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.