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News You Can Use - Massachusetts New Health Care Bill

Published by IBA on 8/13/12


Gov. Patrick signed a new healthcare bill intending to rein in medical care costs by linking them to the state’s overall economic growth rate.


Last week, Gov. Patrick signed a new healthcare bill. The intent was to rein in medical care costs, by linking them to the overall economic growth rate in the state. Medical providers whose charges exceeded this could be subject to financial penalties.


Two other components of note:

1) A newly enacted law in Massachusetts will adopt the “Disclosure, Apology, and Offer” approach to help resolve malpractice cases. The healthcare cost control bill — recently passed by the Massachusetts legislature and signed by Gov. Deval Patrick on August 6 — contains specific language that facilitates an approach of “Disclosure, Apology, and Offer” (DA&O) to address medical malpractice claims. Under the DA&O model, healthcare professionals and institutions and their insurers disclose to patients and families when unanticipated adverse outcomes occur; investigate and explain what happened; establish systems to improve patient safety and prevent the recurrence of such incidents; and, where appropriate, apologize and offer fair financial compensation without the patient having to resort to legal action. The thought here is that this could potentially lower malpractice payouts, which are a contributing factor to healthcare costs…


2) Health Cost Bill Changes Fair Share Formula
The health care bill signed by Governor Patrick last week contains two significant revisions to the Fair Share Contribution provision of the 2006 Massachusetts health care reform law. The revisions, which will take effect on July 1, 2013, include:

1. The law will no longer apply to employers with fewer than 21 full-time equivalent employees (FTEs). Currently, employers of 11 or more FTEs are obligated to comply.

2. Employees who have “qualifying health insurance coverage” through other sources will no longer be included in the calculations related to their employers’ fair share contribution compliance.

One of the two “tests” for fair share contribution compliance requires that an employer have a take-up rate for group health insurance of at least 25 percent of full-time employees. In calculating the take-up rate (number of full-time enrolled divided by total full-time), the total full-time number currently must include employees who were offered health insurance but who waived participation because they have coverage through their spouse, parent, Medicare or other source.

Businesses that legitimately offer health insurance coverage to their employees will no longer be penalized for those workers already covered by other means.

It remains to be seen how these changes will be reconciled with the fair share formula contained under federal health care reform. The national Affordable Care Act requires only employers of 50 or more FTEs to comply. Employer penalties, capped at $295 per year per full-time equivalent employee in Massachusetts, are $2,000 per employee under the federal law after subtracting 30 from the total employee number.

State agencies are preparing to tackle the many reconciliation issues, some of which will require legislative action. Their decisions will affect employers, residents, and the commonwealth itself. AIM will be involved and keep you informed.