State Budget and a Warning About Ratios

Senate Budget Debate Begins; MHA Suggests Two Amendments

Debate on the Massachusetts Senate’s budget proposal begins tomorrow and MHA has two priority amendments among the nearly 1,200 that were filed.

One amendment, filed by Sen. Jim Welch (D-West Springfield), seeks to reinstate payment adjustments to the actual MassHealth reimbursement rates for Disproportionate Share Hospitals (DSH).
One amendment, filed by Sen. Jim Welch (D-West Springfield), seeks to reinstate payment adjustments to the actual MassHealth reimbursement rates for Disproportionate Share Hospitals (DSH). For many years, MassHealth provided an enhanced reimbursement rate to DSH as the legislature directed in various state budgets. Recently, MassHealth has instead used a supplemental payment that is paid only in the subsequent fiscal year and has been susceptible to mid-year state budget cuts. This amendment will return the DSH adjustment to the actual reimbursement rates, providing greater predictability and reliability so that hospitals can factor the adjustment into current operations. The amendment additionally provides $5 million to the DSH to support mental health and substance use disorder treatment provided to MassHealth patients, especially young patients.

MHA’s other priority amendment, filed by Sen. Michael Moore (D-Millbury), would put in place protections to allow providers to freely negotiate with Medicaid Managed Care Organizations (MCOs) rather than have the state cap the MCOs’ reimbursement rates. The ability of hospitals to negotiate with MCOs is critical to ensure the added value of a hospital is recognized in the care management provided to plan enrollees. The ability to negotiate is also essential in minimizing the likelihood that hospitals will be taken advantage of financially by non-network MCOs.

Ratios: Collapse of Non-Hospital Healthcare Sector

The president of an assisted living facility in Milford last week offered an “Economics 101” lesson on the nurse staffing ratio ballot question; he said if the ballot passes and the state’s hospitals instantly need 5,900 additional RNs to fulfill the ballot’s requirements, then RNs will flock to hospitals from long-term care, assisted living, and adult day care, thereby exacerbating a “horrendous” workforce shortage.

Blaire House of Milford President Frank Romano made the comments at a legislative breakfast at his facility last Tuesday. It was reported in the Milford Daily News.

Romano said federal immigration policies have reduced the pipeline of foreign healthcare workers coming to the U.S.  “The [current] labor shortage is just horrendous,” he said, adding that the proposed mandated ratio ballot question scheduled for November would result in 5,900 nurses moving away from non-hospital healthcare.

The economic reasons behind the shift of RNs to hospitals is clear: hospitals that fail to meet the rigid ratios could face fines of $25,000 per day.  Hospitals will then compete aggressively against each other to hire nurses from wherever they can – including out of state – and will be forced to poach RNs from other sites, such as assisted living facilities.  Some RN wages will spike. But because resources are finite, hospitals will close services or reduce beds. In any event, hospital and healthcare costs will skyrocket, and as RNs pursue higher hospital salaries, non-hospital RN jobs will go unfilled.

An independent study of mandated nurse staffing ratios found that the proposed ballot question will conservatively cost the state’s healthcare system $1.31 billion in the first year, and $1 billion annually thereafter (including costs to the state).  The study specifically cited the nurse shortage as an area of great concern, stating:

“The healthcare industry already faces significant nursing shortages, with a current vacancy rate of roughly 5.3%, or at least 1,200 RNs. Data indicate that to comply with the proposed MNSR [Mandatory Nurse Staffing Ratios], hospitals will need to hire more than 4,500 RNs for compliance alone, while also filling all existing vacancies. This means that in just two months, Massachusetts’ will need to supply 5,911 new RNs across the state’s healthcare system to both relieve the current nursing shortage and meet the MNSR. This would occur during a time of record unemployment and an environment that has already seen wage inflation for RNs of about 2% per year since 2013, bolstering the pay of RNs which already earn the third highest average wage of any state.” 

CHIA’s Transparency Site for Consumers Goes Live

The Center for Health Information and Analysis (CHIA) has launched CompareCare – the healthcare cost transparency website that was mandated by Chapter 224.

The site allows a consumer to enter in a procedure on the website (say, MRI of the arm) and then see what various providers in a geographic area charge for that procedure.  As soon as they log in, consumers are warned that the prices cited are from 2015 and that the best way to find out what they will ultimately pay for their care is to check with the consumer’s health insurance company.  About 300 procedures are covered on the site.

“CHIA’s leaders have been incredibly accessible as they have worked on the website project, and they’ve listened to our members’ concerns that the website information must be user-friendly and clear about any limitations it may have in terms of being reflective of actual costs,” said MHA President & CO Steve Walsh. “We’re optimistic that the new website will include helpful explanations about the reliability, value and usefulness of the presented data.”

MGH Looks North for Expansion

Massachusetts General Hospital and two New-Hampshire-based entities – Exeter Health Resources and Wentworth-Douglass Hospital – have signed a letter of intent to explore development of a regional non-profit corporation that will serve as the parent to Exeter and Wentworth-Douglass, and that will be a subsidiary of Mass General.  The due diligence and regulatory review process is expected to take 15 to 18 months. 

Exeter Health Resources consists of Exeter Hospital (100 beds), Core Physicians, and Rockingham Visiting Nurse Association & Hospice. The 178-bed Wentworth-Douglass Hospital of Dover, N.H. joined Mass General (999 beds) in 2017. Wentworth-Douglass also consists of several urgent care and walk-in facilities, multiple testing centers, Wentworth Health Partners (primary and specialty providers located at 30-plus practices), and the Wentworth-Douglass Foundation.

All three hospitals have received Magnet designation from the American Nurses Credentialing Center.


Tufts Medical Center, part of the Wellforce system, has made the following changes. Former  Tufts Medical Center President & CEO Michael Wagner, M.D., is now Chief Physician Executive of Wellforce.  The Co-Interim Presidents and CEOs of Tufts are Terry Hudson-Jinks, R.N., and Deeb Salem, M.D.  Tufts’ Interim CNO (formerly Hudson-Jinks) is Justin Precourt, R.N.  The Interim Physician-in-Chief (formerly Salem) is Karen Freund, M.D.

Pre-Annual Meeting Conferences

Wednesday, June 6; 12 to 3 p.m.
DoubleTree by Hilton Boston North Shore Danvers

This year, MHA is filling up every moment of its Annual Meeting with timely and informative education programs.  Pick from one of two “pre-meeting” conferences on Wednesday:

Track One is “2018: Healthcare's Emerging Trends, Innovations and Adaptations,” delivered by Apurv Gupta, M.D., who has worked as a CMO in Massachusetts hospitals. He will deliver a broad overview of national and local healthcare trends, including reform, industry consolidation, and the evolving role of hospitals within the continuum of care.  Track Two is entitled “Successes in Medicaid Delivery & Population Health Transformation: A Case Study of Staten Island and How The Results Can Work Elsewhere,” by Raj Lakhanpal, CEO of Spectramedix. This program will present a case study that illustrates how the Staten Island Performing Provider System, one of the 25 such systems in New York, is achieving its Delivery System Reform Incentive Payment (DSRIP) project goals, and what similar healthcare organizations in Massachusetts and other states – including ACOs, MCOs, and other DSRIP and Medicaid Delivery Reform programs – can learn from it.

Visit the MHA Annual Meeting education page here to learn more.

John LoDico, Editor