INSIDE THE ISSUE

> The 2027 RFA
> The FY2027 State Budget
> Will the Legislature Act on 340B?
> Erasing Medical Debt
> Care to Certain Immigrants
> SCOTUS Immigration Rulings

MONDAY REPORT

Hospitals Raise Concerns with Proposed RFA Changes

The Medicaid Request for Applications, commonly referred to as the RFA, is the main contract between the commonwealth’s Medicaid program (MassHealth) and acute care hospitals, detailing payment and program policies for the fiscal year beginning October 1. Through discussions with the Executive Office of Health and Human Services (EOHHS) on the development of next year’s contract, MHA and hospitals have expressed concern and objections at what they say are state policies that will further destabilize, and not improve, the healthcare system.

The proposed RFA policies from EOHHS come at a time when the healthcare sector is facing a series of well-documented challenges, including: negative operating margins of hospitals and health systems, unsustainable pressures on the Health Safety Net, the fact that 300,000 currently insured Massachusetts residents are expected to lose coverage in 2027 due to the federal policies, along with workforce shortages and increased demand on already stressed hospitals.

“While the state rightfully attempts to improve the healthcare system through a focus on affordability and renewed cooperative action among various stakeholders, we’re concerned by this proposed set of RFA policies that run counter to statewide goals to support primary care and healthcare access, and to reduce administrative burden,” said Dan McHale, MHA’s senior vice president of healthcare finance and policy.

Among its proposals, EOHHS proposes eliminating MassHealth hospital reimbursement for telehealth medical visits while maintaining the physician component of telehealth. The hospital payment rate for telehealth covers nursing costs, the upfront and ongoing costs of establishing and maintaining a virtual infrastructure, ensuring that providers have secure platforms that are HIPAA-compliant, costs for software licenses, IT support, and language interpreters. Additionally, the hospital reimbursement for telehealth supports the staff who schedule appointments and conduct after-visit follow-up care, including referrals and other electronic health record documentation.

“If you cut the reimbursement for hospitals, then they’ll likely be forced to shift care – including primary care provided in hospital health centers and outpatient clinics – to in-person visits,” said McHale. “Those affected will be the patients who require follow-up care after inpatient stays as well as those with chronic diseases needing frequent check-ups. Many of these patients have mobility, transportation, and work/school schedule challenges. Their access to care will become more limited and challenging.”

McHale also expressed concern with MassHealth’s proposed “outpatient claim review” process, which is a persistent problem that providers already have with commercial insurers that comb through already-paid claims to make coding changes and policy adjustment to claw back reimbursements. Such procedures have proven to be administratively burdensome for both providers and insurers, diverting clinical staff attention from providing care to documenting and appealing claims.

“Hospitals continue to embrace change and thoughtful reform, but believe these and other proposed MassHealth RFA changes will do more harm than good,” McHale said. “We look forward to continuing our productive, cooperative talks with EOHHS in the coming weeks.”

MHA to Conference: Focus on Safety Net, Workforce Funding

The House-Senate conference committee combing through the two versions of the 2027 state budget are attempting to develop a compromise the legislature can send to Governor Maura Healey by the end of June. MHA weighed in last week with a brief letter to conferees asking that as they go about their work, they pay special attention to funding the Health Safety Net and to approving language that will create a more streamlined way of distributing funding to the mental health workforce.

Specifically, MHA is requesting that the committee support the House-approved budget language to transfer $37.5 million from the Commonwealth Federal Matching and Debt Reduction Fund to the Health Safety Net Trust Fund. That money is eligible for a federal match, meaning the woefully underfunded Health Safety Net would receive a $75 million boost as even more severe coverage losses approach.

The other major “ask” involves the pipeline to get more people into the behavioral healthcare workforce. Both chambers approved $500,000 to support the pipeline that brings together acute care hospitals, free standing psychiatric facilities, and local colleges, but the Senate included language that allows MHA to administer the program while also requiring greater transparency on the program’s partners, the demographics and post-program employment of students being assisted, and any budgetary recommendations to expand the program.

