INSIDE THE ISSUE

> Senate Reconciliation
> Statewide Healthy Work Academy
> Latest Hospital Finances
> Post-Acute Reforms
> Prior Auth Promises
> Transitions

MONDAY REPORT

Senate Presses On Despite Budget Bill Snags

The “One, Big, Beautiful Bill (OBBB)” reconciliation process hit a significant speedbump last Thursday when the Senate Parliamentarian ruled that several of the chamber’s healthcare-related provisions were in violation of budget-setting rules. Over the weekend, however, the Senate recalibrated and secured enough support to advance a revised version of the proposal to be voted on as early as today.

While budget reconciliation bills require only a majority vote of 51 in the Senate instead of the 60 votes usually required for passage, they must comply with the “Byrd Rule,” which treats any provisions that do not directly change the level of spending or revenue as extraneous. Among the proposals in the Senate’s original OBBB text deemed to be in violation of the rule were those restricting Medicaid provider taxes and excluding non-U.S. citizens from receiving Medicaid and Medicare (even if covered with state revenue). Senate Majority Leader John Thune (R-SD) responded to these rulings as “speed bumps,” and the Senate returned with a revised bill late Friday. The newer version eliminated a moratorium on provider tax increases but maintained an annual reduction in provider taxes that can be used in Medicaid expansion states. It also continued to reduce Medicaid state-directed payments; reductions to those important Medicaid financing mechanisms would begin in FY2028, one year later than first proposed.

Several GOP Senators have voiced opposition or sought revisions to the Medicaid cuts proposed in the Senate’s version of OBBB, which would institute $863 billion in savings over 10 years. The Congressional Budget Office reported that the latest version of the Senate bill would result in 11.8 million Americans losing health coverage by 2034.

One revision that gained traction last week is a proposal to create a rural stabilization fund to offset some of the initial impact from the Medicaid proposals, largely targeted for rural hospitals and community health centers. Many in the hospital community have noted that this aid fund – which grew from $15 billion in the original Senate proposal to $25 billion in the revised version — would still pale in comparison to $863 billion in overall cuts, and a handful of Republican Senators have publicly urged their colleagues to revert to the House-passed Medicaid language, which has Medicaid provider tax and state directed payment proposals that are deemed considerably less harmful for states and providers.

Regardless of the final language, the vote is anticipated to be close, considering Senate Republicans only have a 53-vote majority (54 with Vice President J.D. Vance) and with all Democrats expected to oppose the bill. Revisions to the bill are expected to continue even as floor debate begins. If the Senate ultimately passes a bill with significant changes to the House-passed version, the House will need to vote once again and its narrow majority mirrors the Senate. Several House GOP members from blue states said over the weekend that they would oppose the deeper Medicaid cuts in the latest proposal. The House passed its original OBBB version in May by a vote of 215-214-1.

Hospitals Launch Statewide Healthy Work Environment Academy

Last week, Massachusetts hospitals launched a statewide Healthy Work Environment (HWE) Academy, which will empower nursing teams to lead sustainable improvements in workplace culture, nurse retention, and patient outcomes.

The HWE Academy is part of a broader initiative that the MHA Board of Trustees approved in early 2025 to make the commonwealth a leader in healthy and innovative work environments for nurses and care teams. Every hospital has committed to adopting one evidence-based program to support frontline professionals, with the Academy serving as one opportunity for participation.

An initial cohort of 10 hospitals, coordinated through MHA, will work with the American Association of Critical-Care Nurses (AACN) and participate in its Clinical Scene Investigator (CSI) Academy’s Nursing Workforce Solutions program. The AACN program is a nationally recognized initiative that places frontline nurses at the center of workplace problem-solving. Through support from Johnson & Johnson to AACN, AACN is able to provide the program at no cost to the cohort.

Nursing Workforce Solutions is an intensive 18-month process led by AACN. Each participating hospital will identify a nursing team from one unit to address a specific on-the-job challenge that is hindering their ability to work at their best. Through a series of in-person and virtual workshops, those teams will design, implement, and sustain projects to address that challenge. They will have access to educational sessions and expert mentoring throughout their journey, and will be offered “train the trainer” resources to help scale their projects to other units in their organizations.

