Massachusetts Health & Hospital Association 
INSIDE THE ISSUE
> 20% of Claims Rejected
> HHS Funding Bill
> Affordability Group
> Substance Use Disorder Policy
> H-1B Policies Bad for Healthcare
MONDAY REPORT
HPC Report on Claims Raises Questions, Lays Groundwork
The Health Policy Commission (HPC) last Thursday released the results of its recent inquiry into claims denials by commercial health insurance companies in Massachusetts, finding that of the 45.9 million claims filed in 2024, 20.4% – or one in five – were denied.
The most common reason for insurer claims denials was for “other administrative” causes, which the HPC defined as denials due to claims not meeting the plans’ rules and procedures, including timely filing, lack of correct documentation, and services that should be billed separately.
Claims denials have been a source of tension between providers, insurers, and patients for decades although cooperative work over the years – most recently through the provider-payer Mass Collaborative – have chipped away at the issue.
“The HPC report is an important, forward-looking first step that lays the foundation for action on the persistent problems that are part of the claims system,” MHA said in a statement. “MHA and our members look forward to being part of the future conversation along with insurers and other stakeholders.”
Nancy Ryan, the director of the Office of Patient Protection (OPP), which is subdivision of the HPC, presented the report to commissioners on Thursday. Insurers are required to report data on claims denials to the OPP and the Division of Insurance, categorizing by claim type, clinical category, and reason for denials. When asked how many of the denied claims were subsequently overturned on appeal, Ryan said, “We’re not really able to see that data based on the reports we receive from the plans.”
Commissioners said it will be important going forward to be able to answer that question, noting that each plan most likely has the overturned-claims data. MHA released a report – Better Care, Lower Costs in 2023 – showing how insurance reforms could remove $1.75 billion in healthcare spending waste from the system. That report found that 80% of initially denied claims in Massachusetts are eventually overturned. “Appealing each claim rejection – a process that often takes months, or even years – requires staff and resources that could be better devoted to patient care,” the report found. “Patients and employers ultimately bear these unnecessary administrative costs.”
Also unclear from the HPC report is how many of the denied claims were the result of automation as opposed to being made by a human. UnitedHealthcare is currently embroiled in a lawsuit alleging that the insurer uses its “nH Predict” algorithm to systematically deny claims that are subsequently overturned. The report presented to the HPC last week found that UnitedHealthcare has the greatest amount of claims denials in Massachusetts.
In its review of the HPC report, MHA noted a long list of other factors not referenced in the initial analysis that often lead to “administrative” denials; these factors will be important to consider as discussion on claims continue. They include excessive documentation requirements, the lack of 24/7/365 insurer availability, peer reviews that are not conducted by a clinician who specializes in the patient’s condition, the use of third-party companies to handle utilization management, and disruptions when patients change insurers.
HPC Commissioner Umesh Kurpad, who was formerly the former chief financial officer of Point32Health, said the claims denial report could lead the way to innovative thinking on the entire question of claims. For instance, he said that some provider-owned health plans could eliminate the filing of some claims entirely for patients who visit providers within the provider-insurer system. Kaiser Permanente currently uses this system; no claim forms are needed for standard visits to Kaiser Permanente facilities.
FY 2026 HHS Funding and Health Extenders Signed into Law
On Tuesday, February 3, the U.S. House of Representatives passed a package containing five of six remaining appropriations bills, including the bill funding the Department of Health and Human Services (HHS) and extending a set of health provisions.
The bill passed by a vote of 217-214 with Massachusetts House delegation voting against the package, as did the commonwealth’s senators in that chamber’s preceding vote. (However, the Massachusetts delegation has expressed support for many of the healthcare provisions within the bundles of bills.) The package also included a continuing resolution (CR) for the Department of Homeland Security (the last remaining agency without FY2026 appropriations), which is set to expire on February 13. President Trump signed the legislation that same day, ending a four-day shutdown of the affected agencies.
The healthcare policies in the law remain unchanged from what was previously reported. It includes $116.6 billion in discretionary funding to HHS, including $823.8 million for Title VII and VIII workforce training programs and investments in substance use disorder and behavioral health programs.
The extended health programs include:
- Medicaid disproportionate share hospital scheduled cuts for the remainder of 2026 through 2027 were eliminated;
- A two-year extension of Medicare telehealth flexibilities;
- A five-year extension of acute hospital-at-home authorization;
- One-year extensions of the Medicare-dependent hospital and low-volume adjustment programs; and
- A one-year delay of payment reductions for clinical laboratory services.
