INSIDE THE ISSUE

> CHIA’s FY2024 Report
> Gov. Signs Relief Bill
> UMMH Announces Satellite ED
> Government Shutdown Likely
> The Effects of a Shutdown
> Community Health Worker Bill

MONDAY REPORT

Annus Horribilis: CHIA Reports FY2024 Financial Details

The Massachusetts Center for Health Information and Analysis (CHIA) has closed the books on its review of hospital fiscal year 2024, which ran from October 1, 2023, to September 30, 2024, and the picture the state agency paints about that 12-month period is resoundingly bleak.

Acute hospital operating margins – that is, a facility’s revenue from operations minus all of its costs – was negative 2% in FY24. According to CHIA, 37 of 61 reporting hospitals had negative operating margins, meaning they lost money in providing care to patients.

Aggregate expenses across all acute hospitals increased by $2.9 billion (6.8%) from the previous fiscal year, after increasing by $3 billion (7.6%) from the year before that.

Outpacing those disturbing numbers for hospitals is CHIA’s FY2024 financial report on hospital systems, defined as consolidated healthcare entities, including acute care hospitals, non-acute hospitals, and physician organizations. The hospital health system median operating margin decreased by 0.3 percentage points, to -2.7% in 2024. Sixteen of the 22 systems in the state had negative operating margins, losing a total of $1.4 billion, according to CHIA. Behind the losses were a mounting list of financial obstacles, including a Health Safety Net shortfall, rising labor and supply costs, an increase in unpaid care for the thousands of people who could not be discharged to post-acute facilities, and a rising volume of sicker patients in need of longer stays.

One bright spot in the CHIA report involves the temporary labor costs that ballooned during the pandemic as hospitals searched for workers and paid exorbitant fees to “traveler” agencies. In 2024, such temporary labor costs decreased by $500 million from the year before, CHIA found.

FY2024 was also a down year for commercial health insurance company finances, as has been reported previously in Monday Report. Nearly all the plans examined in MHA’s Annual Health Plan Performance Report posted negative operating margins in 2024. Unlike prior years where health plan surpluses grew, aggregate health plan surplus fell from $6.2 billion to $5.6 billion in 2024.

“CHIA’s report is just the latest piece of evidence showing how tumultuous the financial landscape has been for Massachusetts healthcare,” said Dan McHale, MHA’s senior vice president of healthcare finance and policy. “With 60% of hospitals operating in the red and three quarters of hospital health systems reporting losses, the cost pressures that local providers faced in FY24 took an undeniable toll. Unfortunately, those pressures continue today, and the long-term outlook is even more daunting with changes coming at the federal level. That’s why the funding support just passed by the legislature and signed into law by Governor Healey [see related story below] is so critical for patient care – and it’s why the basic stability of our system should remain front-and-center in every healthcare policy conversation. MHA members are grateful to have the support of our state government and other stakeholders as we collectively do the hard work of stabilizing, innovating, and maintaining high-quality care.”

Governor Signs Important Hospital Relief Bill

Last Monday, in response to the type of financial pressures reflected in the CHIA report (see story above), Governor Maura Healey signed the much-awaited supplemental funding bill that transfers $77 million into the Health Safety Net fund and provides $122 million to high public payer hospitals. The law also provides $35 million to community health centers.

Both the Health Safety Net funding and much of the supplemental payments to hospitals are eligible for federal matching funds.

“It is important to support our hospitals and community health centers so our residents get the access and quality of care they deserve across Massachusetts,” the governor said. “We have the best hospitals in the world, but with existing strains on our healthcare system and the harm coming from President Trump’s budget cuts, we need to support our trusted institutions that provide people the care they need. I’m grateful for the legislature for passing this essential funding.”

Executive Office of Health & Human Services’ Secretary Kiame Mahaniah, M.D., said supporting the Health Safety Net is key since the it “represents the foundation of dignity in healthcare: a guarantee that you can receive emergency care wherever you are in the state, regardless of insurance status … We will continue to adapt to additional pressures on our Health Safety Net and work closely with stakeholders, including regular meetings with hospital providers, to ensure continued access to care for residents.”

