Last-minute debate over health care costs likely

Friday July 20, 2012

With the state House and Senate at loggerheads over efforts to craft legislation to "bend the curve" on rising health care costs, a debate down to the wire is in prospect before the Legislature adjourns July 31.

An effort to curb Cadillac-type insurance payments to Boston-area hospitals with strong bargaining clout seems to be falling by the wayside following intense pressure from the Massachusetts Hospital Association.

The gap in what insurers pay for the same procedure in Boston compared to the three rural hospitals in Berkshire County is a sore point, according to Rep. William "Smitty" Pignatelli, D-Lenox.

"It’s a very complex issue," said Pignatelli who described the proposed legislation as nearing the end of an 18-month odyssey. Although he voiced optimism, Pignatelli said he would be "extremely disappointed" if there’s no agreement.

"We have to get this thing done," he said. "This is one of the most important pieces of legislation that we have to complete by the end of the session. I’m predicting we’ll be there until midnight on July 31 to tie up some of these loose ends."

Pignatelli touted the House version of the proposal, which he termed a boon for Berkshire hospitals, especially Fairview in Great Barrington. "We’re going in the right direction, but there are so many moving parts," he said.

Because of its rural location, Fairview is one of only three federally designated critical access hospitals in Massa chusetts, but is compensated significantly less by insurers for procedures, even when compared to Berkshire Medical Center in Pittsfield. Both are owned by Berkshire Health Systems.

"The whole intention is to recognize the value of the critical access hospitals," said Pignatelli, since distant points, such as Sandisfield, rely on Fairview for urgent, acute care.

"The most important thing is to level the playing field on payment reform," Pignatelli said. He noted that treatment for a broken leg, as an example, triggers insurance reimbursement for a Boston hospital that’s more than double what a Berkshire facility would receive.

"Why is that?" he asked. "A broken leg is a broken leg; an appendectomy is an appendectomy. Unless there is an extenuating circumstance, why is one hospital treated differently for a reimbursement from other hospitals?"

He cited the payment gap as a major reason for the critical shortage of primary care physicians in the Berkshires.

Attorney General Martha Coakley has blamed the power of major hospitals in eastern Massachusetts as a primary contributor to rising health care costs.

The House has watered down a proposal to create a more equitable approach, while the state Senate seeks a commission to study the issue.

Originally, the House sought to impose a "luxury tax" on providers who extract high paybacks from insurers and funnel the proceeds to financially challenged hospitals. But that plan is opposed by Gov. Deval Patrick and state Senate President Therese Murray, dooming its prospects.

The hospital groups with the greatest clout, including Mass General and Brigham and Women’s in Boston, claim they are capping fees on their own.

Some hospitals have warned that what they term "excessive government interference" could jeopardize their ad vanced clinical trial programs that pioneer new approaches to life-threatening diseases.

Patrick, speaking to Eagle staffers recently, argued that costs are not soaring since spending on health care is under 1 percent of the total state budget.

Reflecting the deep divide on Beacon Hill, a recent House and Senate conference committee meeting recently broke up in discord, with lawmakers shouting at each other.

Information from the Boston Globe and the Associated Press was included in this report.


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