Massachusetts’ Uncompensated Care Pool Needs Reforms To Make System Equitable for All Hospitals

"It is imperative" that the commission tasked to study Massachusetts' Uncompensated Care Pool "preserve and strengthen the system for providing care to those in need," commission member Dr. James Mandell, CEO and president of Children's Hospital Boston, writes in a Boston Globe opinion piece. Currently, the pool is neither serving indigent residents nor the hospitals "that care for them," Mandell maintains (Mandell, Boston Globe, 5/6). Created in 1985, the $345 million pool pays for free care services provided by hospitals and community health centers. The pool is funded through a $215 million assessment on services hospitals provide to patients with private health insurance, $100 million from a surcharge on payments from insurance companies to hospitals and ambulatory surgical centers, and a $30 million contribution from the state. Residents with annual incomes up to 200% of the federal poverty level, or $17,720 for an individual, qualify for full free care, and those with incomes between 200% and 400% of poverty are eligible to have some of their medical costs covered (Massachusetts Division of Health Care Finance and Policy Web site). Although the program started as a "last ditch safety net," cost controls have changed the program into a system under which some hospitals receive better payments from the pool than they would through private insurers, because payments from the pool are based on what hospitals charge and not on the negotiated rates common under managed care (Kowalczyk/Barnard, Boston Globe, 4/17). As a result, hospitals that rely more on private insurance pay a "disproportionate share" of the pool's costs, Mandell writes. He adds that another problem is that payments from the pool "do not begin to cover the true cost" of care for the indigent. With the system now facing a "crisis," there is a chance for reform that will "create a stronger and more equitable system," Mandell says. He suggests that the commission maintain the health care safety net, reduce the amount of hospitals' "unreimbursed costs" and reform the "inequity" of the taxes providers pay into the system. Mandell advises that given the state's fiscal crisis, any changes should not "economically disadvantage the state." He concludes that reforms of the free pool would "contribute to the long-term stability of hospitals while placing the free care pool on a sounder financial footing" (Mandell, Boston Globe, 5/6).