House Releases Payment Reform Legislation

The Massachusetts House Friday released a comprehensive payment reform bill that seeks the cut $160 billion in health care spending in Massachusetts over the next 15 years.

House Speaker Robert DeLeo characterized the bill as an effort to balance the need to cut health care costs for employers and families with a desire to keep health care “a healthy part of our economy.”

Rep. Stephen Walsh, co-chair of the Joint Committee on Health Care Financing, said health care stakeholders “may not like everything [in the legislation], but you certainly will like something.”

The bill spans 178 pages and more than 3700 lines of text. Its provisions include:

  • There are firm targets to encourage health care providers to limit increases in health care costs. In Year 1, annual spending growth may not exceed the growth in the Gross State Product. In Year 3, that target is reduced to a half percentage point below the growth in the Gross State Product. If providers exceed these targets, the state is empowered to change payment methodologies, propose new legislation, require corrective action plans, or reopen providers’ contracts with insurers.
  • Providers whose costs exceed 120 percent of the comparable state median would be fined at 110 percent of their spending that exceeds that 120 percent level.
  • A comprehensive adoption of the so-called Michigan model of “disclosure, apology and offer” to resolve patients’ claim of medical malpractice. This includes the establishment of a 182-day waiting period upon the filing of a notice of a claim. It prohibits the introduction into evidence of a provider’s expression of apology or regret.
  • A powerful new independent agency, the Division of Health Care Cost and Quality, would consolidate the role of many existing agencies and oversee the implementation of the bill.
  • To improve transparency of prices and costs, there are new requirements on providers and insurers to publicly report costs and quality information, and patient cost-sharing.
  • It provides for loan forgiveness for primary care providers practicing in underserved or rural areas.
  • It seeks to simplify certain administrative procedures, and includes a requirement that all health plans must use the same two-page form for all prior authorization requests.
  • It requires that all patients have access to an interoperable electronic health record by 2017. The bill promises an unspecified amount of financial support to help providers develop their EHR systems.

MMS President Lynda M. Young, MD, applauded the inclusion of the Disclosure, Apology and Offer language in the legislation. “We’re very supportive of the approach outlined in the legislation, which we believe will vastly improve the experience of patients who experience an unanticipated medical outcome,” she said.

Dr. Young expressed concerns about the legislation’s cost control mechanisms. “While we certainly appreciate the need to make health care more affordable, we’re worried that the bill’s goal and timetables are too aggressive. We look forward to working with the House and Senate to develop mechanisms that address patients’ affordability concerns, without reducing their access to care, unduly restricting physicians’ ability to practice medicine, or putting a damper on our state’s culture of medical innovation.”

Dr. Young added, “We appreciate Rep. Walsh’s openness and diligence during this long process. He met with us many times, and listened carefully to everything he had to say. We look forward to working with him, and members of the state Senate, during the coming weeks and months.”

The full text of legislation is available here. We’re continuing to analyze its details and will publish the product of that analysis next week.

According to Speaker DeLeo, the House bill will remain in the Ways and Means Committee for further analysis. The Senate, for its part, is expected to release its version of payment reform next week.

Comments are closed.