The next Massachusetts health reform

On Friday, Massachusetts House Speaker Robert DeLeo and Representative Steve Walsh introduced the Health Care Quality Improvement and Cost Reduction Act of 2012. More industry-friendly legislation is being offered in the state Senate today. Rachel Zimmerman and Carey Goldberg posted a short summary of the House bill.

1. Oversight: A new, quasi-governmental agency called the Division of Health Care Cost and Quality would oversee the transition to the new payment and delivery system with a board including consumer, government and industry representatives.

2. Cost-Cutting: To curb the increase in medical spending, the plan establishes a cap for health-care spending linked to the local economy, the Gross State Product, minus one-half a percent. [See my note A below.]

3. Leveling The Field: The state could impose a 10 percent “luxury tax” on hospitals that charge more than 20 percent of the state median price for a given service without being able to justify that higher price. […] Hospitals would pay this penalty into a “distressed hospital” fund for institutions that serve a high proportion of poor and vulnerable patients.

4. Accountable Care Organizations would take on greater prominence, though the bill stresses that joining an ACO would be voluntary for patients and providers. The bill defines the size of an ACO as bigger than 15,000 people and no larger than 400,000. Patients would have the right to appeal decisions made by their ACO doctors, and have the right to a second opinion.

5. Shifting Payments: The state’s medical establishment would continue its shift toward global payments and away from fee-for-service systems. The measure would “transition the industry to adopt alternative payment methodologies such as global payments and bundled payments for acute and chronic conditions.”

6. Technology: Electronic health records would be required for all providers by 2017. [See my note B below.]

7. Greater transparency would be attained through detailed pricing available to consumers on the Web, as well as greater disclosure of out-of-pocket costs to patients up front.

8. Streamlining Care: The measure stresses greater coordination of care through primary care, and the establishment of “patient-centered medical homes” so that patients could have a single point of coordination for all types of care.

9. MedMal: New rules on medical malpractice would create a 180-day cooling off period while both side try to negotiate a settlement. Also, the measure would allow providers to freely offer an apology to a patient.

10. Tiering: Under a provision called “smart tiering” patients might pay more for more expensive services.  [See my note C below.]

11. Upping The Rates: The bill would make several changes to Medicaid, including increasing MassHealth rates paid to providers.

12. Training: Funding for workforce training and development are included in the measure, and a provision would forgive loans to primary care doctors who practice in rural or underserved areas.

Notes: (A) The spending growth target is per capital health spending growth no higher than potential GSP per capita less a half percentage point. That is, the target is adjusted for both population level (per capita) and economic conditions (potential). (B) The law requires more than electronic health records. It requires interoperable (across health systems) electronic health records. (C) Tiering would be within service, not just hospital. In other words, the same hospital could be in the most preferred tier (lowest copay) for cardiovascular care but in a less preferred tier (higher copay) for maternity services, for example.

The bill also includes malpractice reform that would create “a 180-day cooling off period during which injured patients will provide a notice of intent to sue while both sides exchange information and begin to negotiate a settlement.”

Zimmerman and Goldberg have summarized the Senate version too. I’ll let you click over to read it.


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