For Immediate Release - January 20, 2011

Patrick-Murray Administration Secures Additional $157 Million in Federal Funds for Health Programs

Massachusetts receives authority to make supplemental payments to hospitals

BOSTON - The Patrick-Murray Administration today announced that it has secured approval from the federal government to claim approximately $157 million in new federal revenue and make $230 million in supplemental payments to hospitals to help them transition to new payment methodologies that will focus on outcomes and quality rather than the quantity of services delivered. The agreement announced today allows the Commonwealth to claim federal reimbursement on state-funded health care programs that would otherwise not have been eligible for federal matching funds.

"Safety net hospitals are a vital part of the success of Massachusetts health care reform and are part of the reason why we are able to provide health care to over 98% of our residents. We appreciate the federal government's continued partnership to make this possible. We thank President Obama, CMS, Senator Kerry and Congressman Markey for their significant roles in that partnership," said Governor Patrick.

The new agreement updates a standing "waiver agreement" between the Commonwealth and the federal Centers for Medicare and Medicaid Services (CMS), which grants federal approval and funding for the state's ongoing health care reform programs. The Patrick-Murray Administration has remained committed to state health programs, despite a decline in state tax revenue as a result of the national economic collapse.

"This waiver amendment is an important step towards our commitment to reforming the health care payment system in Massachusetts. This agreement allows us to help support safety net hospitals' transition from a fee-for-service payment system that emphasizes volume to alternative payments that emphasize coordinated, efficient, high quality care delivered in integrated systems," said Secretary of Health and Human Services Dr. JudyAnn Bigby.

Senator John Kerry added, "Five years ago, Massachusetts set the pace for the nation by enacting landmark health insurance reform. As a result, today almost everyone in our state has access to health care. The Medicaid waiver has been vital to our success. The word 'lifeline' is an understatement for what this agreement means to our health care safety net. Without it, we came dangerously close to losing quality, affordable healthcare for our most vulnerable citizens. This was do or die. Administrator Berwick knows the Massachusetts experiment inside and out, he listened to me and to the Governor, and he responded to our call for help. Massachusetts is enormously grateful, and we will continue to lead the nation."

"This federal funding is a huge win for Massachusetts hospitals, doctors, and patients. I was proud to team up with Governor Patrick, Senator Kerry and our congressional delegation to help our vital safety net hospitals survive this fiscal crisis and ensure they can continue to provide high-quality care for Bay State residents," said Congressman Edward J. Markey (D-07), who advocated for the additional funding.

The waiver agreement announced today gives the state the authority to make $230 million in payments to six hospitals that serve a disproportionate share of Medicaid patients and a disproportionately low percentage of privately insured patients. These hospitals are: Boston Medical Center, Brockton Hospital, Caritas Carney Hospital, Holyoke Medical Center, Lawrence General Hospital, and Mercy Medical Center. The Commonwealth's only public hospital, Cambridge Health Alliance, also serves this population but received additional funding through an agreement approved by CMS on September 30, 2010.

The hospital payments will be made in two installments and will help each hospital implement measures necessary to accommodate next steps in payment reform. The funding will be distributed based on each institution's percentage of state-supported care, relative to their percentage of privately insured patients.

Kate Walsh, President and CEO of Boston Medical Center, said, "The Medicaid waiver amendment is critical to enabling Boston Medical Center and its community health center network to fund the care provided to over 150,000 of the Commonwealth's neediest and most vulnerable residents. We are extremely grateful to Senator Kerry and to Governor Patrick and his Administration for their assistance in securing this much needed funding."

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