Global Payments

Mass. Health Care Costs: Evidence, Testimony, and Scrutiny

Posted in Global Payments, Health Policy, Health Reform, Payment Reform, Payment Reform Commission on October 6th, 2014 by MMS Communications – 1 Comment

“We’re not interested in just saving money, we’re also concerned aboutMassachusetts State House quality and access, but we need to do it in a way that we have the capacity to afford it,” said Stuart Altman, chairman of the Massachusetts Health Policy Commission, as he opened two days of hearings on health care cost trends in Massachusetts at Suffolk University Law School this morning.

Billed as an “opportunity to present evidence and testimony to hold the entire health care system accountable,” the Annual Health Care Cost Trends Hearing represents the first review of the state’s performance under the health care costs growth benchmark established in Chapter 224 in 2012. Over two days, the Commission is examining cost trends for public and commercial payers as well as hospitals and other providers.

Along with health care policy experts making detailed presentations, nearly 30 individuals – a list that reads like a “Who’s Who” of Massachusetts health care – are providing testimony on such topics as meeting the health care cost benchmark, transforming the payment system, coordinating behavioral health and post-acute care, and insurance market trends and provider market trends in promoting value-based health care.

The mood among the HPC commissioners and morning’s presenters as the session began was generally upbeat, as the Center for Health Information and Analysis (CHIA) last month released the first report on the Commonwealth’s performance. With the health care cost growth benchmark set at 3.6 percent, CHIA found that total health care expenditures increased by 2.3 percent , 1.3 percent below the benchmark. Total expenditures reach $50 billion statewide.

Governor Deval Patrick, one of the first to speak and declaring that “health is a public good,” said that “by any measure, Massachusetts health care reform is a success,” at the same time cautioning that even after eight years of health reform “there’s plenty of room to innovate” and “constant refinement” will be needed. Patrick added that challenges remain, chief among them the delivery of primary care.

Jeffery Sanchez, Chair of the legislature’s Joint Committee on Public Health, the second public official to speak, was also upbeat but cautious as well. “Let us continue to show the nation we continue to be a leader,” he said, at the same time expressing concern about behavioral health, alternative payment systems, and reaching underserved populations. He noted that minorities have difficulty navigating the health care system, and that it is imperative to “make sure the health care system is accessible and effective for all.”

Morning presentations included those from David Seltz, executive director of the Health Policy Commission; Aron Boros, executive director of CHIA, and Michael E. Chernew, Ph.D., Professor in the Department of Health Care Policy at Harvard Medical School. Other expert speakers scheduled include Alan Weil, J.D., Editor-in-Chief, Health Affairs, and Thomas Lee, M.D., Chief Medical Officer of Press Ganey Associates.

The hearing concluded at the end of the day on Tuesday. Written testimony, agency reports, and expert presentations are available on the HPC’s website at Live streaming of the hearing is also available from the website.

News coverage of hearings:

Health care stakeholders size up cost-control bid
State House News Service via Worcester Business Journal, October 7, 2014



The President’s Podium: Mass. Medicine, After Cost Control

Posted in Board of Medicine, Electronic health records, Electronic Medical Records, Global Payments, Health IT, Health Policy, Health Reform, Regulation, Uncategorized on December 9th, 2013 by MMS Communications – 1 Comment

By Ronald Dunlap, M.D., President, Massachusetts Medical Society  

Massachusetts entered its second phase of reform with the 2012 passage of DSC_0003 Dunlap 4x6 color 300 ppi_editedChapter 224, cost control legislation officially titled “An Act Improving the Quality of Health Care and Reducing Costs Through Increased Transparency, Efficiency and Innovation.”

While the first phase, Chapter 54 passed in 2006, was indeed landmark legislation and served as the model for the Affordable Care Act, Chapter 224 alters the state’s health care industry perhaps like no other law.

The changes this law brings are vast, from payment reform to giving the Attorney General new powers in the health care marketplace. Although 224 does include some benefits for physicians (medical malpractice reform for one), other provisions pose significant challenges, particularly for physicians in small practices. Here are two that raise concern.

Health Information Technology (HIT) One of the biggest challenges presented by Chapter 224 is its embrace of health information technology. Physicians will be required – as a condition of licensure – to demonstrate proficiency in all aspects of health information technology by January 1, 2015.

While MMS supports HIT and recognizes its intent to improve patient care, this provision of the law could severely disrupt medical care. Because the statutory language creating the requirement is tied to Federal standards of “meaningful use” (which in turn is tied to participation in Medicare and Medicaid), it raises concerns that strict interpretation of this provision would lead to denial of license renewals for some 26,000 physicians.  Our state has a high certification rate for meaningful use, with more than 14,000 physicians having met stage 1 requirements, but nearly 40,000 physicians have a Massachusetts license, and most are not included in the population targeted for meaningful use certification.

Additionally, the costs of establishing HIT can be huge. The outlay for such items as implementation, maintenance, software and hardware upgrades, conversion to Federal ICD-10 codes, training, and data conversion could approach well over half a million dollars for some practices while not including the “opportunity loss of income” from decreased productivity.  While the law allows for assistance to providers for HIT, the level of help is unknown, and the financial burden can be crippling to small practices.

The law further requires all providers to implement fully interoperable electronic health records that connect to the statewide health information exchange by January 1, 2017 (a goal not in sight) and imposes penalties for noncompliance. These technologies are not only critical for physicians to practice medicine, but also to participate in quality measurement programs.  The specter of this kind of commitment to HIT, however, with its financial outlay, is certain to make physicians pause and think, especially those close to retirement.

MMS has had lengthy discussions with the Board of Registration in Medicine (responsible for implementing the HIT requirement) and has testified in support of legislation to delay this requirement and provide relief to physicians. Our voice has been heard, and we are hopeful such relief will be forthcoming.

Data Collection and Reporting Chapter 224 is equally enthusiastic about data collection and reporting.  It creates a “provider organization registration program,” requiring organizations to provide detailed information about their operations: costs, financial performance, utilization, total medical expenses, and patient referral practices, among other information.  This data is hard to extract from many EMR systems.

This information will be collected by the Center for Health Information and Analysis (CHIA), a new independent state agency created by 224 that takes over most of the responsibilities of the Division of Health Care Finance and Policy, which was abolished by the law. Physician groups are now required – for the first time – to submit such data. The law contains language focusing on the reporting on risk-bearing groups while exempting smaller groups, but the applicability of this language has not been fully tested yet, so it isn’t clear how reporting requirements will be enforced and upon whom.

On a promising note, CHIA Executive Director Aron Boros told our House of Delegates at the Interim Meeting on December 6 that CHIA’s goal is to gather “reliable and meaningful” information through an “engaged transparent operation.”  He believes his agency must be “transparent, open, and collaborative” to build credibility.

The law also stipulates that by January 1, providers must disclose to patients within two working days of their request, how much a proposed procedure or service costs and what the health plan offers as payment.

I am not optimistic that physicians will be prepared within a month’s time to inform patients about specific or estimated costs for all procedures. We are encouraging legislators and the Health Policy Commission to implement the law incrementally, by considering the most expensive procedures first.

HIT and data collection/reporting requirements are but two areas that Chapter 224 dramatically changes. These changes, coupled with constant concerns over Medicare reimbursements as well as added requirements such as those imposed by ICD-10 codes, continue to strain physician practices.

What policymakers and regulators must keep in mind is that, even in a highly sophisticated medical environment like Massachusetts, no less than 64 percent of our physicians are in practices with fewer than 25 physicians. Policies and regulations that burden these practices and reduce their viability will not only affect the quality of care but will also reduce health care access for Massachusetts residents.

The President’s Podium appears regularly on the MMS Blog, offering Dr. Dunlap’s commentary on a range of issues in health and medicine. For a section by section analysis of Chapter 224, click here.  


Interim Meeting Ethics Forum: Ethics in ACOs

Posted in Accountable Care Organizations, Ethics Forum, Global Payments, Health Policy, Health Reform, Interim Meeting 2013, Payment Reform on December 6th, 2013 by MMS Communications – 2 Comments
Susan Dorr Goold, MD

Susan Dorr Goold, MD

The accountable care organization (ACO), loosely defined as a group of providers that accepts responsibility for the total care of a patient and is accountable for high quality care and the cost of care, is a rapidly growing concept whose aim is to reduce the rising costs of care and improve quality.

While the emphasis on ACOs has focused on cost and outcomes, less attention has been paid to the ethical considerations of delivering care within such a structure.  As the ACO continues to evolve, what are the ethical issues that physicians might face as they practice medicine?  Do healthcare institutions, as well as individual providers, face ethical issues as organizations? And how might ethical considerations influence payment structures?

These are some of the issues discussed at the Ethics Forum, held on the first day of the 2013 MMS Interim Meeting of the House of Delegates.

