Attorney General Martha Coakley says she’s confident that a new health care costs bill will help the state take on hospitals whose prices are based on market clout. The bill does not give the AG any new authority, but Coakley says it sets better standards for investigation. The AG says she will keep trying to fix health care pricing, but expects consumers and hospitals to do their part.
“The message is also that the industry and where they go is really important in terms of keeping costs down, keeping everyone insured, keeping high quality health care.”
The AG has issued two reports that say the power of Boston’s largest hospitals to demand high prices drives up health care costs for everyone.
This just in from Massachusetts attorney general Martha Coakley:
Aetna life insurance to pay more than $1 million for allegedly failing to cover mandated health insurance benefits and deceptively marketing student health insurance
At Least $500,000 in Restitution for Affected Massachusetts Consumers
BOSTON – After allegedly failing to cover certain medical services as required by state law and deceptively marketing its coverage to Massachusetts college students, Aetna Life Insurance Company (Aetna Life) will pay more than $1 million in civil penalties and restitution, Attorney General Martha Coakley announced today.
“When Massachusetts consumers buy health insurance, they should be able to feel confident that the coverage complies fully with Massachusetts law,” AG Coakley said. “Our office will continue to monitor the marketing and payment practices of health insurers to make sure that Massachusetts consumers are not being misled or denied benefits to which they are legally entitled.”
The AG’s complaint, filed along with the consent judgment in Suffolk Superior Court today, alleges that Aetna Life violated the state’s Consumer Protection Act by falsely marketing the scope of the coverage it offered to students. The alleged violations include overstating in marketing materials the aggregate maximum amount of certain Aetna coverage as $500,000 when it was really $50,000. The complaint also alleges that Aetna Life did not cover health services required by state law including mental health care, “pap” test screening, mammography, and preventive care for children up to age six. Continue reading
WBUR’s Martha Bebinger reports:
I’ve been waiting to hear from Governor Patrick on one of the most controversial health care cost control issues on Beacon Hill: what to do about hospitals that charge three, four or five times more for an MRI (and hundreds of other services) with little or no difference in quality.
Two reports from Attorney General Martha Coakley and at least two from the Governor’s administration (the latest here) say that inflated prices based on the market clout of major teaching hospitals are a major factor driving health care costs in Massachusetts.
Now we have some insight into the Governor’s position on this dicey problem. During a Greater Boston Chamber of Commerce breakfast Tuesday, the Governor was asked whether he wants a provision in the final health care costs bills from the House and Senate that would deal with what’s often called “price disparities” among hospitals? The Governor framed the problem as one of “market clout” and said dealing with the market clout of top Boston hospitals is in the hands of AG Coakley.
The AG, said Patrick, “has tools today to address these imbalances and we have to look to her office to use those tools.”
I called Patrick’s office to clarify. What “tools?” An aide says the Governor was referring, loosely, to the AG’s ability to file anti-trust charges against hospitals. Continue reading
The latest Massachusetts Association of Health Plans annual report is out, and it offers some very colorful visual reminders of a point many in the state have been making: To stem the growth in health care costs, payment reform is not enough; something must be done about the “market distortion” that allows some hospitals to charge far higher prices than others.
As illustrated in the chart above, in which the hospitals with yellow circles next to them have long been part of payment-reform-type plans yet remain relatively expensive, “Changing the way we pay is just not enough,” association president Lora M. Pellegrini said.
“You have to address the market power issues and the price distortion issues,” she said. “Legislation that deals with payment reform issues only and that doesn’t address market distortion issues is not going to fix our cost problem.”
Have you filed your Obamacare amicus brief yet? What? You haven’t? Then you’re way behind your fellow Americans — at least those in organizations with a dog in this fight. The Supreme Court is expected to consider Obamacare — better known as the Affordable Care Act or the federal health care overhaul — in March, and the deadline for some of the amicus briefs in support of the government was Friday. (“Amicus” = friend in Latin. Amicus brief: An argument from someone with a strong interest in the case, but who is not actually a party to the legal action.)
A few highlights on the Supreme Court’s “friends” in Massachusetts:
• Attorney General Martha Coakley filed her brief on Friday. From the press release:
BOSTON – Arguing that Massachusetts’ own experience supports the federal government’s basis for passing national health care reform, Attorney General Martha Coakley filed a brief today in the U.S. Supreme Court supporting the federal Patient Protection and Affordable Care Act (PPACA).
Massachusetts’ health care reform law served as a blueprint for the PPACA. In her brief, the Attorney General argues that the successful results from the Massachusetts law enacted in 2006, including a reduction of the number of uninsured people utilizing the “free-care” pool (so-called “free riders”), demonstrate that Congress had a rational and constitutional basis to enact an individual coverage requirement in PPACA. Continue reading
Massachusetts Attorney General Martha Coakley broaches three new tactics — or “pillars,” as she puts it — for containing the state’s health costs in her speech today to the Massachusetts Association of Health Plans. A long swath of the prepared text follows, but here are three key quotes:
•”We are considering requirements that providers disclose the full amount that consumers could be liable to pay, so that patients know in advance what they are agreeing to.”
•”When a provider does reach a certain level of market clout, it should trigger a market impact review to determine whether the provider’s size is having a negative impact on consumer choice, access, or healthy market function.”