The package also includes reforms for pharmacy benefit managers, a directive to state Medicaid programs to streamline out-of-state provider enrollment for treating rare pediatric diseases, continued Medicare coverage for in-home cardiopulmonary rehabilitation services provided by telehealth, and separate national provider identifier numbers for off-campus hospital outpatient departments.
The Senate Committee on Appropriations released a summary of the funding bill.
Affordability Group to Meet Thursday
The Healthcare Affordability Working Group that Governor Maura Healey created last month is scheduled to hold its first meeting this Thursday, February 12. The 30-member group consists of policymakers, elected officials, patient advocates, insurers, employers, and nearly every sector involved in the Massachusetts healthcare system. MHA President & CEO Steve Walsh is a member. Its role is to deliver proposals – as quickly as possible, according to the governor – on ways to lower healthcare costs across the board. The first meeting of the group will be in person and will not be open to the public.
Federal & State DPH Efforts on Substance Use Disorder
President Trump has issued an executive order – Addressing Addiction Through the Great American Recovery Initiative – aimed at creating a “framework for addiction treatment [that] should parallel that of other chronic diseases — utilizing evidence-based care, scientific advancement, continuous support, and community connection.”
The initiative creates a working group led by the Secretary of Health and Human Services and the Senior Advisor for Addiction Recovery to “recommend all necessary steps to coordinate the Federal Government’s response to the addiction crisis.”
To carry out the order, last Monday HHS Secretary Robert Kennedy announced the $100 million “Safety Through Recovery, Engagement, and Evidence-based Treatment and Supports (STREETS) Initiative.”
HHS said the money would go towards “targeted outreach, psychiatric care, medical stabilization and crisis intervention, while connecting Americans experiencing homelessness and addiction to stable housing with a clear focus on long-term recovery and independence.”
HHS also announced a $10 million Assisted Outpatient Treatment (AOT) grant program to support adults with serious mental illness. “AOT is a civil court-ordered, community-based outpatient mental health treatment program for adults with serious mental illness who are unable to engage with conventional outpatient treatment and are unlikely to be able to live safely in their community,” HHS said.
In a parallel announcement, HHS declared that three medications for opioid use disorder (MOUD) – buprenorphine, methadone, and naltrexone – will be added as prevention strategies under Title IV-E, which supports families involved with the child protection system.
“States and tribes can now receive a 50 percent federal match to provide buprenorphine, methadone, and naltrexone to parents when children are at imminent risk of entering foster care but can remain safely in the home or in a kinship placement with access to these treatments,” HHS wrote.
Also last week, the Massachusetts Department of Public Health (DPH) issued new provider guidance entitled Accepting New Patients Prescribed Controlled Substances. The document notes that when a patient who has been prescribed opioids, benzodiazepines, and/or stimulants loses access to their provider, the disruptions can be traumatic. The DPH guidance is for new providers who accept patients with exiting controlled substance prescriptions and cautions that they “should not feel pressured to rapidly change a patient’s current medication or dose.” The DPH document provides best practices and links to many resources to assist prescribers meet the needs of new patients under their care.
KFF: New H-1B Policies Will Harm Healthcare Workforce
A new policy brief from KFF, the non-profit health policy research, polling, and news organization, finds that the H-1B visa policies from the Trump administration could have a deleterious effect on the nation’s healthcare workforce.
Individuals with H-1B visas are foreign workers with temporary approval to work in the U.S. in jobs that require special skills. The healthcare and social assistance fields have steadily increased the number of workers possessing H-1B visas in recent years. According to the American Hospital Association, physicians account for almost half of approved H-1B visas for medical and health occupations.
The Trump administration, however, has instituted changes that are expected to decrease the availability of skilled H-1B workers. For instance, the administration declared that employers filing a H-1B petition must accompany it with a $100,000 entry fee. (That decision is being challenged in the courts.) The U.S. State Department is now requiring that all H-1B applicants and their dependents change their social media profiles to “public” so the department can determine if they are “a threat to U.S. national security or public safety.”
“A decline in the supply of H-1B workers in the healthcare and social assistance industries could disproportionately impact states that employ the largest numbers of H-1B workers, lower income and rural areas where H-1B healthcare workers often are employed, and smaller employers who would face greater challenges paying the new $100,000 fee,” KFF concludes in its brief. “Research universities and university-affiliated medical centers, which are some of the largest employers of H-1B healthcare workers, also are likely to be disproportionately impacted at a time when they are already facing broader funding cuts. The resulting shortages in the healthcare workforce are likely to increase barriers to accessing healthcare, potentially affecting the health and well-being of the population over the long term.”