Massachusetts Hospitals Worry About National Health Reform Hit

This article/assessment is in the Massachusetts Hospital Association's "Monday Report."
The most sweeping national healthcare reform effort since the creation of Medicare is currently underway and the initial number-crunching shows that hospitals could take an enormous financial hit.

The White House proposals outlined last week include cuts to provider updates, the bulk of which come from hospitals, as well as a 75% reduction in funding for the Medicare Disproportionate Share Hospital (DSH) payments by 2019. In Massachusetts, the proposal would mean a cut of $1.1 billion to Medicare DSH payments over 10 years and $2.5 billion in 'productivity' and update cuts over the same period. President Barack Obama also has proposed a reduction in Medicaid DSH funding beginning in 2013 that will result in a 75% reduction by 2019. Massachusetts stands to lose approximately $1.48 billion dollars in Medicaid DSH funding, which could threaten the state's Commonwealth Care, Health Safety Net program, and governmental hospitals. It also would reduce funding that could be used to help address future Medicaid underpayment to hospitals.

While the reform proposal drafts from the Senate's Health, Education, Labor, and Pensions (HELP) Committee and Finance Committee appear to mirror many of the positive reforms that occurred under the Massachusetts health reform law (such as the individual and employer mandate and use of an insurance "exchange" to help people buy insurance) the proposed provider cuts have set hospital officials reeling.

"Hospitals support health system reform and coverage expansion for the uninsured, but it is neither fair or sensible to do it at the expense of undermining the healthcare delivery system through devastating cuts to provider payments," said MHA President & CEO Lynn Nicholas, FACHE. "Cutting hospital payments is not reform! Real reform and coverage expansion cannot succeed with a healthcare delivery system compromised by severe Medicare and Medicaid cuts."