MHA President & CEO Steve Walsh said, “We are profoundly grateful for the leadership of the Healey-Driscoll administration and legislators – including Speaker Mariano, Senate President Spilka, Ways & Means Chairs Michlewitz and Rodrigues, and Health Care Financing Chairs Lawn and Friedman – to meet this time of distress for our hospitals and health systems with swift action.”

UMass Memorial Health Takes Big Step to Create ED in Groton

UMass Memorial Health (UMMH) last week took a major step in bringing emergency care closer to the communities affected by Steward Health Care’s closure last year of Nashoba Valley Medical Center. UMMH announced at an event attended by state and local elected officials and community partners that it was launching construction of a satellite emergency facility at 490 Main Street in Groton.

The closure of the Nashoba Valley hospital left communities without timely access to emergency care, increased travel times for area Emergency Medical Services, and put a strain on other facilities in the region such as Emerson Health.

“This site is the culmination of the entire region’s vision,” said Dr. Eric Dickson, president and CEO of UMMH. “It started to become a reality when I first met with the fire and emergency response chiefs earlier this year, asking them, ‘Where would you put an emergency medical facility?’ Since then, we’ve collaborated closely about how we could invest in the community to address residents’ immediate concerns.”

The UMMH satellite emergency facility will provide the same level of adult and pediatric emergency services as a traditional ED, including a helipad for emergency transport, beds for emergency care or observation, and certain imaging services. The facility is expected to open by late 2026.

Among those attending the ceremonial groundbreaking were Congresswoman Lori Trahan,

Governor Healey, the President of UMass Memorial Medical Center Justin Precourt, local fire and EMS leaders, and UMMH’s Chief Operations Officer Cynthia Barginere.

Government Shutdown Grows More Likely

The U.S. Senate returns from vacation today to once again consider a short-term funding bill that would provide interim federal funding through November 21. However, it is unclear whether seven Senate Democrats will lend their support to meet the 60-vote threshold required to proceed to a vote.

President Trump is expected to meet today with the top four Congressional leaders to discuss a resolution to potentially head off a government shutdown.

Two weeks ago, the U.S. House passed, by a mostly party-line vote of 217-212, a continuing resolution (CR) that would provide interim funding through November 21. This proposal would extend expiring programs for the length of the CR, including telehealth flexibilities, Acute Hospital-at-Home, Medicare Dependent Hospital, Low Volume Adjustment programs, and other health extenders set to expire by this Wednesday, October 1. Congressional Democrats offered an alternative CR that would fund the government through October 31 and include the expiring health extenders, but would also extend the Affordable Care Act’s enhanced premium tax credits that were created in 2021 during the COVID-19 pandemic. The Republican proposal does not extend the credits.

The Senate held votes on both the House-passed CR and the Democratic alternative. Neither bill garnered the required 60 votes to proceed. Senate Majority Leader John Thune (R-S. Dak.) last week announced plans to make another attempt to pass the House CR today, but as of this publication’s deadline only one Senate Democrat has voiced likely support. This significantly increases the likelihood of a government shutdown at midnight tomorrow.

What Happens During a Shutdown? Hospital at Home Must End

Continuing resolution negotiations made little headway last week as President Trump canceled a planned meeting with Congressional Democratic leadership, and House Speaker Mike Johnson (R-La.) declared that the House would not come back into session until after the fiscal year starts on October 1. Also, last Wednesday, the White House sent a memo to all agencies directing that they prepare plans for massive federal employee layoffs in the event of a government shutdown.

During past government shutdowns, only employees deemed essential remained on the job, while others were prohibited from working, and none are paid, although they traditionally receive retroactive pay when funding is restored. Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) have sufficient funds through the first quarter of FY26, so reimbursement should not be affected in the short term. However, further guidance to Medicare Administrative Contractors is usually issued prior to a shutdown, describing how claims will be handled. In the past, the following activities did not continue during a shutdown: health care facility survey and certification, Health and Human Services (HHS) policy and rulemaking, contract oversight, outreach and education, and beneficiary casework. The HHS Office of Inspector General (OIG) traditionally continues its Health Care Fraud and Abuse Control enforcement actions, and the OIG hotline and disclosure programs remain in effect.

