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Massachusetts health officials are having trouble managing the cost of the state’s highly touted health reform plan and physicians, including the state’s EPs, may end up having to pay for it.

Last month, officials with the Commonwealth Connector, the state agency charged with overseeing the program that covers the state’s uninsured, revealed that an unanticipated sharp rise in enrollment has driven up the cost of parts of the program by as much as 50 percent.

In response, state officials said they are planning to limit health plan premium increases and are even considering reducing negotiated physician payments to help cover the additional costs. In general, the state’s practicing physicians are paid under a formula that averages between 105 percent and 110 percent of state’s current Medicaid rates.

Jon Kingsdale, director of the program, was recently quoted as saying that he would like to see cuts of between 3 percent and 5 percent in physician payments under Commonwealth Care, the most expensive component of the program, which covers the poorest of the working poor.

Kingsdale later clarified his position on the recommended rate cuts. In practice, he said, health plans use Medicaid rate increases to set their own rate hikes under Commonwealth Care. Kingsdale said he prefers to see annual hikes for the program that are at or below the annual Medicaid rate hikes.

“We would like to see health plans close the gap between the increases they give providers under [the reform legislation] and what those under Medicaid [provide] so that the two are closer to parity,” Kingsdale said. For example, if Medicaid increases payments by 5 percent, Kingsdale said, he would not like to see a 15 percent rise for Commonwealth Care.

The ultimate decision, however, would be up to the four major health plans participating in Commonwealth Care.

If that were to happen, however, practitioners’ reimbursements could in time fall to near Medicaid levels, which would put pressure on many physicians who already question Medicaid to question the Connector program too. Because of EMTALA restrictions, EPs would have no choice but to continue to see patients under the plan.

Kingsdale’s remarks on rates are also telling because to date Massachusetts has been a leader in setting a trend for future health care reform. Since 2006, several other states have implemented their own reform faced with similar demographics: a large uninsured population and a shrinking health care workforce, particularly in primary care.

Susan Beer, executive director of the Massachusetts chapter of the American College of Emergency Physicians said she had not heard of any plans to cut physician pay. Others in the state tried to play down the issue by indicating that it was too soon to tell whether the cost issue was a serious one.

“Cost is something that everyone is looking at,” said Rich Copp, a spokesman for the Massachusetts Hospital Association. Copp avoided painting a negative picture of the situation and opted instead to attribute the sudden cost increase to the effectiveness of the plan in covering the state’s 650,000 uninsured so soon.

 In the current fiscal year, which ends June 30, the cost of funding Commonwealth Care exceeded its original budget estimate by $153 million to more than $470 million, the agency said.

The increase was due mainly to an unanticipated 250,000 spike in enrollment. The state originally expected fewer than 400,000. Those numbers could go up, the state said.

Commonwealth Care is subsidized by federal monies and employer contributions. It covers working adults who earn below 300 percent of the federal poverty guidelines but don’t qualify for Medicaid or Medicare and aren’t insured by an employer-sponsored health plan.

In contrast, Commonwealth Choice, the other major component of the state’s plan, is designed for residents who earn more than 300 percent of the federal poverty guidelines. It has a much smaller enrollment and largely pays for itself. 

 
 

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