Massachusetts lawmakers want more money for local hospitals

BOSTON — Dozens of acute care hospitals will get payouts from a fund created to keep them competitive with larger, academic hospitals, but advocates say the money doesn’t go far enough to buoy Massachusetts community hospitals.

Last year, lawmakers and Gov. Charlie Baker set up a $45 million fund to pay acute care hospitals on a sliding scale based on their reimbursement rate from private insurers over the next five years.

Lawrence General Hospital is slated to get a $216,284 slice from the fund’s initial $5 million disbursement in the next few weeks, according to the state Department of Health and Human Services, which oversees the fund.

Anna Jaques Hospital in Newburyport will get $212,641, Steward Holy Family Hospital in Methuen will get $135,639, and North Shore Medical Center in Salem will get $52,444.

Some lawmakers say the money isn’t enough. They’re pitching a plan to boost the community hospital trust fund by charging large physician groups, such as Newton-based Atrius Health, a $20 million annual assessment. 

Their proposal, which went before a legislative panel this week, would exempt physician groups with fewer than 500 doctors or those that are affiliated with a teaching hospital. It would also exempt physician groups for which 15 percent or more of their annual charges are reimbursed by the state’s Medicaid program.

The bill’s primary sponsor, Sen. Barbara L’Italien, D-Andover, said the changes “improve care for low income and vulnerable populations by facilitating access to additional providers and increased resources for community hospitals.” 

“Right now, community hospitals serve the highest percentage of low-income, uninsured and vulnerable populations, and they struggle to operate because of limited funding and high expenses,” L’Italien said.

At least 17 lawmakers have signed unto the proposal, including Rep. Frank Moran, D-Lawrence. He said the measure would help “even the playing field.” 

“Community hospitals like Lawrence General are really struggling,” he said. “We need to support them.”

Marci Sindell, chief strategy officer and senior vice president of external affairs for Atrius Health, said in a statement that the bill “unfairly targets” her organization, which serves about 725,000 patients at walk-in clinics and physician offices throughout the state. 

“While we support the goal of supporting community hospitals, we do not believe that Atrius Health can or should be responsible for providing additional funds,” she said.

The state’s largest healthcare union, 1199 SEIU United Healthcare Workers East, backs L’Italien’s proposal, calling it an issue of “fairness” because large teaching hospitals and insurance companies are already contributing to the state’s safety-net funds.

Hospitals are required to provide care to patients who go to emergency rooms, regardless of insurance coverage or ability to pay. Unpaid bills are covered by the Health Safety Net Trust Fund, funded by insurance companies.

The Community Hospital Reinvestment Trust Fund was a compromise between state leaders, hospitals and health care unions, which wanted to put a measure on the ballot in the November 2016 elections to regulate commercial insurance payments to hospitals. 

Under the proposed ballot initiative, smaller so-called “safety-net” community hospitals would have gotten more money but Partners Healthcare, the state’s largest hospital system, stood to lose hundreds of millions of dollars in insurance reimbursements.

Most community hospitals now struggle to stay afloat while serving large numbers of low-income patients, collecting from low-paying government insurance programs and getting below-average reimbursements from commercial insurers, advocates say.

Meanwhile, large physicians groups, walk-in clinics and even retail outlets like CVS, Walmart are siphoning away patients, they say.

“They’re cherry-picking commercial patients that they can make money on and turning away people on public payer programs like Medicaid and Medicare,” said Steve Walsh, executive director of the Massachusetts Council of Community Hospitals. “It’s blatantly unfair that they’re not paying into these funds.”

Community hospitals also chafe at the fact that large, teaching hospitals like Beth Israel Deaconess Hospital, Tufts Medical Center and Lahey Hospital & Medical Center are getting money from the reinvestment fund.

Under the current guidelines, hospitals with prices below 120 percent of the statewide median price are eligible for funding.

Ellen Murphy Meehan, a consultant for Lawrence General and other community hospitals, said the fund is helpful but does little to eliminate the vast disparities in what commercial health insurers pay different hospitals for the same procedures.

“We need a structural fix,” she said. “Or we’re going to lose some of the most important health care providers in the state.”

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhi.com.

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