Last Friday, the Centers for Medicare and Medicaid Services (CMS) posted instructions saying that any hospitals with active Acute Hospital Care at Home programs must either discharge all patients within the programs or return them to the hospital, effective tomorrow September 30. The move inserts a further layer of instability into the healthcare systems as many hospitals have relied on hospital at home as not only a beneficial program for patients and their families but also for hospitals themselves attempting to ease overcrowding in their facilities. As of Monday Report’s deadline, a similar notice ending the telehealth flexibility had not been issued.

It is expected that when Congress reaches a short-term funding agreement, it will include an extension of both hospital at home and telehealth as both parties included the extensions in their CR proposals. While it is hoped such an extension would be made retroactive to September 30, there is no guarantee at the moment.

It’s Time to Fairly Reimburse Community Health Workers

The Massachusetts Legislature’s Joint Committee on Public Health holds a hearing today on MHA priority bills H.359/S.251, An Act Relative to Health Equity and Community Health Workers, sponsored by Rep. Marjorie Decker (D-Cambridge) and Sen. Robyn Kennedy (D-Worcester).

Community health workers (CHWs) are a component – perhaps the key component – of delivering care to oftentimes underserved communities, especially as many struggle to access primary care services. CHWs often share the language, culture, and experiences of the patients they are assisting, serving as a bridge between them and clinical providers. CHW services can range from chronic disease management, to mental health and substance use disorder care, and/or assisting with the complexities of navigating health insurance coverage and using digital health platforms.

While they are invaluable, community health workers are often only funded through unsustainable streams such as grants and donations due to their services being non-reimbursable through typical fee-for-service models. In fact, the statute recognizing and licensing community health workers as a healthcare profession includes explicit language to exempt their services from health plan reimbursement.

H.359/S.251 would require commercial insurers and MassHealth to reimburse for the covered services delivered by community health workers, which would, in turn, allow healthcare providers – including community health centers and hospital system – to pay them more equitably.

The legislation would also add behavioral health, mental health, and substance use disorder services to the core competencies of community health workers and establish a task force to examine the availability and long-term sustainability of community health workers in the commonwealth.

The legislation has garnered strong support from across the healthcare continuum. Among those expected to testify on Tuesday are MHA’s Senior Manager of Health Equity Walae Hayek, Executive Director of the Massachusetts Association of Community Health Workers Lissette Blondet, and Health Care For All’s Director of Policy Initiatives Suzanne Curry. Also scheduled to testify are community health workers and representatives from Baystate Health, Asian Women for Health, the City of Somerville, Mass General Brigham, Codman Square Health Center, and the American Cancer Society – Cancer Action Network.

Sepsis Resources Available

September was Sepsis Awareness Month, a time to look at one of the deadliest conditions and the steps healthcare facilities are taking to combat it.

Sepsis is the body’s extreme response to an infection that can occur anywhere in the body but most commonly in the gastrointestinal tract, the lungs, skin, or urinary tract. Without fast treatment, sepsis can quickly lead to tissue damage, organ failure, and death. According to a comprehensive study in JAMA that reviewed clinical and claims data, more than 1.7 million people a year in the U.S. (and 47 million worldwide) develop sepsis and at least 350,000 U.S. adults who develop sepsis die during their hospitalization or are discharged to hospice. Most cases of sepsis start before a patient goes to the hospital, and most people who develop sepsis have at least one existing medical condition like chronic lung disease or a weakened immune system.

MHA recently updated its sepsis page on PatientCareLink. The page contains links to, among many other resources, the: Advancing Sepsis Care in Emergency Medicine guidance created by the Massachusetts Sepsis Consortium, of which MHA is a member; Surviving Sepsis Campaign that is committed to reducing mortality and morbidity from sepsis and septic shock, which are leading causes of death worldwide; and Sepsis Alliance that brings together groups to educate and provide support to those affected by sepsis.

John LoDico, Editor