Former Massachusetts Gov. William Weld is off to Mexico-or so he hopes-but his last public act before leaving office was a landmark event for healthcare providers and insurers trying to serve the state's poor.
Weld signed a bill to distribute the uncompensated-care load more accountably among hospitals, payers and the state while launching an effort to shrink that load.
The governor resigned soon afterward to devote full attention to winning his troubled nomination by President Clinton as ambassador to Mexico.
The ceremonial signing capped the Massachusetts Hospital Association's yearlong fight to get insurers and the state to ante up funds to a $330 million annual pool that reimburses hospitals for indigent care.
Funded originally by a surcharge on fee-for-service hospital bills, the pool over time became financed by mostly hospitals, the MHA argued, because contract negotiations with HMOs and other payers squeezed the margin available to apply to pool payments.
Under the new law, private third-party payers, including HMOs, self-insured plans and Blue Cross and Blue Shield of Massachusetts, will contribute $100 million directly to the pool based on their total payments to hospitals and ambulatory surgery centers. That trims the hospitals' share to $215 million.
In addition, the state will double its contribution to $30 million from $15 million. And as part of a Medicaid waiver approved last year, federal payments to two facilities with high expenses for indigent care-Boston Medical Center and Cambridge (Mass.) Hospital-will reduce the draw from the pool by $70 million.
But the law also dips into the pool to fund insurance-subsidy programs in the state's developing healthcare reform plan. The subsidies are intended to reduce demand for indigent-care reimbursement.
The subsidy program offers insurers and HMOs a chance to increase enrollment as a trade-off for directly funding what is hoped will become a smaller safety net over time, MHA President Ronald Hollander said.
Hospitals, meanwhile, must be aggressive in screening free-care applicants for Medicaid eligibility, which was expanded by the waiver, Hollander said. "We want to make this work, too," he said.
The new law recognizes that "(access) is a problem the marketplace cannot solve," he said. "The significant breakthrough is that all the key players are agreeing to share responsibility for the safety net."