“This is yet another nation-leading approach Massachusetts hospitals and health systems are taking to support their dedicated care professionals,” said Patricia Noga, PhD, RN, NEA-BC, FAAN, vice president of clinical affairs at MHA. “MHA and our Board of Trustees are excited to support these nursing teams through this 18-month journey and make their ideas come alive at the bedside.”

The coordinated statewide initiative comes at a time of prolonged crisis for the entire healthcare system, and as workers struggle with burnout, administrative burdens, and increasingly complex patient needs.

The AACN program has already produced powerful results in Massachusetts. Through previous engagements with individual organizations, the program has led to a decreased average length stay for ventilated ICU patients within one hospital, reduced by half incidents of pressure ulcers in another hospital’s ICU, and led another hospital to a 100 percent decrease in patient handoff incident reports because of improved communication between units.

“Nurses at Massachusetts hospitals were among the earliest participants in the original AACN CSI Academy that this program is based on,” said AACN Chief Clinical Officer Vicki Good, DNP, RN, CENP, CPPS, FAAN. “At that time, their efforts measurably improved patient outcomes while demonstrating a combined fiscal impact of nearly $8 million in anticipated annual savings to their organizations. With a tight focus on implementing healthy work environments through nurse-led innovation, this collaborative effort will drive change to support our nursing workforce.”

Improving nursing engagement and reducing turnover are among the challenges the initial cohort has identified for team-specific projects.

“Nurses are problem solvers by their very nature, and they hold so many of the answers our healthcare system is looking for when it comes to improving our workplaces and caring environments,” said Nancy Gaden, DNP, RN, FAAN, senior vice president & chief nursing officer at Boston Medical Center and Co-Chair of MHA’s Workforce Leadership Task Force. “Our nursing leaders are thrilled that their frontline teams will have this opportunity to do a deep dive and take the lead on solutions that will empower their daily work and ultimately lead to better patient care.”

These hospitals are a part of the inaugural Massachusetts Healthy Work Environment Academy cohort: Baystate Wing Hospital, Beth Israel Deaconess Medical Center, Berkshire Medical Center, Boston Medical Center, Cape Cod Healthcare, Holyoke Medical Center, Newton-Wellesley Hospital, Tufts Medical Center, Spaulding Rehabilitation Hospital Boston, and Sturdy Health.

The statewide healthy work environment commitment is the latest initiative born out of MHA’s Workforce Leadership Task Force, which is composed of hospital and health system CEOs and nursing leaders. The Task Force previously helped launch the Find Your Place in Healthcare campaign to draw people into the caring field, as well as a first-in-the-nation effort to reform the credentialing process with clinicians’ wellbeing in mind.

Hospital Financial Findings Met with Caution

State data released last Thursday confirmed that Massachusetts hospitals are still operating on precarious financial footing.

According to the Center for Health Information Analysis’ (CHIA’s) latest report, 70% of reporting “hospital health systems” – which include affiliated physician practices – held negative operating margins through March 31.

The statewide median operating margin stood at 1.5% for that period, with 43% of reporting hospitals posting losses through March. While it was the first barely positive operating margin reported in many quarterly cycles, the hospital community urged strongly against the notion that their financial crisis is turning a corner – especially as potential Medicaid cuts and payment restrictions from Capitol Hill loom large.

“CHIA’s report reflects the strenuous work and difficult decisions hospitals have undertaken in recent years, with many still in the red and others eking out only a small margin,” said Daniel McHale, MHA’s senior vice president of healthcare finance and policy. “We fear these fragile financials could quickly spiral downward as hospitals brace for the impacts of upcoming federal Medicaid policies, and as they shoulder the costs of a faltering Health Safety Net program and pervasive financial pressures closer to home.”

Aside from the $250 million-plus Health Safety Net deficits that hospitals must shoulder on their own, providers are still managing a spike in labor and supply costs, the costs of unpaid care as 2,000-plus patients remain stuck in hospitals without the means to be discharged, $1.75 billion in unnecessary prior authorization and administrative burdens, and the resources needed to care for a sicker population in need of longer stays.

