The most fundamental change in the plan released by the Senate is how people pay for health care. The bill offers a new global payment system – one that replaces the old fee for service model with fixed allocations from insurance companies for care.
Health insurance companies in Massachusetts began introducing global payment options for some customers in 2009. The Governor also endorsed the idea in his Fiscal Year 2013 budget proposal. The bill would require all state subsidized health care insurance programs make the switch over the next several years, including Medicaid.
Dr. Lynda Young, President of the Massachusetts Medical Society, said that members of the House and Senate should be careful of how the payment plans are administered. She warned against burdensome mandates and oversight.
Dr. Young also said that the old fee-for-service model is still viable in certain areas.
Senate Health Care Finance Committee Chair Richard Moore said the initiatives in the bill would save billions in health care costs.
The Senate version of the bill would also reform malpractice laws, require health insurers to reduce costs or pay penalties, and would make $100 million investments in both electronically converting medical records and prevention and wellness programs.
In the House version of the bill, 4th Berkshire District Representative William “Smitty” Pignatelli introduced language to make changes to the way “Critical Access Hospitals” are reimbursed by the state. Only three federally designated Critical Access Hospitals are located in Massachusetts, including Fairview Hospital in Great Barrington – a major economic engine in South Berkshire County. Representative Pignatelli says that under the proposal state funded health care programs would have to follow the federal government in reimbursing Critical Access Hospitals at 101 percent of reasonable costs.
Pignatelli said that when hospitals must provide care without receiving full payment from state-funded programs, they must raise costs.
Both the House and Senate are expected to vote on their plans and submit a final version to the governor before the end of the current legislative session on July 31st.