For Immediate Release - March 01, 2010


Medicaid Waiver Amendment Requests Transitional Support for Hospitals

BOSTON - Monday, March 1, 2010 - In keeping with his commitment to provide quality health care for all residents of the Commonwealth, Governor Deval Patrick today announced that he is filing an amendment to the federal Medicaid waiver that supports the Commonwealth's health care reform initiatives, including the Commonwealth Care and MassHealth programs.

"Hospitals that serve our neediest residents need our help," said Governor Patrick. "We look forward to working with our partners in Washington, in the Legislature and at area hospitals to make this funding happen."

The requested amendment would provide:

  • authorization to make payments in fiscal years 2010 and 2011 to all acute care hospitals in the Commonwealth in order to relieve financial pressures on these providers;
  • restoration of prior levels of federal matching funds for Designated State Health Programs; and
  • accommodation to a change in generic pharmacy co-pays anticipated in FY11.

"While remaining steadfast in our joint commitment with the federal government to ensure universal access to health care, we've achieved a 97% coverage rate in the Commonwealth," said Massachusetts Secretary of Health and Human Services Dr. JudyAnn Bigby. "Our proposal offers an interim approach to paying hospitals that see a disproportionate share of state supported individuals as we weigh the best way to reform the payment system in order to drive cost containment. We must ensure access to care under new state programs."

Designated State Health Programs (DSHP) are programs outside of the Medicaid program that are not typically reimbursable by the federal government. Under the existing agreement, federal matching funds for these programs are scheduled to phase down in fiscal years 2010 and 2011. The Commonwealth is requesting that the state be able to claim matching funds on the full amount of DSHP for both FY10 and FY11.

The Governor's proposal also seeks authorization for approximately $480 million for hospitals to support care provided to low-income patients over the two fiscal years. Cambridge Health Alliance - the state's only public acute care hospital - would receive a total of $216 million for FY10 and FY11.

The amendment request also seeks $135 million for each of FY10 and FY11 for the 65 private hospitals in the Commonwealth. The majority of this amount, $115 million, would go to six hospitals that have the highest percentage of Medicaid involvement and the lowest percentage of commercial insurance involvement: Boston Medical Center, Brockton, Caritas Carney, Lawrence, Holyoke and Mercy Hospitals.

"The Patrick Administration's proposed Medicaid waiver Amendment is both critically needed and sound public policy. Hospitals are proud of their contributions to reform, but during the current national economic downturn, many communities increasing rely on financially struggling hospitals for health care services, as well as for economic support. This is particularly true for hospitals serving low-income patients. With support and flexibility from our partners in Washington, we can sustain our coverage progress, complete our payment and delivery reforms, and help all our hospitals to meet critical needs of their communities," said Lynn Nicholas, President and CEO of the Massachusetts Hospital Association.

In order to allow payments during the current fiscal year, this amendment had to be filed today. There is no timeline within which the federal government must respond.