A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Too Much For One Blog Post? We Think Not

Too Much For One Blog Post? We Think Not

July 1, 2010

There’s so much health policy news today, that we’re tempted to post 6 different items. They’re all important. But rather than overwhelm, we’ll try some brief-ish summaries of a bunch of things that all exploded today. We apologize for the length, but how else can we be your source of The Ultimate Massachusetts Health Care Insider InformationTM without all this?

So click on for our take today on the budget vetoes, immigrant coverage, insurance gaming study, hospital use, employers who don't provide coverage, waiver renewal and more.

1. FY 2011 Budget Signed, Without FMAP Money
The Governor signed the FY2011 budget this afternoon (see the MassBudget instant analysis), but vetoed all of the funds dependent on the state’s possible receipt of extended FMAP funds, some $372 million. Unless the legislature overrides the vetoes in the next 31 days, and unless the Congress approves additional funding for states, cuts will occur in dozens of health line items, including $6.8 million from MassHealth services to seniors, over $29 million from the MassHealth managed care account, and almost $44 million in MassHealth fee-for-service payments. The budget also authorizes the reduction of MassHealth dental benefits, and allows MassHealth to override the provision in the 2006 health reform law that prevented other benefits from being cut. Vetoing the FMAP contingency funds also dramatically reduced public health spending, slashing funds from mental health, school health programs, and health promotion among others. Of course, if the FMAP extension is not approved, these cuts were to happen with or without any vetoes.

2. Governor Works To Preserve Bridge Coverage for Legal Immigrants; Legislature Must Affirm

Although the Governor vetoed every other program dependent on added FMAP funds, he signed the provision extending the Commonwealth Care Bridge program through August. At the same time, the Governor filed a proposal to allow the administration to continue the program if the Connector can find extra savings or extra Commonwealth Care Trust Fund or other revenue. For example, there is a possibility the state could get added federal welfare reimbursements, or that June cigarette tax revenue could come in above estimates. The Bridge program provides a reduced-benefit package to some 24,000 legal immigrants who were on Commonwealth Care until budget cuts last summer; another 13,000 or so are eligible but denied coverage due to a cap on enrollment. We’re pleased the administration still shares our goal of integrating these legal residents into full coverage, and that he’s prioritizing their coverage. We agree with how the MIRA Coalition put it: “The governor has come up with the plan and the funds; now the legislature needs to act quickly to pass the proposed bill, which will give tens of thousands of hard-working, tax paying immigrants a chance to breathe easier as we all work to craft a permanent solution to this crisis."

3. Three Disappointing Vetoes

We want to highlight three three important budget provisions vetoed by the Governor that ought to be overridden by the legislature. One authorizes the MassHealth program to provide up to 12-months eligibility to low-income children. This would be an important step in reducing the gaps in care which impacts the health of kids. By vetoing this section, the MassHealth program will continue to have kids go on and off coverage due to paperwork delays or small fluctuations in income.

The second veto of note strikes the $2.5 million provided by the Connector to maintain the community outreach and enrollment programs. These low-cost, grass-roots efforts have been vital in keeping people informed about the always-complicated health system. With the upcoming changes to the Bridge program and the advent of national reform, this work is more important than ever. We hope a way can be found for the Connector to provide the funds needed to maintain the network of on-the-ground groups that serve as the vital link between the community and state health programs.

The third veto was of funds to support DPH's "academic detailing" program. That's the very unfriendly name for the very effective program that helps doctors learn about prescription drugs from objective educators, rather than biased sales reps. It's been shown to save much more than it costs, and we hope it can be restored in the budget.

4. Report on Insurance Market Gaming – Not Much, After All
As the Globe reported today, the states’ Division of Insurance released their long-awaited report (pdf)) on short-term use of the insurance market. While there are many legitimate reasons for people to sign up for insurance for a short time, our mandate is supposed to discourage “gaming,” where someone waits until they know a medical procedure is needed and only then signs up for coverage. Insurers have complained about spikes in utilization that are a cause of premium increases for individuals and small businesses.

The Globe’s story today left out the key finding of the study: The added cost of short-term users in the market amounted to between 0.5% and 1.5%. This is not nothing, but it hardly explains the double-digit rise in premiums. The reports recommends instituting an open enrollment period for the individual market, which it says would save maybe 1.2% of costs. The Senate has already approved the idea, and the provision is also part of the Governor’s small business bill pending in the House. We have said that this could be a part of a shared responsibility solution that looked at the real cost drivers in our system – the market failures, lack of public accountability, employer gaming, and getting the ball started on a payment reform that shifts our system to patient-centered care focused on keeping us healthy.

5. Two DHCFP Reports

Our Division of Health Care Finance and Policy continues to release high quality data important for policy makers and policy mavens.
Yesterday it was the latest installment of the 50+ report (report and supporting materials, DHCFP blog post). The report, required annually under legislation authored by HCFA, details the number of people receiving subsidized health coverage through the state despite being employed by large employers, as well as the amount of money being spent to subsidize these plans in the 2009 fiscal year. Once again, Wal-Mart and Stop and Shop topped the list, with the Commonwealth itself at number 3.

The report finds that between MassHealth, Commonwealth Care and the Health Safety Net, an estimated $805.1 million in state funds was spent to extend care to over 611,000 employees and their dependents. Most of the numbers were pretty close to last years, but this piece of good news stands out: “Costs associated with Health Safety Net Employees declined by 24.2% compared to costs in state FY08 (fiscal year 2008), reflecting further success of moving previously uninsured employees and their dependents to private insurance or Commonwealth Care and MassHealth.”

The other report, out today, looks at hospital and emergency department trends from 2004 through 2008. There’s lot to digest here. DHCFP's headline:

The analysis shows that while the number of admissions to Massachusetts hospitals remained relatively stable from FY04 through FY08 (fluctuating by less than 1%), the number of ED visits in Massachusetts increased between 1.5% and 2.4% each year during the same time period, after adjusting for population changes. Most patients chose hospitals located in the region where they live, however, one-third of patients residing in the Northeast and Southeast went to Metro Boston area hospitals for inpatient care.

6. State Submits MassHealth Waiver Renewal Request

The Office of Medicaid submitted their request to the federal government (pdf) to renew for another 3 years the MassHealth 1115 waiver, which allows the state to receive federal reimbursements for MassHealth, our expanded Medicaid program, and for our health reform programs like Commonwealth Care. Since the initial waiver began in 1997, the MassHealth program has demonstrated how states can expand coverage while keeping costs under control. Of course, the health reform program approved by the federal government in the last waiver renewal became the model for national reform. The submission is a good introduction to health reform in Massachusetts, and discusses the state’s determination to continue progress, including cost containment initiatives such as payment reform.

Today’s submission is the first step of a long negotiating process that will likely stretch until June 2011. While this renewal round does not need to take many of the national reform programs into account, the next round, to take effect in 2014, will have to grapple with the challenges of meshing national reform with the Massachusetts model.
-Brian Rosman