INSIDE THE ISSUE

> CBO: Uninsured Rate Would Rise
> Protecting 340B
> Advocating for the Safety Net
> The Cost of Violence
> Primary Care in Mass.
> Claims Rejections Overturned
> Transitions

MONDAY REPORT

CBO Paints Bleak Picture of Reconciliation Bill

The Congressional Budget Office – the nonpartisan group that produces reports and cost estimates on proposed legislation – has determined that the recently passed U.S. House reconciliation bill would increase the federal deficit by $2.4 trillion over the next decade and result in 10.9 million people losing health insurance coverage.

The CBO says that due to the bill, tax revenues would decline by $3.7 trillion over the decade, while spending would decrease by $1.3 trillion – resulting in the $2.4 trillion deficit. The majority of the spending cuts come from reductions to Medicaid ($700 billion) and the Supplemental Nutrition Assistance Program (SNAP, $267 billion).

The Medicaid cuts along with other policies contained in the bill would result in nearly 11 million people losing health coverage, the CBO wrote in this letter to ranking Democrats on the Senate Finance, House Energy and Commerce, and House Ways & Means committees.

Specifically, the CBO estimates that 4.8 million people would lose coverage due to the bill’s Medicaid work requirements. “Few of those disenrolled from Medicaid because of the policy would have access to and enroll in employment-based coverage and none would be eligible for the premium tax credit,” CBO wrote. Such unenrolled people seeking care would most likely require providers to shoulder bad debt. (See HSN story below.)

According to the CBO, the section of the bill that would reduce the federal matching rate for the Medicaid expansion population from 90% to 80% for any state that uses its own funds to provide coverage to certain immigrants through state programs would most likely result in states stopping use of those funds; that would result in another 1.4 million losing coverage.

The uninsured rate would also rise due to the bill’s requirements for frequent eligibility redeterminations and limitations on provider taxes, among other provisions. Also, proposals relating to the health insurance marketplace, such as reducing special enrollment periods from state as well as federal marketplaces, would also result in coverage losses, CBO says.

U.S. Representative Richard Neal (D-Mass.), the ranking member on House Ways & Means, joined the other two recipients of the CBO letter, Sen. Ron Wyden (D-Ore.) and Rep. Frank Pallone, Jr. (D-N.J.), as saying of the CBO report, “Every step of the way, this abomination of a bill creates barriers and mazes designed to demoralize and discourage Americans as they try to get affordable healthcare. The results of this cruel system are clear: millions will lose coverage, healthcare costs will go up for all Americans, and tens of thousands will die.”

Bills to Protect 340B Get a Hearing Tomorrow

The Joint Committee on Financial Services is holding a hearing tomorrow (Tuesday, June 10) on a slate of bills, including MHA’s priority legislation that would safeguard the 340B drug pricing program.

The 340B program is a bipartisan federal program created to protect hospitals and patients from high drug costs, while maximizing scarce resources to support essential healthcare services for historically underserved communities – all at no additional cost to taxpayers. 340B requires pharmaceutical manufacturers to sell outpatient drugs at discounted prices to healthcare organizations that care for uninsured and low-income patients. While federal authorities heavily regulate this program, it has come under increased threat from the pharmaceutical industry – both in Washington D.C. and in states across the country.

H.1296/S.779, An Act to Protect 340B Providers, sponsored by Rep. Sean Reid (D-Lynn) and Sen. Jason Lewis (D-Winchester), seeks to protect 340B providers from discriminatory practices by drug manufacturers, pharmacy benefit managers (PBMs), and commercial health insurers. Its provisions would prohibit such entities from imposing different reimbursement terms, exclusions, or conditions on 340B providers compared to other providers, an approach already adopted in numerous other states. The goal is to preserve the intent of the federally audited 340B program by ensuring that safety net providers like hospitals and community health centers are able to stretch federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. It would limit continuing efforts by drug companies to further inflate their profit margins at the expense of these providers and the patients they serve.

“At a time when safety net providers are barely getting by, 340B is a rare solution that should be embraced – not stripped away by powerful national forces,” said Mike Sroczynski, MHA’s executive vice president and general counsel. “The bills before Financial Services will help preserve the important benefits of the 340 program in Massachusetts and help curb profit-focused attacks to weaken it.”

MHA to Conferees: Health Safety Net is Top Priority

Now that the Massachusetts House and Senate have each passed their versions of the Fiscal Year 2026 state budget, the conference committee designated to find consensus between the two documents has begun its work.

MHA last week sent a letter to the six conferees outlining the hospital community’s priorities in the budget. Topping that list is a plea to repair the Health Safety Net – the fund that is used to reimburse hospitals for care provided to uninsured and underinsured patients. The HSN is consistently underfunded and any shortfall in it must be absorbed by hospitals alone. Currently, the funding shortfall in the safety net program is estimated to exceed $250 million in fiscal year 2025, and could reach $290 million in fiscal year 2026.

