Skip to main content

Rural Healthcare Eyes MA Reforms

 |  By John Commins  
   August 08, 2012

Massachusetts, in the vanguard of healthcare reform, is at it again.

Healthcare policy wonks are trying to gauge the effects of the sweeping 349-page healthcare reform bill that Massachusetts Governor Deval Patrick (D) signed into law on Monday.  It already appears that rural healthcare providers stand to benefit specifically in at least a couple of areas.

One provision requires the any state-run public healthcare programs including Medicaid to pay critical access hospitals in Massachusetts 101% of reasonable costs, thus matching the Medicare reimbursement under the federal critical access hospital criteria.

"It recognizes the importance of critical access hospitals and reimburses them at a rate that allows them to stay in business," says State Rep. Smitty Pignatelli, (D-Lenox) the sponsor of the provision. His western Massachusetts district includes Fairview Hospital in Great Barrington, one of three critical-access hospital in the state.

"On some quality of care services these critical access hospitals were reimbursed 70%-80% of actual costs. We wanted to bump it up to 101% of the actual cost. It is a lifeline actually because of the need for these hospitals," Pignatelli says.

"Fairview Hospital is the economic engine for the district. But because of their rural nature they were forced to get into other levels of care that they weren't being reimbursed for at all. The hospital established a dialysis unit because folks from my county were travelling up to an hour at 10 p.m. on a Sunday in the middle of winter for dialysis treatments. So these reimbursements will level the playing fields for hospitals."

The law, which supporters say could save the state nearly $200 billion over 15 years, also improves reimbursements for care provided by physician assistants and nurse practitioners. Pignatelli says that is particularly a concern for rural areas that have a hard time recruiting primary care physicians.

"Here in Western Massachusetts we have a serious lack of primary care physicians. Now we are going to be reimbursing nurse practitioners and physician assistants who hadn't been recognized before for providing quality healthcare," Pignatelli says.

"Before, a doctor's office would not be reimbursed unless the doctor did the work or they would get paid at a much lower rate than what the actual costs were. Now they will get paid for it as they should. It will reflect the quality of the care you are getting more so than who is providing the care."

"It's a validation,"  Pignatelli says, "that they are providing the same quality care as their primary care physicians and it is enhancing the opportunities in rural areas where it is very difficult to attract a primary care physicians."

The Massachusetts Hospital Association has taken a guardedly supportive view of the legislation while stressing that it is still reviewing the fine print. Anuj Goel, MHA's vice president of legal and regulatory affairs says it's hard to predict the effect on healthcare delivery in Massachusetts until the state actually interprets the provisions and implements the law.

"The only thing I do know for certain is the effective date is November 5th," Goel says. "We know what the legislative language says but we aren't sure what the state is interpreting, how they are going to apply it, or the contractual and regulatory policy."

Goel says it's difficult to assess how much higher Medicaid reimbursements might be for critical access hospitals, for example, because the existing reimbursement system "is very long and convoluted."

"The way we pay hospitals under the Medicaid program is through a bundled rate. So it varies based on case mix and a lot of other factors that go in the contracts," he says.

In addition, he says, the law creates two new statewide agencies for hospitals large and small to contend with and there is no way of knowing how another level of bureaucracy could affect administrative costs.

Critics of the new law say it's a government takeover of healthcare delivery in Massachusetts, which in 2006 was also the first and only state in the nation to mandate that every citizen have health insurance. Pignatelli says that "to a point" the critics of the law are correct. But he quickly adds that government has to do something drastic to slow runaway cost growth in healthcare. 

"Prior to 2006 nobody was without care in Massachusetts. It was a question of who was paying for it. People were using the ER as their primary care physician and taxpayers were paying for it," he says. "This is the next bold step. Massachusetts has been ahead of every other state in the country when it comes to tackling this issue."

He concedes there is no guarantee that the law will realized anything near the $200 billion in savings that supports hope for. "It's all a projection. Let's you and I talk in 15 years to see if it is true," he says. "There are so many moving parts that it is going to be hard to quantify at the end of the day. But it's a recognition that this is the next big bold step to try to deal with the affordability aspect of healthcare."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Tagged Under:


Get the latest on healthcare leadership in your inbox.