MASSACHUSETTS NURSE NEWSLETTER :: January 2008

What’s up on the reimbursement front (besides hospital profits)?
Massachusetts health reform: Insurance industry stepping up pressure
By Mary Crotty

The insurance industry in Massachusetts is about to turn the heat up on Massachusetts hospitals. Health insurance executives announced plans in December to cut “several billion dollars” in health care costs in the commonwealth. In a major address at the State House on Dec. 3, James Roosevelt, Tufts Health Plan CEO, linked the future success of health reform in Massachusetts to the new drive to lower costs—this would be largely hospital costs.

Insurers plan to convene public hearings in early 2008 for providers (basically hospitals) to explain what is driving up their costs. Other plans include demanding more disclosure of revenues and expenses and setting up forums for the public to offer solutions. In a “you show me yours and I’ll show you mine” move, insurance industry executives are also challenging their counterparts in the hospital industry to post their top officials’ full compensation packages publicly if insurers post theirs! The new executive director of the Massachusetts Hospital Association, Lynn Nicholas, has responded that she would “welcome them to the table to discuss this.” That would be a fun meeting to listen in on.

Mass. health reform: the ‘Connector’
The motivation behind this is to make Massachusetts health reform work.

Known as the “Connector” and championed last year by Governor Romney and the insurance industry, the Massachusetts health reform project is so named because it connects people with insurance.

The idea is that everyone in Massachusetts gets covered by health insurance because it is now mandatory. By law, everyone in the state is required to obtain health insurance, and to show proof when they submit their tax returns. Serious financial consequences (tax penalties this year; next year penalties of up to half the cost of the insurance) result from failing to do so.

In the spotlight nationally
The national spotlight has swung on Massachusetts since it is the first state to mandate health insurance, which is feeding into discussion of health reform during the presidential nominating system now fully underway. Because many of the uninsured have limited funds, the ability of the insurance companies to offer people affordable policies will depend on their ability to pressure hospitals to lower costs, to keep premiums from continuing to skyrocket. The hospital free care pool funds that, in the past, were there to reimburse hospitals for patients without insurance and without funds has now been tapped out to cover costs related to the Connector board—thus the concern that this has to work or the outcome could be worse. In a move that seems related, Charles Baker, CEO of Harvard Pilgrim Health Care, has revealed that he will be taking the unusual step of joining the board of directors of Beth Israel Medical Center in Boston (think, “Fox enters the chicken coop”).

Joining the fray not to pay
According to Boston Globe health reporter Liz Kowalczyk, about half of Massachusetts hospitals say they have adopted policies to waive charges for serious medical errors such as wrong-site surgery and harmful medication mistakes. Others say they plan to follow suit, amid growing resistance from government and health insurers to pay for poor outcomes. state Sen. Richard T. Moore, D-Uxbridge, has filed legislation that would prohibit hospitals from charging for the 28 “never events” which were developed by the National Quality Forum, a nonprofit organization based in Washington, D.C. Blocking insurance payment for 28 events would surpass the new national Medicare rules (described on Page 5) that will shortly begin to block payment for eight conditions considered preventable. For more information on the “Connector,” contact Mary Crotty at 781.860.5743 or via e-mail at mcrotty@mnarn.org.