•”Starting in 2015, if the market has not corrected unwarranted price variation, the administration should be able to reject health plan contracts with excessive or inadequate provider price variations. Health plans should be prohibited from paying provider rates that differ beyond a certain band. One example would be 20% above or 20% below the plan’s average price for the previous year. Any savings would then be directed to consumers in the form of lower premiums. Finally, I believe we should make this market intervention temporary.”
WBUR’s Martha Bebinger is at the MAHP conference and will be gathering reaction. Please stay tuned, and your opinions are deeply welcome in the comments below. Now for the text, with deep thanks to the Coakley staff for the camera-ready copy: Continue reading
Here’s the WBUR report, and below is the full release from Coakley’s office and the full Blue Cross statement:
BOSTON — The state’s largest insurer plans to rebate $4.2 million to its ratepayers to offset the cost of a controversial severance package to former chief executive Cleve Killingsworth.
Attorney General Martha Coakley disclosed the decision by Blue Cross Blue Shield of Massachusetts on Wednesday following an investigation by her office.
Coakley said the probe determined that Killingsworth was entitled to the hefty severance package under his contract with the insurer, but that such contracts were “costly both in dollars and public perceptions.”
Killingsworth resigned in March 2010 after five years on the job. He left with a total compensation package of $11.3 million. That deal angered many Blue Cross members who are struggling to pay rising health care premiums.
“To put this issue behind the company and as a gesture of good faith to our customers and the community, the board has decided to credit customers the $4.2 million in severance that was paid to our former CEO,” said spokesman Jay McQuaide, reading from a prepared statement.
The rebate breakdown is just under $2 per person. Continue reading
In a lively conversation today with Radio Boston co-host Meghna Chakrabarti, Rachel explains the new, groundbreaking findings on how, in Massachusetts health care, the poor tend to subsidize the rich.
(Read her full post on that aspect of attorney general Martha Coakley’s latest report here.) Never slow on the uptake, Meghna says:
“This is what I think the biggest eye-opener was for me in your reporting on what the AG uncovered: It’s that it seems like there’s a health care triple whammy here.
One is that people in more affluent zipcodes in Massachusetts are just demanding more services.
Two, they’re going to the hospitals and doctors that are charging more for the same services.
And three, as you just said, since everybody pays roughly the same dollar value in their premiums, for working people it’s just a much larger percentage of their overall income that’s going to, as the attorney general put it, subsidize health care services for more affluent people.”
Yes, Rachel says. There’s a stereotype that poor people cost the health system more money but “in fact what the attorney general found is just the opposite. ”
So why are Partners hospitals so expensive? And why do health insurers pay so much more to one hospital than another? And why should low-paid Lawrence General Hospital get paid more if it’s earning good profits even now?
Michael Bailit, president of Bailit Health Purchasing, might want to consider a second career in television journalism. Fairly but unsparingly, he asked some of the leaders of the Massachusetts health care establishment today difficult questions that cut to issues at the heart of the state’s ever-rising health costs. Watching them answer made this morning’s Day 2 state hearing on health care cost trends actually, even, kind of fun. (If I feel this way, does it mean I need help?) Our Day 1 coverage is here and here.
Above, Partners HealthCare chief Dr. Gary Gottlieb answers Michael’s question about why costs are high at Partners. To sum up his answer in a word: Investments, in everything from technology to training to safety. Michael also pressed Gary a bit on whether some price variations are “unjustifiable.” What’s unjustifiable, Gary responded, is the underpayments to some high-quality hospitals. Michael: Can there be such a thing as overpayment? Gary: “Absolutely.”
Below, Tufts Health Plan chief James Roosevelt Jr. explains why Tufts pays more to one hospital than another of comparable quality, and admits in so many words, “Sometimes we pay higher payments because of market power.” Attorney General Martha Coakley’s report last week implicated the market clout of some health care providers as a key cause behind high payments that are helping to fuel rising overall costs.
And here, Lowell General Hospital’s president, Normand Deschene, explains why he thinks his hospital should be paid more. Continue reading
Attorney General Martha Coakley took the stage today at the Bunker Hill Community College auditorium to tell the audience that, according to the findings in her recent report, the health care marketplace is still dysfunctional and global payments alone will not bring medical costs down.
Speaking at the state hearings on health care cost trends, she reiterated that if the market “distortion” (in which some providers are paid far more for services without necessarily offering better quality) isn’t resolved, “temporary statutory restrictions,” should be imposed. After being asked several times and in several ways, what, exactly, might be involved in these government restrictions, she refused to offer any details. “We have to consider some action,” she said, but “we’re not going farther than that today.”
She was also asked if it was fair to condemn elements of global payments (which she does in her report, saying they’re not saving money, and that there are vast disparities in global payment deals between insurers and certain physician groups compared to other groups) since they are in their infancy. She offered a bit of myth-busting:
We’ve heard that [global payments] are in their infancy, but several of them have been in operation for five years [or more]. You did not see savings you might expect given expectations for global payments. Global payments in and of themselve don’t solve the problem, they are clearly part of the solution but they don’t solve the problem of market distortion.”
After Coakley’s panel was over, I tried to ask, once again, what should be done about the spending inequities and price disparities detailed in the report she issued last week. Here’s what she said: