Deval Patrick enacted legislation that targets the growth of health
care costs while improving health care quality and patient care. The
bill, which is the third major health care legislative effort in
Massachusetts since 2006, sets the first statewide target for health
care spending in the United States.
In particular, Massachusetts
aims to limit the growth of health care costs to the same level as
the state's economy. The bill creates mechanisms for capping growth
in health care expenditures and for restructuring the delivery system
to encourage coordinated care, quality and incentives to adopt
alternatives to the current fee-for-service methodologies. Major
highlights are provided below.
Health Care Cost Goals - Through 2017, the bill limits health care
spending to the Commonwealth's economy (i.e., the gross state
product). For the five-year period starting in 2018, spending would
generally be limited to a half percentage below the gross state
product. These limits are expected to reduce health care costs in the
Commonwealth by $200 billion.
Employer Incentives - The bill creates a new wellness tax credit (up
to $10,000 per employer) for employers that implement recognized
workplace wellness programs. In addition, health insurance
companies must provide a premium adjustment for small businesses that
adopt approved workplace wellness programs.
Transparency of Health
Costs - The legislation directs
health insurance carriers to disclose the out-of-pocket costs for a
proposed health care service and prevents patients from being
subsequently charged more than the disclosed amount. Moreover, health
insurance carriers must provide a summary of benefits to health care
consumers in an easily understandable format that shows the consumer's
obligation to pay for any portion of the claim.
New Insurer Surcharge - The bill imposes a new $225 million surcharge
on insurers to raise money for small community hospitals struggling
to provide low-cost alternatives, create a Prevention and Wellness
Trust Fund, and help small providers buy electronic health records.
This surcharge will be passed on to consumers in the form of somewhat
Care Payment System - The bill
requires the Commonwealth's Medicaid program, employee health care
program, and all other state-funded health care programs to
transition to new health care payment methodologies. The new payment
models incentivize the delivery of high-quality coordinated,
efficient and effective health care while reducing waste, fraud and
Malpractice Laws - The
legislation creates a 182-day cooling off period for the parties to a
medical malpractice lawsuit to seek a negotiated settlement, and
requires the exchange of certain information between the plaintiff
and defendant to promote early settlement. During this period, health
care providers may admit to a mistake or error and such admission may
not be used as an admission of liability in court, unless the
provider lies under oath. The law also creates a task force to study
defensive medicine and medical overutilization.
Containment - The law directs
state agencies responsible for the purchase of prescription drugs to
form a uniform procurement unit for bulk purchasing, and creates a
commission to determine methods by which the Commonwealth can reduce
the cost of prescription drugs for public and private payers.
Once again, the nation will
be watching Massachusetts as it implements novel health care reform
initiatives aimed at limiting health care costs and improving health
care quality and patient care.