In its budget, the House transferred $230 million from the Commonwealth Care Trust Fund to the Health Safety Net Trust Fund. Under state law, such transfers to the HSN are explicitly allowed to help reimburse hospitals and community health centers for eligible health services. The Senate, however, did not follow suit in its budget, although the Senate Chair of the Joint Committee on Health Care Financing Cindy Friedman (D-Arlington) said that while the amendment aimed at funding the HSN did not pass “at this particular moment in time for reasonable reasons,” the intent behind it was correct.

“MHA urges the conference committee to reaffirm the commonwealth’s commitment to Massachusetts healthcare by including this needed HSN shortfall relief in its final proposal,” MHA wrote to the conferees.

Workplace, Community Violence Cost Hospitals $18B a Year

A new report from the University of Washington, commissioned by the American Hospital Association, details how workplace violence and violence in the community are costing hospitals $18.27 billion a year.

Pre-event costs – that is, training, security, building re-design, etc. – totaled $3.62 billion in 2023. Post-event costs – healthcare, staffing, replacement and repair of infrastructure and equipment, legal costs, etc. – totaled $14.64 billion.

“There are additional impacts of violence to hospitals that cannot be quantified at this time due to limited data availability,” the researcher wrote. “These far-reaching consequences include the impact of workplace violence on public perception, staff recruitment and retention, legal concerns impacting hospitals, job satisfaction for healthcare workers, and the psychological impacts on healthcare workers who experience or observe violence. These interconnected effects underscore the complex and pervasive nature of violence beyond immediately measurable costs to hospitals.”

The report was prepared by Harborview Injury and Prevention Research Center, part of the University of Washington School of Medicine.

In Massachusetts, the efforts to curb workplace violence are front and center this legislative session. MHA, the Massachusetts Nurses Association (MNA), and 1199SEIU all support An Act Requiring Health Care Employers to Develop and Implement Programs to Prevent Workplace Violence (H.2655/S.1718). The bill would require all Massachusetts hospitals to develop a facility-specific risk assessment and then use that assessment to implement a comprehensive program to reduce the risk of workplace violence. That program, developed with staff, would include worker training, and provides a formal written violence prevention plan available upon request to all employees/labor organizations. The bill includes strong enforcement through DPH licensing, regular reporting, and job protections for affected workers that include additional paid leave for assaulted workers.

Every 36 minutes, a worker in a Massachusetts hospital is subject to an act of violence or a threat. This crisis has grown at an alarming rate in recent years, with healthcare workers experiencing a violent incident at least five times more often than the average private sector worker.

The bills pending at the State House also make it a felony to “knowingly and intentionally” commit an assault or an assault and battery on a healthcare employee while in the line of duty. This provision would not apply to people experiencing a behavioral health crisis, who are acting outside of their usual judgement.

It’s Hard to Find a PCP in Massachusetts

The state’s Center for Health information and Analysis, in collaboration with Massachusetts Health Quality Partners (MHQP), has released the latest update to the Primary Care Dashboard that tracks the performance of the primary care system using finance, capacity, performance, and equity measures.

As has been discussed in various forums, the availability of primary care physicians in Massachusetts is declining and lags other states. Physicians are leaving primary care and recent medical school graduates are not entering the field as much as they had in the past. All racial and ethnic groups in the state report that they have trouble obtaining necessary healthcare.

While MassHealth investment in primary care grew substantially in 2023, it was the only insurer to increase the proportion of primary care spending relative to total medical spending.

Study: Medicare Advantage Rejects, then Reverses, on Claims

In yet another troubling story about the Medicare Advantage program, Health Affairs in its June edition contained a study showing that 17.7% of 270 million Medical Advantage claims were routinely denied. But when claims were resubmitted – and only about 60% were indeed resubmitted – more than half (56.6%) of the denials were subsequently overturned.

“Providers therefore ended up losing 7.2 percent of the total dollars they initially billed for,” according to the authors of the study, from Harvard University.

A 2023 MHA study found that the lengthy process of contesting insurance company claims denials along with other unnecessary administrative costs from billing- and insurance-related practices cost Massachusetts hospitals and physician practices approximately $1.75 billion each year, all while driving clinician burnout and delaying patient access to care.

Transitions

Patrick Gilligan has been named CEO of Point32Health, the parent company of Harvard Pilgrim Health Care and Tufts Health Plan, effective June 16. Gilligan joins Point32Health from CWH Advisors, a management consulting firm. Prior to that he was chief commercial officer and executive vice president at Blue Cross Blue Shield of Massachusetts. Gilligan has a BA from the College of the Holy Cross.

***

David Cutler announced last Thursday that he was stepping down from his role as a commissioner of the Health Policy Commission (HPC). Cutler, the Otto Eckstein Professor of Applied Economics in the Department of Economics at Harvard University, was the longest serving HPC commissioner, holding the seat reserved for a health economist for 12 years. He was appointed originally by Attorney General Martha Coakley in 2012 and reappointed by then-Attorney General Maura Healey.

John LoDico, Editor