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Beacon Hill Passes Energy, Non-Compete Bills; No Agreement on Health Measure

Posted by John Regan on Aug 1, 2018 8:16:11 AM

The Massachusetts Legislature ended its 2017-2018 formal session last night by mandating increased use of clean energy, establishing limits on the use of non-compete agreements and curbing the practice of “patent trolling.”

statehousedome1Lawmakers meanwhile were unable to reach agreement on a massive health-care bill that had generated concern among employers because it leveled assessments on medical providers and insurers that would eventually be passed on to consumers. The bill also contained no reform of the MassHealth program even as employers contribute $200 million per year to close a budget gap in the health-insurance program for low-income people.

Beacon Hill lawmakers crossed the finish line early this morning after a frenetic day that saw passage of bills covering everything from economic development to opioid care.

Governor Charlie Baker now has 10 days to review all the legislation. AIM will consult with member employers on the issues before recommending that the governor sign or veto each measure.

The new energy law authorizes an additional procurement of offshore wind power, increases the renewable portfolio standard that governs the amount of clean energy utilities must purchase, and establishes an energy storage target.

The compromise calls for the renewable portfolio standard to increase by one percent until the end of 2019, then by two percent each year until the end of 2029. It would then set the state on a track of one-percent increases each year thereafter.

Associated Industries of Massachusetts had supported a measured approach that would neither harm ratepayers nor elbow out other zero-carbon generation such as hydro-electric power. AIM supports the final bill.

“H.4857 An Act to Advance Clean Energy constructively builds upon the success of last year’s omnibus energy legislation,” said Robert Rio, Senior Vice President of Government Affairs at AIM.

“By following this measured approach, Massachusetts avoids disrupting the energy sector by making significant changes to programs that are themselves in the middle of being finalized. AIM feared that course would have delayed our effectiveness in meeting our greenhouse gas reduction goals.

“The measure will continue our aggressive transition from fossil fuels to a zero-carbon future while at the same time recognizing the importance of cost on Massachusetts ratepayers.”

(Contact Rio at rrio@aimnet.org or 617.262.1180 to learn more.)

The law governing use of non-competes, included in an economic development bill, mirrors a compromise that AIM and other business groups reached two years ago with House Speaker Robert DeLeo. The measure limits non-competes to one year and gives employees the opportunity to consult a lawyer when signing a non-compete but does not require companies that compensate employees at the time they sign non-competes to pay them again during the restricted period.

“AIM has fought relentlessly for more than 11 years on behalf the vast majority of Massachusetts employers who wish to preserve the use of non-competes to protect intellectual property. The new bill accomplishes that goal and reflects the productive compromise brokered two years ago by the speaker,” said Brad MacDougall, Vice President of Government Affairs.

The economic development bill also contains a provision to limit the practice of patent trolling, in which third parties demand financial settlements for alleged infringement on patents they do not even own. AIM maintains concerns about the language of the provision because some employers may be unable to engage in legitimate protection of their intellectual property amid an avalanche of state litigation.

“The language of the bill is materially different from the compromise language previously approved by the Joint Committee on Consumer Protection and Professional Licensure,” MacDougall said.

“This is an important and legally complex issue, one that should be addressed by federal law.  However, given Congress’ failure to act, if Massachusetts is to establish a policy, we need to get right for our AIM members who are victims of patent trolls and patent holders.”

(Sign up for future updates here on non-compete and patent legislation, or contact MacDougall at bmacdougall@aimnet.org or 617-262-1180 to learn more.)

The demise of the health-care bill turned on differing approaches by the House and Senate to capitalizing community hospitals. 

House Majority Leader Ronald Mariano told the State House News Service early this morning, "We were just too far apart philosophically to a come to a resolution that fit our agenda."

The Quincy Democrat said the House was focused on trying to find a way to financially stabilize community hospitals in the short-term with assessments on insurers and large hospitals, while he said the Senate "wanted a market driven approach." "We just thought we couldn't wait," Mariano said.

Katie Holahan, Vice President of Government Affairs at AIM, said, the lack of agreement on health care reflects the enormous complexity of the issue. She said AIM and its employer-members will continue to work with the Legislature to find ways to moderate the cost that companies face in providing health coverage for employees.

