Worcester Business Journal

10 Worcester Business Journal | February 20, 2017 | wbjournal.com goes deeper than raising revenue on the backs of Bay State employers. After securing a five-year, $52.5-billion Medicaid waiver deal late last year under the Obama Administration, giv- ing the state more control and flexibili- ty in managing Medicaid dollars, Baker began pursuing important struc- tural changes to curb cost growth for MassHealth as well as the commercial health insurance market. Those include cost control measures such as caps on price growth for cer- tain healthcare providers, a five-year moratorium on new health insurance mandates, and administrative changes and restructuring how MassHealth is managed to reduce fraud and waste in the system. Local pilots On that front, local providers are in the midst of finalizing proposals to par- ticipate in a pilot Accountable Care Organization (ACO) program under the state Medicaid waiver deal, which would allow providers to contract with the state to manage the care of Medicaid patients under risk-based contracts. Plans must be in place by January and proposals were due this month. Patrick Muldoon, CEO of UMass Memorial Medical Center in Worcester, said the Medicaid waiver is believed to be on solid ground despite potential changes to federal health insurance policy, so providers are rea- sonably assured that those contracts can move forward. Muldoon said forming ACOs for MassHealth patients will align differ- ent types of providers – from acute care hospitals to community-based practices and specialty providers – to reduce duplication of services, which drives up costs. Muldoon said Medicaid patients tend to be costlier to care for than the commercially insured population, so the potential for savings is significant. "What it will do is it will coordinate T he future of the American healthcare system may be in limbo, but in Massachusetts, political leaders are facing a stark certainty: The state Medicaid budget is unsustainable and reform is imperative. With health insurance for the state's low-income and disabled populations accounting for 40 percent of the fiscal 2017 state budget, Gov. Charlie Baker has taken on the formidable task of Medicaid reform. In January, Baker announced a mul- tipronged approach to curbing MassHealth costs. An insurance indus- try veteran who has had a hand in Massachusetts healthcare policy on the public and private side for decades, Baker is as good a person as any to lead the charge, but he won't be without his critics. The business community is already on guard against one element of Baker's proposed reforms, an assessment on companies with 11 or more employees who have less than 80-percent partici- pation in employer-sponsored health plans. Baker's proposal, which is part of his fiscal 2018 budget, would charge those employers $2,000 per full-time employee not buying coverage under those plans. The money would be used to fund MassHealth, which in fiscal 2018 is expected to cost $16.2 billion, according to the Baker Administration. The $100,000 penalty The idea is to stem the flow of people who have, under federal healthcare reform, opted to seek coverage through the MassHealth program if they meet income guidelines. The fed- eral Affordable Care Act gave people that option and a steep spike in enroll- ment followed. But the $2,000 assessment, according to Chris Geehern, executive vice presi- dent of marketing and communication at the Associated Industries of Massachusetts (AIM), penalizes compa- nies for a problem they didn't create. AIM, the largest employer association in the state, is still analyzing the real impact of Baker's proposal, but Geehern said initial estimates show some midsize companies could face assessments in the area of $100,000. The sticking point for AIM, Geehern said, is the 80-percent takeup rate required by Baker's proposal. He noted under 2006 state healthcare reform, or RomneyCare, a similar proposal was made for companies but the required takeup rate was just 25 percent, and that reform feature was eventually dropped. Geehern said two-income families are now the norm, and that dilutes demand for employer-sponsored plans. "If you want to target employers that don't offer insurance at all and talk about an assessment, we're willing to talk about it; but the proposal will also affect a significant percentage of companies that do offer health insur- ance," Geehern said. Deeper structural changes Baker's MassHealth reform strategy Central Mass. business community bristles as Baker pursues structural changes BY EMILY MICUCCI Worcester Business Journal Staff Writer "The proposal will also affect a significant percentage of companies that do offer health insurance." - Chris Geehern, executive vice president of marketing and communication at the Associated Industries of Massachusetts The MassHealth problem Thomas Ebert, chief medical officer, Fallon Health Providers and insurers are making a greater effort to keep elderly patients at home, in order to mitigate the costs involved with moving them to an assisted-living facility. Here, a Fallon Health care coordinator meets in a home visit with a member who receives coverage through Medicare and MassHealth. P H O T O / C O U R T E S Y

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