INSIDE THE ISSUE

> A Positive Week
> Graduate Nurses Okayed
> Alternate Spaces
> FY2025 Budget
> Waiver Amendment
> Change Breach
> Steward Bankruptcy

MONDAY REPORT

A Week of Progress for Massachusetts Healthcare

As it endures numerous ongoing stresses related to workforce shortages, capacity crunches, financial shortfalls, and cyberattacks – all layered atop uncertainties relating to the state’s third largest healthcare system – the Massachusetts healthcare system last week was handed a series of positive developments thanks to the legislature and Healey-Driscoll Administration.

Through its passage of a 2024 supplemental budget that provide new funding for migrant housing, the legislature also approved a provision in that budget that allows graduate nurses and nursing students in their final semester to practice at the bedside in hospitals under supervision. That COVID-era flexibility had expired. DPH last week also extended another important pandemic flexibility – the ability of hospitals to use alternate spaces to house patients.

Of similar importance, the Massachusetts House, working closely with Healey’s Executive Office of Health and Human Services – which itself had coordinated closely with a hospital workgroup convened by MHA – approved a new tax on hospitals to support increased MassHealth funding for hospitals. While the assessment on hospitals increased the net benefit in federal funds flowing back to Massachusetts and to hospitals also increased.

“These are exactly the types of policies that can help our healthcare community stabilize in the face of extraordinary pressures,” said MHA President & CEO Steve Walsh. “While this is not the end of the enormous challenges affecting patients and providers, Massachusetts government and the healthcare sector have once again demonstrated the creativity, flexibility, and cooperation needed to address those challenges. MHA and our members commend local leaders for this shoulder-to-shoulder push to protect accessible care and improve the lives of everyone in the commonwealth.”

See details of the week’s positive developments in the stories below.

Graduate Nurses and Nursing Students Can Return to the Bedside

The conference committee tasked with reaching agreement on a fiscal year 2024 supplemental budget last Wednesday announced it had resolved the main sticking points relating to funding for migrant housing and had crafted a proposal ready for approval by both chambers.

House and Senate votes on the bill (H. 4582) took place on Thursday and the legislation was sent to Governor Maura Healey.

The hospital community had been eagerly awaiting resolution of the supplemental budget as it contained a provision to extend the authority of graduate nurses and nursing students in their last semester of studies to practice at the bedside under supervision, but before the new nurses completed the lengthy licensing process. That workforce flexibility, first instituted during the height of the COVID-19 pandemic, ended on March 31. At a time when the entire healthcare sector is suffering from workforce shortages, the new nurse flexibility has proven invaluable to hospitals and their workers.

The conference’s compromise language on the grad nurses makes the flexibility permanent as opposed to merely extending it for one year. Upon the governor’s signing of the bill, hospitals will be able to bring the graduate nurses back to work immediately.

The supplemental budget also includes flexibilities that allow assisted living residences (ALRs) to provide certain basic health services for an additional year.

DPH Recognizes Capacity Crisis, Extends OK for Temp Beds

In addition to the graduate nursing flexibility the legislature passed last week (see above story), the state has stepped in with another sorely needed action to assist the healthcare system: the Department of Public Health (DPH) has extended its rule allowing hospitals to use temporary adult medical/surgical inpatient beds until April 1, 2025.

The bed flexibility was put in place during the pandemic and was helpful in allowing hospitals to deal with the massive influx of patients. Now, as most hospitals across the state are at full capacity and as patient volume increases, hospitals must continue to use alternate spaces to treat patients.

There are limits on what type of spaces can be used; post-anesthesia units and inpatient rehabilitation units are examples of spaces that can be converted to med/surg. DPH will not allow certain type of beds, such as those in psychiatric, substance use, or maternal/newborn units, to be taken offline to make room for med/surg beds. And DPH has specific guidance about how the alternative units must be configured – that is, hospitals must devote certain square feet to each bed, designate clearances at their sides, provide medical gases to them, etc.

In its guidance, DPH said the alternate bed extension would be the last it would issue, and that the policy would definitively end on April 1, 2025. However, in the coming months, DPH will issue special guidance addressing, among other things, formal licensure of the beds, or special waivers that may be used in the event the bed space is needed after that date.

The House’s FY2025 Budget

The Massachusetts House of Representatives wrapped up its work on its version of the fiscal year 2025 state budget last week, and now attention turns to the Senate budget plan that will be revealed in May.

While the budget obviously contains many essential funding priorities and new initiatives, perhaps none is as important to the hospital community as what was contained in Amendment #866, filed by Rep. John Lawn (D-Watertown) and bundled for passage in “Consolidated Amendment B.”

For many months, the Executive Office of Health and Human Services (EOHHS) has been working with MHA on a proposal to adjust the hospital assessment to support increased funding to hospitals. MHA and its hospital workgroup reviewed proposals and settled on an approach that the MHA Board of Trustees and EOHHS endorsed in early April. The EOHHS-MHA assessment plan was not completed by the time House Ways & Means crafted its FY25 budget proposal, necessitating an amendment so that it would be included.

Beginning in FY2025, the Medicaid assessment plan is expected to increase the annual net benefit to the hospital community by $441 million, prioritizing safety net hospitals. New tax rates and new tax groups of hospitals are included in the assessment – all of which must ultimately be approved by the Centers for Medicare and Medicaid Services. The new financing plan also benefits the state by $135 million annually, some of which will revert to acute care hospitals and community health centers through the Essential Community Provider Trust Fund.

