Efforts to level out insurance revenue to hospitals advance as voter signatures certified


PITTSFIELD — Advocates of more equitable health insurance payments between community hospitals and larger institutions have met a key voter signature threshold for placing the issue on the November 2016 state ballot.

Legislative efforts with the same goal — filed by Sen. Benjamin Downing, D-Pittsfield, after the abrupt closing of North Adams Regional Hospital in 2014 — also continue. If the Legislature fails to enact a bill to level out insurer payments and provide greater revenue for small hospitals, organizers of the ballot initiative drive say they will press on by placing the issue before state voters.

"We're optimistic that something can be done on this important issue," said Tim Foley, vice president of Service Employees International Union 1199 United Healthcare Workers East, which represents some 52,000 mostly nonmedical hospital workers in the state.

The initiative and bill both would set a floor and a ceiling on negotiated prices for medical care entered into between private insurers and health care providers. Downing's bill, for instance, would limit negotiated health care contract prices to a set percentage range above and below the median paid to similar providers.

Supporters contend that overall health care costs would be reduced by millions statewide and insurance payments to the largest hospitals would drop while those to smaller hospitals would rise.

Meanwhile, opposition to the bill from the Massachusetts Hospital Association remains strong, MHA Executive Vice President and General Counsel Tim Gens said this week.

"Our fundamental objections remain the same," he said, adding that the dollar figures pertaining to increased revenue for smaller hospitals and other aspects of the proposal "really don't make a great deal of sense."

Gov. Charlie Baker also has expressed opposition to the initiative, saying he would favor efforts to improve transparency in the system and opposes state regulation.

The union-led Campaign for Fair Care submitted thousands of voter signatures earlier this month toward forcing a ballot question on the proposal, and the bid was among seven initiatives that cleared the 64,750 signature minimum, Secretary of State William Galvin's office reported on Dec. 19. The petition had 68,755 certified voter names.

The next step, Foley said, is to monitor progress on Downing's Senate bill S. 574, An Act Relative to Equitable Health Care Pricing. If the bill is passed, the petitioners have the option of halting the last step in the ballot initiative process by not submitting the final required 10,792 voter signatures to place the question on the ballot.

A spokesman for Downing said last week that the bill remains in committee following a hearing in September before the Committee on Health Care Financing.

Both union officials and Downing have stressed that the discrepancies in the amounts paid by health care insurers for the same medical procedures — based on the contract negotiating power of larger institutions like Partners HealthCare and South Shore Medical Center — has effectively left smaller hospitals in danger of falling into debt and having to close.

In addition to greater cost equity, the issue of protecting local jobs at community hospitals that are major employers in their cities, is paramount, according to the union. When NARH closed about 500 employees lost their jobs, although some have since been hired by Berkshire Health Systems, which set up a satellite facility at the former North Adams hospital.

Foley said reports concerning health care costs over the past year issued by the state Health Policy Commission and the attorney general's office "reinforce what we have been saying" about widening discrepancies in revenue between the largest institutions and community hospitals.

Downing has said revenue disparities began to widen after the state deregulated the health insurance industry in the 1990s, and the situation has become acute in recent years for hospitals with less bargaining power to negotiate more favorable contracts. He said he became interested in proposals for leveling the playing field on payments and supporting community hospitals when NARH entered bankruptcy in 2011.

He said the larger institutions "haven't done anything wrong, but the framework we have is out of whack."

In Berkshire County, the legislation and ballot proposal would be revenue neutral concerning Berkshire Medical Center and would provide a moderate boost in revenue for Fairview Hospital in Great Barrington, according to estimates on the Campaign for Fair Care website, at faircaremass.org.

Gens argues that the MHA board is opposed in large part because members believe the proposals would prove unworkable. He said proponents of the initiative have been quoting "numbers that are not accurate" in terms of how much would be saved or redistributed, and that MHA officials believe "there will be an increase in total expenses over time."

The issue also is too many-faceted to be decided in a ballot question, Gens said. "There are a lot of implications, he said. "It is a complex idea."

Supporters of the initiative say it could reduce overall health care spending by an estimated $267 million and lower payments to higher-cost providers by $463 million, while pumping $196 million into community hospitals and those serving a large number of patients on Medicaid and Medicare.

Partners HealthCare was estimated by initiative backers to see a $444 million reduction in payments from insurers because of the proposed price ceiling, but union officials argue that the state's largest health care institution has realized billions in revenue in recent years and could easily weather the change, while community hospitals have seen their margins shrink or disappear.

Under Downing's legislation, the state Health Policy Commission would review contracts for compliance to the regulation.

According the Secretary of State's website, leaders of the ballot initiative drive would have to submit an additional 10,792 voter signatures in June or early July to place the question on the November ballot. Foley said that if supporters are satisfied that the Legislature has addressed the issue adequately by that time, the final batch of signatures could be withheld, halting the process.

The proposed change would not affect Medicare, Medicaid, Veterans Administration or other government insurance systems, only private health insurance contracts with health care providers.

Contact Jim Therrien at 413-496-6247.


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