Legislature Asked to Step in to Halt Potentially Harmful 340B Policy

Because MassHealth has been unresponsive to concerns about its proposed 340B drug reimbursement policy, MHA and the Massachusetts League of Community Health Centers are calling on the legislature to impose a one-year mortarium on the agency’s plan.

On April 10, MassHealth proposed regulatory changes to pharmacy benefits in the MassHealth program, saying it would no longer reimburse for drugs that were bought through the federal 340B Drug Pricing Program if they are submitted via a pharmacy’s point-of-sale retail billing system. MassHealth further clarified that the changes would only apply to point of sales for those enrolled in MassHealth fee-for-service, although MHA and others have flagged that the proposed regulations are drafted in a manner that permits a wider carve-out than the proposal indicates. As much as 46% of the MassHealth population would be affected, MHA has determined.

At a public hearing in May, hospital and community health center interests, among other stakeholders, outlined how financially harmful and administratively burdensome the MassHealth proposal will be on providers serving the greatest distribution of lower-income individuals in the state. At that forum and since then, MHA has posited that the rulemaking apparently also violates the state law requiring that hospitals be given 180-days’ notice of any 340B changes. None of the arguments by any of the opponents appeared to have resonated with the agency, however.

In response, MassLeague President & CEO Michael Curry and MHA President & CEO Steve Walsh last Friday sent a letter to House Speaker Ron Mariano and Senate President Karen Spilka asking the legislature, before the session ends on July 31, to take “immediate action to delay the implementation of a controversial restriction in Medicaid-covered pharmacy benefits.”

The health center and hospital leaders wrote, “Without legislative intervention, the proposed change to limit MassHealth coverage of drugs purchased through the federal 340B Drug Pricing Program is anticipated to take effect next month, resulting in new financial losses and increased administrative burden for community health centers and hospitals. MHA and the Mass League respectfully request that the legislature adopt language to provide a one-year moratorium on this detrimental 340B drug limitation so that further analysis of the proposed changes may be undertaken.”

Medical Debt of 140,000 Mass. Residents is Reduced

Last week, the Atrius Health Equity Foundation and Undue Medical Debt announced that they were partnering to devote $170 million to reduce the medical debt of 140,080 low- and middle-income residents in Eastern Massachusetts.

Beginning around July 7, individuals will begin receiving letters informing them that between $50 and $450,000 of their debt has been paid off. The average debt reduced per recipient is $1,227.

According to a media release from the foundation, the debt relief is available for those who have medical debt that is 5% or more of their annual income or who earn at or below four times the federal poverty level ($63,840 per year for an individual person and $132,000 per year for a family of four). Patients are automatically selected, meaning there is no application process to receive the funding. MHA works as an intermediary between the Atrius Foundation, its partner in the initiative – the national non-profit Undue Medical Debt – and Massachusetts hospitals that previously have made a good faith effort to collect the debt. Debt is also sourced from debt buyers and collection agencies.

In June 2022, the Atrius Health Equity Foundation was funded by the conversion of Atrius Health into a for-profit corporation. The foundation now operates and is governed independently of Atrius Health. This is not the foundation’s first such debt-relief effort in Massachusetts; in March, Atrius devoted $42.3 million to help erase debt for 30,000 Massachusetts residents.

“Our goal at the Foundation is to help close the gap in life expectancy across Eastern Massachusetts, and medical debt keeps people from getting the care they need,” said Dr. Ann Hwang, president of the Atrius Health Equity Foundation.

“This extraordinary abolishment amount will change lives, provide financial and emotional relief, and support re-engagement with the health system,” Undue Medical Debt President and CEO Allison Sesso said.

Patients receiving the letters do not need to take any action, as the eligible medical debt will automatically be eliminated for those who qualify. There is no guarantee of future debt relief, and only the debts acknowledged in the letter are erased.