Following the House approval, MHA applauded Speaker Ronald Mariano, House Ways & Means Chair Aaron Michlewitz, Joint Committee on Health Care Financing Chair John Lawn, Joint Committee on Public Health Chair Marjorie Decker, and their colleagues for their support and leadership on this key priority for hospitals and their patients.

MHA plans to work closely with the Senate as the assessment makes its way through the legislative process, while continuing to assess the risk of other potential cuts the administration is pursuing in the FY2025 spending package.

New Waiver Amendment Will Have Profound Effect on Patients, Providers

MHA last week applauded the recent federal approval of an amendment to the Section 1115 Medicaid waiver that governs how the state’s MassHealth program operates.

The current waiver, which contains first-in-the-nation health equity measures, was initially approved in September 2022. Since then, the Executive Office of Health & Human Services, has worked to identify and seek ways to enhance it that improve healthcare access and affordability for low-income residents.

The Centers for Medicare and Medicaid Services (CMS) this month approved the state’s amendment request, which among other things, provides federal funding to extend health insurance subsidies to more low- and middle-income Massachusetts residents who purchase health insurance through the Connector. The new waiver rules also allow 12 months of continuous MassHealth eligibility for adults, meaning that MassHealth will cover individuals for an entire year even if their income and other eligibility standards fluctuate during that year. Continuous eligibility for children under age 19 began in January 2024 under federal law.

To help address health-related social needs for those recovering from hospital care, the waiver will now provide coverage for up to six months of post-hospitalization housing for individuals experiencing homelessness, who would otherwise lack a safe option for discharge or recovery. This coverage will help to alleviate hospital throughput challenges. Temporary housing assistance will also be available for pregnant individuals and families with children who are experiencing homelessness and participating in the Massachusetts Emergency Assistance Family Shelter Program.

Another part of the amendment extends retroactive coverage to 90 days for all MassHealth applicants. That is, MassHealth will no longer strictly limit coverage for a person with low income who receives care, but who applies for MassHealth coverage after that care. With the previous 10-day retroactive coverage, such patients and providers were often saddled with bad debt for the care they received before they became enrolled in MassHealth. Now, with a 90-day retro-eligibility timeline, safety net providers have more time to get patients enrolled and be assured of coverage for care that occurred before the patient becomes a MassHealth member.

MHA’s Vice President of Healthcare Finance & Policy Dan McHale commended EOHHS for advancing these coverage expansions and for CMS’ collaboration and strong support of the MassHealth program. He said, “The benefits of this amendment further cements Massachusetts as a leader in healthcare coverage. The new waiver provisions will have a profound effect for patients and safety net providers by eliminating coverage gaps, expanding benefits, and increasing access to affordable health insurance for more Massachusetts residents.”

The Change Breach: Americans at Risk, Ransom Paid, Delays Continue

The Change Healthcare data breach has resulted in cybercriminals posting on the dark web personal health information files that involve “a substantial proportion of people in America,” according to a media statement from Change’s parent company, UnitedHealth Group (UHG).

“Based on initial targeted data sampling to date, the company has found files containing protected health information (PHI) or personally identifiable information (PII), which could cover a substantial proportion of people in America,” UHG wrote. “To date, the company has not seen evidence of exfiltration of materials such as doctors’ charts or full medical histories among the data.” Twenty-two screen shots of information were posted for about a week, UHG said.

The Change data breach occurred in late February and its effects on providers and patients continue to be felt. UHG confirmed last week that it had paid a ransom to the cybercriminals and noted that many of Change’s processes had been restored. It said medical claims were back to “near-normal” levels, but about 14% of payment processing capabilities are still affected.

The Healthcare Financial Management Association (HFMA) reported last week that providers are still having problems with so-called 835 files, which are electronic remittance files that were completely lost in the breach. UHG is providing workaround options for the files. Systems that help providers check eligibility are also inconsistent due to the Change breach.

At the height of the breach, the disruption was costing Massachusetts hospitals more than $24 million a day, according to an MHA survey.

A Steward Bankruptcy? And What Would Follow?

Health and Human Services Secretary Kate Walsh raised the possibility of Steward Health Care filing for bankruptcy in the near future.

Steward, the Dallas-based system that operates eight hospitals in Massachusetts, faces a payment deadline tomorrow, April 30, on $750 million in outstanding loans. In letters this month to a consortium of Steward lenders, the commonwealth’s two U.S. Senators, Elizabeth Warren and Ed Markey, asked for details on the loans and requested that each lender “reconsider your aggressive posture” and renegotiate with Steward to keep Massachusetts hospitals open.

Secretary Walsh told the Boston Globe, “Bankruptcy doesn’t mean the hospitals would close … The hospitals would be open, at least for a period of time.”

The potential closure of the hospitals or portions of them, and the general instability of the Steward system has affected all of Massachusetts healthcare. The Steward issue was one of the topics addressed at a Massachusetts Senate Post-Audit and Oversight Committee field hearing last Wednesday that looked at the totality of pressures afflicting healthcare in Southeastern Massachusetts. The Steward situation has also been the subject of meetings DPH has conducted with hospital and health center personnel to gauge how they would be able to handle a major disruption to Steward patients and workers.

John LoDico, Editor