Presenting were Susan Dorr Goold, MD, professor at the University of Michigan and Chair of the American Medical Association’s Council on Ethical and Judicial Affairs, and Philip F. Gaziano, MD, chairman and CEO of Accountable Care Associates, a Springfield-Mass. based healthcare management company.

In two presentations over two hours, delegates heard perspectives on the practical and ethical challenges in making a transition to an ACO, who providers are accountable to and for what within an ACO while maintaining their first loyalty to the patient, conflicts of interest that may arise, and ways to protect patient autonomy while practicing in an ACO.

Some highlights from the presenters:

Dr. Goold, in a presentation entitled Strengthening Patient-Physician Trust in Accountable Care Organization, examined the elements of personal and organizational accountability that lead to strong physician-patient relationships.  Professionals, organizations and patients all have a responsibility in strengthening trust, she said: professionals with a duty to “seek trust from patients” based on openness and honesty, patients by being truthful and to trust wisely, and organizations as “moral characters” in modern society.

Dr. Gould also outlined the challenges to trust in physicians (patient expectations, requests, and demands) and health care institutions such as hospitals and payers (safety of personal information, treatment decisions, fair and prudent use of resources). She concluded with the notion that physicians and healthcare institutions have “moral responsibilities in health care” to include advocacy, competence, fairness, and honesty, among others.

Dr. Gaziano’s Ethical Considerations in Accountable Care Organizations focused on the payment considerations with ACOs, comparing fee-for-service to global payments (payments based on Relative Value Units) to Quality Value Units, a new designation created by his firm that provides the advantages of tracking and reporting in real time, predictive value, and the tracking of quality and budgets. He also addressed physician concerns: why ACOs are different from earlier cost-saving attempts like HMOs and opportunities within the new system of ACOs such as payments and managing budgets.

The presentations of both physicians are available on the MMS website here.


The Legislature’s Ambitious Health Care Bill: Steps Forward, and Concerns

Posted in Accountable Care Organizations, Global Payments, Health Reform, Mass. Legislature, Payment Reform on July 31st, 2012 by MMS – 5 Comments

By Richard V. Aghababian, MD
MMS President

(Update: The House and Senate passed the legislation today by overwhelming margins. Gov. Patrick is expected to sign the bill.)

The Legislature has produced an ambitious health care roadmap for our Commonwealth. It seeks to make health care affordable for the residents, businesses and government of Massachusetts, while fostering quality, access and innovation.

In many cases, the legislation strikes a responsible balance between the role of government as oversight entity, with the rights of private sector entities to operate responsibly. However, there are several areas where we have concerns.

Steps Forward

  • We are pleased that providers will be free to decide whether they want to participate in alternative payment methodologies. Global payments aren’t for everyone, and fee for service still has a vital role to play in our system.
  • The cost benchmarks locate a middle ground between the House and Senate proposals. We have advocated for higher benchmarks than the bill provides, and we have our doubts about sustainability of these benchmarks. We are pleased, however, that the legislation provides the opportunity for adjustments and corrections in future years.
  • We support the legislation’s decision to use a corrective action plan as the mechanism to hold providers accountable for their costs – as opposed to the more punitive measures outlined in previous proposals. In addressing payment disparities among providers, the bill fairly recognizes the real progress that the private sector has achieved over the last two years.
  • We are extremely pleased that the bill includes the Disclosure, Apology and Offer model of medical liability reform that we have championed for many years. We believe that implementing this alternative to traditional litigation will foster a climate of safety and openness in all health care settings, especially when a patient is harmed by an adverse medical outcome.
  • The commitment to full parity of mental health and behavioral health with other areas of medicine is most welcome.
  • We strongly support the proposals to address shortages in the health care workforce.
  • The initiatives to foster transparency of reliable cost and quality information will not only benefit patients, but will also assist providers in recommending the most effective and affordable tests, drugs and procedures for their patients.
  • We are pleased to support the wellness programs that are outlined in the legislation; prevention is the best medicine of all.


  • We are concerned about the impact of the bill’s very stringent reporting requirements on the smaller medical practices in the Commonwealth.  We will look to clarify how small practices will be impacted by the costs and burdens associated with reporting to new entities established by the legislation. The state must ensure that such efforts avoid duplication and provide a true net benefit to our Commonwealth.
  • We are concerned that the bill goes too far expanding the practice prerogatives of some groups of providers. In particular, we find that the favored status granted to limited service clinics to be unwarranted, and thinly supported by research or facts.  The classification of physician assistants as primary care providers also raises questions. We will monitor these developments closely and will be prepared to advocate for corrective measures if there are unintended consequences.