“Our healthcare providers see first-hand how medical debt impacts the patients in their care, and they are determined to be a proactive part of the solution,” said MHA President & CEO Steve Walsh. “These partnerships are critical in ensuring patients are empowered to move forward in their lives and seek the care that they and their families need.”

Letter to MassHealth: State Can Step In When Federal Policy Creates Gaps

A group of healthcare interests led by Health Care For All, and including MHA, last week sent a letter to MassHealth asking the state to provide health coverage to approximately 1,050 qualified lawfully present (QLP) immigrants who will lose comprehensive MassHealth coverage in October 2026.

QLPs are generally refugees, asylees, people with humanitarian parole, trafficking victims, and others who have survived violence and persecution in their home countries. This small group of Massachusetts residents are losing their MassHealth eligibility under provisions in the One Big Beautiful Bill Act (OB3). They will then most likely seek care funded by the Health Safety Net, which is already projected to experience a dramatic shortfall in funding this year and next year. Temporary Protected Status (TPS) citizens (see story below) are generally not considered qualified lawfully present immigrants.

“Coverage losses increase the financial strain on our health system, resulting in difficult budget decisions and contraction of services from providers who support uninsured patients,” according to the letter signed by 55 groups and individuals. “… Coverage losses are also linked to worse health outcomes: three out of four uninsured adults under the age of 65 reported that they skipped needed healthcare in the past year and they’re nearly twice as likely as insured adults to report health declines as a result of delayed or missed care.”

MassHealth estimates that 2,100 people in the QLP group will lose coverage due to OB3, but because of their age or pregnancy status some of those individuals will be eligible for other forms of coverage. The remaining 1,050 are at risk. The letter notes that the majority of the group is generally healthy, have not filed a claim in the past year, and that the QLP population will steadily decline in coming years due to the federal crackdown on immigration. So there’s not a great financial outlay to cover the group, the signees of the letter argue.

“The federal government is doing everything in its power to make the United States unwelcoming to newcomers,” the organizations write. “Massachusetts has an opportunity to take a different path and invest in continuing our longstanding commitment to universal healthcare coverage. Providing state-funded MassHealth coverage to QLP immigrants would be an important step toward preserving access to care while affirming that the commonwealth is welcoming to all.”

Healthcare Sector Expected to Be Affected by SCOTUS Rulings

The U.S. Supreme Court last Thursday, in two 6-3 decisions, allowed the Trump administration to end Temporary Protected Status (TPS) for Haitians and Syrians in the U.S., and allowed the government to physically prevent migrants seeking asylum along the U.S.-Mexico border from crossing into the United States.

TPS grants temporary legal status, work authorization, and deportation protection to foreign nationals from designated countries facing conflict, natural disasters, or extraordinary conditions making their return unsafe. Haiti received a TPS designation in 2010 after a devastating earthquake; Syria received the designation in 2012 due to the repressive regime of its leader Bashar al-Assad. The administration declared in September 2025 that Syria’s TPS would end, and ended Haiti’s TPS in November 2025. That led to the lawsuits, which eventually made their way to the Supreme Court.

The TPS ruling is expected to potentially result in the deportation of 350,000 Haitians and 6,100 Syrians from the U.S. It is estimated that Massachusetts is home to about 99,000 people of Haitian descent, of which an estimated 45,000 are here under TPS. Many of those are employed within the state’s healthcare sector, especially in nursing homes and other post-acute facilities.

The other case decided last week, Mullin v. Al Otro Lado, revolved around the question of when “an alien” “arrives” in the U.S. Is it when they are standing in Mexico at the border, or only when the individual crosses the border and enters the country? The court held that a person standing in Mexico does not “arrive in the United States” by simply attempting to cross and failing. A person arrives “in” a destination only when they physically enter its geographic boundaries. Because people waiting on the Mexican side have not technically “arrived in” the U.S., the immigration laws do not entitle them to an immediate inspection or give them a statutory right to apply for asylum while standing outside the country, Justice Samuel Alito wrote in the majority opinion.

John LoDico, Editor