Massachusetts Must Boost Medicaid Reimbursements to Save Hospitals, Task Force States

Increased Medicaid reimbursements and other financial assistance for "failing" Massachusetts hospitals are necessary to restore the state's "staggering" health system, members of the Massachusetts Health Care Task Force said during a Dec. 18 meeting. Gov. Paul Cellucci (R) formed the task force last year after Harvard Pilgrim Health Care's "near collapse ... exposed the financial precariousness of the state's system for financing health care," the Boston Globe reports. Pinpointing one of the "most pressing needs," the 39-member task force debated the most effective way to distribute Medicaid reimbursements to hospitals. While the group agreed that Medicaid reimbursements need to be increased, they differed on how to allocate them. Alan Sager, a Boston University School of Public Health professor and member of one of the working groups affiliated with the task force, said he favored "targeted" reimbursement, which would allot more money to "truly distressed" hospitals. An across-the-board Medicaid rate increase, Sager noted, would "primarily benefit hospitals that are doing relatively well and provide a lot of Medicaid treatment." But hospitals with more severe financial problems "need extra help" because of the "decade-long free-market experiment that has been closing many needed hospitals and weakening the finances of many of the survivors," he said. While Stuart Altman, a professor at Brandeis University and co-chair of the task force, agreed that there is a need for "some targeted funding of the most debt-ridden hospitals," he said that such funding "should be separate from an across-the-board Medicaid rate hike."

Uncompensated Care and Financial 'Collapses'
The task force also discussed another "urgent" concern: how hospitals are reimbursed for the uncompensated care that they provide to uninsured individuals. Hospitals have stated that the $215 million they absorb in uncompensated care is "unfairly high at a time of razor-thin profits." In addition, the task force recommended that the state should increase HMO oversight to prevent recurrences of events such as Harvard Pilgrim's financial problems last year. The task force's interim report is due by the end of the year. Following that report, the task force will issue a final report at the end of 2001 containing "more specific recommendations," the Globe reports (Saltus, Boston Globe, 12/19).