Payment Reform After PPACA: Is Massachusetts Leading the Way Again?

Yale Journal of Health Policy, Law, and Ethics, Sep 2017

The Congressional debate leading to the enactment of federal health care reform legislation (the Patient Protection and Affordable Care Act or the "PPACA") paid close attention to the structure and results of access reform legislation enacted in Massachusetts in 2006 in Chapter 58 of the Acts of 2006 ("Chapter 58"). Many of the key access reform elements of the PPACA mirrored the most notable components of Massachusetts's reform. In crafting the PPACA, the Administration and Congress had to consider the effect on the federal deficit of the coverage expansion and other benefits provided for under the legislation. Congressional Budget Office (CBO) scoring of each proposal during the legislative process became a focus of anticipation, debate, and controversy. Other, more political concerns became predominant, especially relating to increased federal spending on health care expected to accompany access expansion and subsidies so soon after the substantial deficit spending authorized in the American Restoration and Reinvestment Act of 2009. To obtain an acceptable CBO score, the PPACA contained certain quantifiable effects on the federal budget. These included tax increases, reductions in provider payments (especially Medicare inpatient hospital payments), and a significant decrease in payments for disproportionate share hospitals. These reductions assumed, presumably, that the affected hospitals would benefit from the anticipated increase in the number of previously uninsured patients who would access their services through non-Medicare benefit coverage. In addition the PPACA provided for other changes to Medicare payment policies that were intended to reduce costs while also improving quality, such as those relating to hospital-acquired conditions and readmissions. The PPACA addressed efforts to achieve broader delivery and payment reform only in relatively limited ways, in part due to the political compromises needed to achieve enactment of such a broad and complex piece of legislation. But the PPACA also recognized that there are limits to seeking major changes in the overall structure of, and payment for, health services through using only Medicare. By contrast, the political coalition that came together in 2005 and 2006 in Massachusetts to secure enactment of Chapter 58 made what seems to have been an intentional decision primarily to address access and to forego dealing with the necessarily concomitant issue of reducing cost increases likely generated by expanded access. Supporting this political consensus was the already high level of per capita state spending on health care in Massachusetts prior to enactment of Chapter 58, and the then federal Administration's

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Payment Reform After PPACA: Is Massachusetts Leading the Way Again?