Post-Acute Care Reforms to be Heard Tomorrow

Access to post-acute care has become severely challenged in recent years due to commercial insurance obstacles, workforce and bed shortages, and prolonged legal proceedings, among numerous other factors that fall at the feet of hospital case managers and other providers. Tomorrow, the Joint Committee on Health Care Financing will consider MHA priority legislation to address these pervasive issues, which are driving long wait times, contributing to hospital bottlenecks, and keeping upwards of 2,000 patients from being discharged from hospitals at any given time.

Post-acute care plays an outsized role in creating a more coordinated and seamless healthcare experience for patients. These services, including rehabilitative and skilled nursing care, support people following a hospital stay, providing the specialized follow-up care they need to continue healing and regain independence. When patients cannot access these settings, the effects reverberate throughout the entire healthcare system.

An Act improving access to post-acute services, filed by Rep. Thomas Stanley (D-Waltham) and Sen. Pavel Payano (D- Lawrence), would make permanent the current expedited prior authorization pilot program for post-acute discharges that is anticipated to sunset in 2026. It would create a complex care case manager program to assist with hospital discharges, address pressure points in the legal process for patients without healthcare guardians, and introduce a range of supports for post-acute care hospitals themselves.

With Pressure from Feds, Insurers Make Prior Auth Promises

Some of the country’s largest insurance companies are making a new slate of promises to “streamline, simplify, and reduce” the prior authorization (PA) practices that have come under the national spotlight in recent months. Healthcare providers and patient advocates have long criticized excessive PA policies as a driver of care delays, caregiver burnout, and cost waste.

The health plans stated last Monday that they will be adopting six broad actions: reducing the number of services subject to prior auth, ensuring continuity of care for patients who change plans, improving communication and transparency around PA determinations, accelerating real-time responses, and ensuring medical reviews of denials are actually happening.

Among the nearly 50 health plans signing onto the commitment are large national companies UnitedHealth, Cigna, CVA Aetna, and Humana. Blue Cross Blue Shield of Massachusetts and Point32Health are the local insurers listed as signatories.

The announcement was made during a summit between the insurance lobby, HHS Secretary Robert Kennedy, and CMS Commissioner Mehmet Oz.

“Pitting patients and their doctors against massive companies was not good for anyone,” stated Kennedy. “We are actively working with industry to make it easier to get prior authorization for common services such as diagnostic imaging, physical therapy, and outpatient surgery.”

While the insurer commitments were met with praise from provider groups, some are adopting a “believe it when we see it” approach, noting that a similar consensus statement was put forth in 2018 and did not result in widespread progress.

“We are pleased with the industry’s recognition that the current system is not working for patients, physicians or plans,” said Bobby Mukkamala, M.D., president of the American Medical Association. “However, patients and physicians will need specifics demonstrating that the latest insurer pledge will yield substantive actions to bring immediate and meaningful changes, break down unnecessary roadblocks, and keep medical decisions between patients and physicians.

Meanwhile, the push for prior authorization reform continues closer to home. MHA, Health Care For All, and the Massachusetts Medical Society are supporting legislation that would require insurers to respond faster to PA requests; prohibit PAs for services, medications, and treatments that have historically low denial rates; and require a PA to be valid for the duration of treatment instead of having to be constantly renewed when the patient’s condition hasn’t changed, among many other practical, time-and cost-saving measures. Those bills are sponsored by Sen. Cindy Friedman (D-Arlington) and Rep. Marjorie Decker (D-Cambridge).

Transitions

John Herman has been named the next President of Tufts Medical Center, beginning in early September. Herman has more than 30 years of leadership experience in academic and community health systems, serving most recently as CEO of Penn Medicine Lancaster General Health, a part of the University of Pennsylvania Health System. He holds an Executive MBA from the State University of New York, a Bachelor of Arts in Biology from Canisius College, and an executive certificate in Managing Healthcare Delivery from Harvard Business School.

Governor Maura Healey has appointed Eric Paley to serve as the next Secretary of the Executive Office of Economic Development. Paley, like his predecessor Yvonne Hao, brings an entrepreneurial background to EOED. He is the Co-Founder and Managing Partner of Founder Collective, a seed-stage venture capital fund, and previously founded 3D imaging company Brontes Technologies. He holds a bachelor’s degree from Dartmouth College and an MBA from Harvard Business School. Paley will assume the EOED post in September.

John LoDico, Editor