Clearly, the transformation of health care is only beginning. There is still much more work to be done.  The Massachusetts Medical Society remains committed to working with all stakeholders, as we strive for a health care system that is effective, affordable and accessible to all.

First Look at Payment Reform Legislation

Posted in Accountable Care Organizations, Global Payments, Health Policy, Health Reform, Mass. Legislature, Payment Reform on July 31st, 2012 by MMS – Comments Off on First Look at Payment Reform Legislation

349 pages.

7,489 lines.

The Legislature’s House-Senate conference committee finally released its consensus payment reform bill last night. The House and Senate are scheduled to vote on it today – just in time for the end of formal sessions at midnight tonight.

If you want to take a look at it yourself, here’s the full text and the Legislature’s own summary of the bill.

We’re analyzing the fine print and will comment later.

MMS Statement on the Release of Senate Payment Reform Legislation

Posted in Accountable Care Organizations, Global Payments, Payment Reform on May 9th, 2012 by MMS – Comments Off on MMS Statement on the Release of Senate Payment Reform Legislation

By Lynda M. Young, MD
MMS President

With the release of the Senate bill today, we now have two detailed legislative approaches to payment reform, along with the Governor’s legislation from last year.

We recognize the need to bend the cost curve in Massachusetts, and we will continue to work with the House, the Senate and the Governor for the remainder of the session to ensure that the final legislation aligns with the following principles.

We assert that the market is working, and has already been doing an effective job controlling the growth in the cost of health care over the last two years. The most responsible approach to continuing this trend would be to empower this market-led approach.

A market approach would afford us the best chance of ensuring that patients’ access to care is preserved; the delivery of quality health care is supported; that we continue to foster innovation; that we maintain the viability of physician practices, and protect the jobs of the many thousands of people who work in health care –without disruption or interruption.

We support an approach that establishes a reasonable cost control goal over a reasonable period of time. If these reasonable goals are not met, then a detailed review would be initiated, which would inform a set of targeted actions to fairly address the causes of the problem. Any benchmark below the annual growth in the state’s economy is too aggressive.

This is a very complex system. Massachusetts is already among the nation’s leaders in designing new models for the delivery of health care. State legislation should foster the innovations that are currently underway. It should allow us the opportunity to learn what works, and provide the flexibility to make corrections when needed. This is an imprecise science, and no one has done anything like this before. This must be a gradual learning process, conducted in a non-punitive environment.

We also need to be mindful of the risk that a new statutory framework could add administrative burdens on providers and payers who are already staggering under the weight of administrative mandates, many of which add no value to health care. We must simplify, not complicate the administration of health care.

We are pleased to see language modeled on the University of Michigan’s Disclosure, Apology and Offer approach to resolving patients’ claim of medical malpractice. This would lead to the faster resolution of cases, increase openness and honesty between patient and provider, allow for provider apologies, reduce the incidence of defensive medicine, and help control and reduce costs. We believe this model would vastly improve the experience of patients with an unanticipated medical outcome, and better foster a culture of safety in our health care system.

House Releases Payment Reform Legislation

Posted in Accountable Care Organizations, Defensive medicine, Global Payments, Payment Reform on May 4th, 2012 by MMS – Comments Off on 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.

Does Payment Reform Save Money? Comments on the Attorney General’s Report

Posted in Accountable Care Organizations, Capitation, Global Payments, Payment Reform on June 24th, 2011 by MMS – Comments Off on Does Payment Reform Save Money? Comments on the Attorney General’s Report

By Lynda Young, MD, MMS President

Attorney General Coakley’s new study this week on health care costs and payment reform has been generating a lot of discussion. Here are some thoughts from our corner.

We think it’s too early to declare payment reform a failure from a cost-cutting perspective. You can’t measure its effectiveness after just one year. Five years is a far more reasonable time frame to declare victory or defeat.

Further, the implied threat of more top-down rate regulation greatly concerns us. It hasn’t worked in the long run, because players always find a way around the rules and the unintended consequences are too great.

But we don’t want to be entirely negative. We applaud the attorney general’s observation that a variety of organization models can be effective, and that both physician-based and hospital-based groups can get the job done.

But perhaps the most important part of the report discusses risk management and risk adjustment.

As the attorney general noted, most physician groups are ill-equipped to handle significant financial risk today. To do so in the future, we will need much better data than we currently have. We will need a clear picture of who is in our practice group, their utilization patterns, and what they do when they seek care outside our group. Without this, it will be impossible to monitor our own efficiency or quality.