Yale Journal of Health Policy, Law, and Ethics Volume 11 Issue 1 Yale Journal of Health Policy, Law, and Ethics Article 4 2011 Payment Reform After PPACA: Is Massachusetts Leading the Way Again? Stephen M. Weiner Follow this and additional works at: https://digitalcommons.law.yale.edu/yjhple Part of the Health Law and Policy Commons, and the Legal Ethics and Professional Responsibility Commons Recommended Citation Stephen M. Weiner, Payment Reform After PPACA: Is Massachusetts Leading the Way Again?, 11 Yale J. Health Pol'y L. & Ethics (2011). Available at: https://digitalcommons.law.yale.edu/yjhple/vol11/iss1/4 This Article is brought to you for free and open access by Yale Law School Legal Scholarship Repository. It has been accepted for inclusion in Yale Journal of Health Policy, Law, and Ethics by an authorized editor of Yale Law School Legal Scholarship Repository. For more information, please contact . Weiner: Is Massachusetts Leading the Way Again? Payment Reform After PPACA: Is Massachusetts Leading the Way Again? By: Stephen M. Weiner* The Congressional debate leading to the enactment of federal health care reform legislation (the Patient Protection and Affordable Care Act or the "PPACA"') paid close attention to the structure and results of access reform legislation enacted in Massachusetts in 2006 in Chapter 58 of the Acts of 2006 ("Chapter 58").2 Many of the key access reform elements of the PPACA mirrored the most notable components of Massachusetts's reform. 3 In crafting the PPACA, the Administration and Congress had to consider the effect on the federal deficit of the coverage expansion and other benefits provided for under the legislation. Congressional Budget Office (CBO) scoring of each proposal during the legislative process became a focus of anticipation, debate, and controversy. Other, more political concerns became predominant, * Stephen M. Weiner is the chair of the national health law practice of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. He also serves as the President of The HealthWell Foundation, a national patient support foundation that provides financial support for people unable to afford cost share obligations for costly treatments. The author would like to thank his colleague, Garrett G. Gillespie, for his assistance in the preparation of this Essay. 1. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) [hereinafter PPACA]. The PPACA refers to the Senate version of the Act as adopted without change by the House. Amendments to the PPACA have been adopted by the subsequent Health Care and Education Affordability Reconciliation Act of 2010, a week after passage of the PPACA, and are included in the references throughout. 2. Act of Mar. 23, 2010, ch. 58, 2006 Mass. Acts 77 (codified as amended in scattered sections of MAsS. GEN. LAWS). 3. These include the individual mandate, Act of Mar. 23, 2010, ch. 58, sec. 12, § 2(b), 2006 Mass. Acts 94-95 (codified as amended at MASS. GEN. LAWS ch. 11I M, § 2(b) (2010)); the concept of minimum creditable coverage that should be obtained and maintained by all qualifying individuals, sec. 12 § 1, 2006 Mass. Acts at 93 (codified as amended at MASS. GEN. LAWS ch. II IM, § 1 (2010)); the formation of state-level health care exchanges (the Commonwealth Health Insurance Connector in Massachusetts) to facilitate access to "affordable" health benefit policies, § 101, 2006 Mass. Acts at 134-45 (codified as amended at MASS. GEN. LAWS ch. 176Q (2010)); insurance reform, §§ 48-100, 2006 Mass. Acts at 117-35 (codified as amended in scattered sections of MASS. GEN. LAWS) (in Massachusetts, reform of insurance coverage had already proceeded substantially so was of less overall importance in the scheme of the Massachusetts reform); and government subsidies for low-income residents through the Commonwealth Care program to facilitate their obtaining affordable coverage, § 45, 2006 Mass. Acts at 113 (codified as amended at MASS. GEN. LAWS ch. II 8H (2008)). 33 Published by Yale Law School Legal Scholarship Repository, 2011 1 Yale Journal of Health Policy, Law, and Ethics, Vol. 11 [2011], Iss. 1, Art. 4 YALE JOURNAL OF HEALTH POLICY, LAW, AND ETHICS X1: 1 (2011) especially relating to increased federal spending on health care expected to accompany access expansion and subsidies so soon after the substantial deficit spending authorized in the American Restoration and Reinvestment Act of 2009.4 To obtain an acceptable CBO score, the PPACA contained certain quantifiable effects on the federal budget. These included tax increases, 5 reductions in provider payments (especially Medicare inpatient hospital payments), 6 and a significant decrease in payments for disproportionate share hospitals. These reductions assumed, presumably, that the affected hospitals would benefit from the anticipated increase in the number of previously uninsured patients who would access their services through non-Medicare benefit coverage. In addition the PPACA provided for other changes to Medicare payment policies that were intended to reduce costs while also improving quality, such as those relating to hospital-acquired conditions8 and readmissions. 9 The PPACA addressed efforts to achieve broader delivery and payment reform only in relatively limited ways,' 0 in part due to the political compromises 4. American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115. 5. See, e.g., PPACA § 9001, 124 Stat. at 847-53, amended by Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, § 1401, 124 Stat. 1029, 1059-60 (to be codified at 26 U.S.C. § 49801) [hereinafter HCERAJ (excise tax on "Cadillac" plans); PPACA § 9015(a)(1), 124 Stat. at 870-7 1, modified by § 10906, amended by HCERA § 1402(b)(2), 124 Stat. at 1063 (to be codified at 26 U.S.C. § 3101) (additional 0.9% payroll tax); HCERA § 1402(a), 124 Stat. at 1061 (to be codified in scattered sections of 26 U.S.C.) (3.8% investment income tax); PPACA § 9008, 124 Stat. 859-62, amended by HCERA § 1404, 124 Stat. at 1064 (to be codified at 26 U.S.C. § 4001) (pharmaceutical industry fees); HCERA § 1405, 124 Stat. at 1064-65 (to be codified in scattered sections of 26 U.S.C.) (excise tax on medical devices); PPACA § 10907, 124 Stat. at 1020 (to be codified at 26 U.S.C. § 5000B and note) (indoor tanning tax, nullifying § 9017, a tax on cosmetic medical procedures); PPACA § 6301(e)(2)(A), 124 Stat. at 743-46 (to be codified at 26 U.S.C. §§ 4375-77) ($2-per-enrollee insurance industry tax); PPACA § 9010, 124 Stat. at 865-68, modified by § 10905, amended by HCERA § 1406(a)(4), 124 Stat. at 1066 (to be codified at 26 U.S.C. § 4001 note prec.) (insurance industry fees); PPACA §§ 2501-2502, 124 Stat. at 306-10 (to be codified in scattered sections of 42 U.S.C.) (increasing Medicaid reimbursement for prescription drugs). 6. PPACA § 3401, 124 Stat. at 480-88, modified by §§ 10319, 10322, amended by HCERA § 1105, 124 (...truncated)


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Stephen M Weiner. Payment Reform After PPACA: Is Massachusetts Leading the Way Again?, Yale Journal of Health Policy, Law, and Ethics, 2018, Volume 11, Issue 1,