affordable. Hospitals are eager to get to continue their work on these latest important changes as we all collaboratively and thoughtfully progress toward our common goal of comprehensive healthcare reform.