It’s Time To Pay Up For Mass. Health Costs Law

By Martha Bebinger
WBUR

Guess who has to write the state a check for the lion’s share of funding for the newish health costs law?  Almost half the money will come from Partners Healthcare and Blue Cross Blue Shield of Massachusetts (see the charts below).

A little background: The law that’s supposed to improve health care quality quality and control costs also imposes a hefty fee on some hospitals and insurers (as well as some other “payers”). The law says the surcharge will raise $225 million for distressed hospitals, a prevention fund, electronic medical records and the agency that will bring the law to life.

Now we have the first drafts of who will pay and how much.  Among hospitals, only the Partners system, Caregroup (bet you haven’t thought of this organization for a while) and Children’s meet the criteria for the fee (the criteria are spelled out in draft regs at the bottom of this page). Partners took a $42mil charge, in anticipation, last year. Caregroup and Children’s have told the state they may ask for a reduction, claiming they don’t fit the criteria.

  1. Partners Healthcare – $42 million
  2. Caregroup – $11m
  3. Children’s – $8m

Now the insurers. Here’s the full list of 96 payors and their proposed fees. The top five are:

  1. Blue Cross Blue Shield of MA – $65m
  2. Harvard Pilgrim Health Care – $21m
  3. United Healthcare – $9m
  4. BMC HealthNet Plan – $7m
  5.  Neighborhood Health Plan – $7m

By the way, the law says insurers can’t increase premiums to cover this surcharge.

None of this is set in stone yet. The proposed regulations that define who has to pay, how these fees were determined, on what grounds hospitals can appeal, and what happens if the state brings in less than $225 are here (at the bottom of the page).

The insurers that handle mostly Medicaid patients are questioning whether they should pay a penalty, because the state would essentially be taxing taxpayer dollars (and there’s a bit of a shell game that boosts the federal reimbursement, but someone else will have to explain that to you). So this is still a work in progress.

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