Reimbursement Rules Threaten To Cut Millions In Funding For Massachusetts Free Care Hospitals

Payments to Massachusetts safety net hospitals would decrease bymillions of dollars under proposed reimbursement rules that are part ofthe state's new health insurance law, according to state projections,the Boston Globereports. Under the proposed rules, the state's Free Care Pool -- whichwas funded by insurance companies and provided reimbursements tohospitals for treating uninsured patients -- would change into theHealth Safety Net Trust Fund, which will pay hospitals for treatingpatients who fail to obtain health insurance. All residents wererequired to obtain health coverage by July 1, and uninsured residentscould face tax penalties beginning next year.

Safety nethospitals say that few residents in low-income communities haveenrolled in state-sponsored subsidized or no-cost insurance plans, andas a result, hospitals will continue to provide high levels of no-costcare while reimbursement rates decline. Ellen Murphy Meehan, executivedirector of the Alliance of Massachusetts Safety Net Hospitals, said,"Our hospitals are unable to withstand the cuts," adding, "The cuts areeven more dramatic than what the state has estimated. Some hospitalswill see their payments decline by three-quarters."

Inaddition, the proposed rules have caused "friction between differenttypes of hospitals" because teaching hospitals would receive higherreimbursement rates than safety net hospitals for treating uninsuredpatients, the Globe reports. The rules take effect Oct. 1 and AMSNH is working to have the rules revised before they are implemented.

Sarah Iselin, commissioner of the state Division of Health Care Finance and Policy,said, "We'll be considering the feedback very carefully as we finalizethe Health Safety Net Trust Fund regulations" (Krasner, Boston Globe,9/13). An estimated 60,000 people will be exempt from the insurancerequirement because they will not qualify for subsidies but will not beable to afford other coverage options (Kaiser Daily Health Policy Report, 7/2).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.