The Commonwealth of Massachusetts
Executive Office of Health and Human Services
One Ashburton Place Room 1109
Boston, Massachusetts 02108
DEVAL L. PATRICK 			Tel: (617) 573-1600 		Governor Fax: (617) 573-1890		 www.mass.gov/eohhs
TIMOTHY P. MURRAY Lieutenant Governor 
JUDYANN BIGBY, M.D. Secretary 
December 21, 2007 
Dennis Smith Director, Centers for Medicaid and State Operations Centers for Medicare and Medicaid Services 
U.S. Department of Health and Human Services 7500 Security Boulevard Baltimore, Maryland 21244 
Dear Mr. Smith: 
In my capacity as Secretary of the Executive Office of Health and Human Services for the Commonwealth of Massachusetts, it is my pleasure to submit to the Centers for Medicare and Medicaid Services (CMS) for approval this financing proposal for a threeyear extension of the MassHealth Section 1115 Demonstration Project, effective July 1, 2008. 
The Commonwealth's 1115 Demonstration authorizes and provides critical federal 
funding and support for several key components of the state's comprehensive health care 
reform plan, which the Commonwealth designed three years ago in partnership with 
CMS to reduce the rate of uninsurance in Massachusetts. In June 2007, with barely one 
year of data from Commonwealth Care and comprehensive reform to the state's 
uncompensated care pool (now called the Health Safety Net Trust Fund) yet to be 
finalized, the Commonwealth expressed its intent to renew the Demonstration program 
for another three years. At that time, the Commonwealth requested additional time to 
develop a sound federal budget neutrality calculation for the extension period ending 
June 30, 2011. As of December 1,2007, the Commonwealth has expanded health 
insurance coverage to nearly 300,000 individuals, and remains fully committed to 
increasing access to affordable quality care in Massachusetts until we achieve universal 
coverage. The Demonstration proposal outlines the necessary measures for the continued 
success of the Demonstration and the health care reform effort. 
Health care reform implementation in Massachusetts is still in its early stages. The next 
three years of the Demonstration will be critical to ensuring sustainable growth in 
MassHealth and Commonwealth Care enrollment and increasing transparency, value and 
quality in health care, while containing the growth in health care costs. The Patrick 
Administration is committed to these goals and the Demonstration proposal includes 
initiatives to ensure fair and efficient provider rates, using value-and cost-based 
purchasing principles; enhance access to primary and preventive care; expand chronic 
and complex care management; and increase the Commonwealth's investment in health 
information technology. These MassHealth and Commonwealth Care activities are part 
of a broader state effort, called the Healthy Massachusetts Compact, to enhance access to 
care, advance health care quality, contain health care costs, and promote individual 
wellness and healthy communities. The Healthy Massachusetts Compact is a 
collaboration among nine state agencies that purchase, regulate or monitor health care in 
Massachusetts to ensure coordinated reimbursement and coverage policies and other 
activities in these areas. As an essential component of the Commonwealth's 
comprehensive health care reform effort, this Demonstration proposal outlines the necessary steps for continued enrollment and cost containment success in MassHealth and Commonwealth Care, and reflects the Administration's commitment to building a sustainable health care system. 
Collaboration between the Commonwealth and CMS is an important and necessary element of Massachusetts' Demonstration program. States across the country are looking at Massachusetts' health care reform model to see if it fails or succeeds, and people across the Commonwealth are depending on it to provide them with access to affordable quality care. So far, the experiment is working--hundreds of thousands of people have received affordable coverage through a public-private partnership model, the Commonwealth has implemented unprecedented policies, and the Commonwealth is spending health care dollars more efficiently. 
The Commonwealth looks forward to the opportunity to work closely with CMS during this review of our financing proposal. CMS' continued support of Massachusetts' health care reform initiative through renewal of the Demonstration is critical to its success.