We also need good electronic health record systems that can communicate with physicians outside our practice. By and large, this is not possible today. Imagine how limited your cell phone would be if you couldn’t call someone who’s using a different cell phone provider. That’s pretty much what most EHR users face today.

We also need to ensure that physicians can stay in small practices if they want to, while enjoying the benefits of aligning with larger networks. To remain viable, most physicians will need to share IT costs, reinsurance costs, contracting expertise, and clinical information, while maintaining some measure of independence. Many patients would prefer that too.

The payment reform initiative has a laudable but challenging goal – to make care more affordable while fostering quality and innovation. We haven’t been able to do it yet, but if anyone can do it, it’s this health care community in Massachusetts.

Let’s keep trying.

Dr. Young is a pediatrician based in Worcester, Mass.

Risk Adjustment and Payment Reform: A New Webinar

Posted in Accountable Care Organizations, Global Payments, Health Policy, Payment Reform, webinar on June 15th, 2011 by MMS – Comments Off on Risk Adjustment and Payment Reform: A New Webinar

Every study of accountable care organizations recognizes that proper risk adjustment tools are critical to their success.

Without adjustments for case-mix severity and other issues, providers’ cost and quality measures can be simply wrong. For example, hospitals and physicians who treat a high number of seriously or chronically ill patients would unfairly have inappropriate funding, simply because they treat more people who are sick.

Last month, our House of Delegates declared that “proper risk adjustment” is an essential component of payment reform.

In order to take on a bundled, global payment or other related payment models, funding must be adequate, and adequate risk adjustment for patient panel sickness, socioeconomic status, and other factors is needed. Current risk adjustment tools have limitations, and payers must include physician input as tools evolve and provide enough flexibility regarding resources in order to ensure responsible approaches are implemented. In addition, ACOs and like entities must have the infrastructure in place and individuals with the skills to understand and manage risk.

On June 23, the MMS is hosting an important webinar on risk adjustment. It will cover why risk adjustment is important to your practice, its importance in the context of ACOs, global capitation, and medical home models. The webinar will also focus on a detailed description of the risk scoring and funds allocation processes.

The webinar content is particularly relevant to provider organizations that are about to enter into global payments, are already in such a program, or considering the creation of an ACO.

Click here for more information or to register.

Despite Travails, Internist’s Practice Stays Open to New Patients

Posted in Global Payments, Primary Care, workforce on June 8th, 2011 by MMS Communications – Comments Off on Despite Travails, Internist’s Practice Stays Open to New Patients

Richard Dupee, M.D., a Wellesley-based internist and geriatrician whose practice has about 10,000 patients, is among a dwindling segment of primary care physicians accepting new patients.

“It’s a matter of business survival,” explained Dr. Dupee, whose practice accepts several new patients every week, including MassHealth enrollees. “I need to keep [patient] volume up to stay in practice.”

Dr. Dupee also thinks closing a practice to new patients sends the wrong message to existing ones. “If you close a practice to new patients, some existing patients might wonder if you’re too busy to see them,” he said.

Of the many primary care physicians who have closed their practices to new patients (see the 2011 Patient Access to Health Care Study), Dr. Dupee said, “I think they’re interested in maintaining a more 9-to-5 lifestyle.” The same preferences motivate young physicians coming out of residency, “so they become employees, with guaranteed salaries, no nights, and no weekends,” he said.

Dr. Dupee is also an associate professor at Tufts University School of Medicine, where he teaches, among other courses, a small medical ethics seminar. “Most of those students are interested in primary care, but they get discouraged by the attitudes of the primary care doctors they work with who don’t love what they do…I love what I do.”

Having said that, Dr. Dupee is quick to itemize the daily travails of a small primary care practice: time wasted on paperwork and prior authorizations and low reimbursements. Increased pay for primary care may eventually come from savings due to better-coordinated care and stricter adherence to clinical guidelines. But in the short term, Dr. Dupee sees no solution to the pay disparity other than to rob Peter to pay Paul. “At some point, subspecialists may have to realize that some of those dollars will be maneuvered to primary care,” he said.

Dr. Dupee’s practice belongs to the New England Quality Care Alliance, a network of autonomous solo and group practices, IPAs, and academic physicians affiliated with Tufts Medical Center. His experience with payers as part of that alliance has convinced him that “global pay for Medicare patients makes sense.” What about the rationing that global-payment critics warn against? Dr. Dupee said that no matter what the payment or delivery system is, “doctors do not and will not deny appropriate care.”