“While final action was not taken on major health-care legislation, we remain gravely concerned that – without long-term reform to MassHealth and the commercial market – Massachusetts’ health-care costs will continue to increase unchecked. Until reform is achieved, no relief is in sight for employers and their workers seeking to access care at a reasonable cost,Holahan said.

The conclusion of formal sessions on July 31 of even-numbered years generally means the end of the line for controversial bills. Lawmakers will meet for the remainder of 2018 in informal sessions, when a single lawmaker may stop any measure with an objection.

(Contact Holahan at kholahan@aimnet.org or 617.262.1180 for more information.)

Topics: Massachusetts Legislature, Non-Compete Agreements, Energy, Health Care

AIM Urges State to Maintain Aggressive Health-Cost Benchmark

Posted by Katie Holahan on Mar 28, 2018 1:30:00 PM

Massachusetts should retain its 3.1 percent health-care cost growth benchmark because employers continue to struggle to provide quality health insurance coverage to their workers, AIM told a state panel today.

health_care.jpgThe state’s largest employer association told the Massachusetts Health Policy Commission that the current benchmark is necessary to moderate health-care costs that remain well above national averages. The Massachusetts Legislature established the health-cost benchmark as part of a 2012 health-care reform law.

The benchmark was 3.6 percent from 2012 until 2017, when it was lowered to 3.1 percent. AIM is recommending that the Commission retain the 3.1 percent mark for 2019.

“As we continue to track trends in health-care cost and utilization, the cost-growth benchmark has become a critical component for understanding year-over-year changes in health-care spending,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“More than 10 years after the implementation of Massachusetts’ universal health care law, employers, consumers and the public sector continue to struggle with escalating costs of comprehensive health care.”

Massachusetts doctors and hospitals have a mixed record of meeting the heath-cost benchmark. Total Health Care Expenditures (THCE) grew by 2.3 percent from 2012 to 2013; 4.2 percent from 2013 to 2014; by 4.1 percent from 2014 to 2015; and by 2.8 percent from 2015 to 2016.

Lord told the Health Policy Commission that consumer behavior plays a large role in accelerating health-care costs, especially the tendency of patients to use of high-cost settings to receive care. According to estimates provided by the Commission, reducing just some of these factors by 10 percent could save tens of millions of dollars in unnecessary health-care spending.

The hospital outpatient utilization rate in Massachusetts is 50 percent higher than the national average. The rate of emergency room visits and inpatient discharges are 10 percent and 8 percent higher than the national average, respectively. And post-acute care discharges in the Bay State are 27 percent higher than the national average.

“And as premium and utilization costs continue to grow, employers have fewer options and less flexibility to keep year-over-year increases in check, raising important concerns about their ability to offer comprehensive insurance to their employees. Without comprehensive insurance, employees have less ready access to the type of coordinated and preventative care that leads to long-term health and productivity,” Lord testified. 

“As an advocate for employers in the commonwealth, we believe that the appropriate role of government in controlling health insurance costs should be to establish reasonable health care spending targets, like the 3.1 percent benchmark, instead of proscribing regulatory solutions. The market should be given the chance to correct itself, and the commonwealth’s function should continue to be the monitoring of the industry’s progress in achieving this goal.”

The unsustainable cost increases are occurring in an industry where experts agree that at least a third of all care is unnecessary – delivered in the wrong setting; marked by a lack of coordination; provided with an inadequate emphasis on prevention; harmed by medical errors; burdened with rules and fraud; or just plain excessive.

Topics: Controlling Health Care Costs, Health Care

TechSpring - Collision Space for Health-Care Technology

Posted by Christopher Geehern on Sep 19, 2017 2:04:52 PM

Editor's note - TechSpring at Baystate Health will receive an AIM Next Century award at the association's Western Massachusetts employer celebration on September 28 from 4:30-6:30 pm at the Wood Museum of Springfield History. TechSpring, a health-care technology innovation center launched in 2014 by the regional medical services company Baystate Health, provides technology companies access to a live health system to test and validate digital-health solutions. Here is one example:

Next Frontier in Population Health from TechSpring Health on Vimeo.

 Register for the Western Massachusetts Next Century Celebration

Topics: AIM Next Century Award, Technology, Health Care

State Tightens Standard for Health Cost Growth

Posted by Katie Holahan on Mar 29, 2017 1:21:55 PM

The Massachusetts Health Policy Commission voted unanimously today to lower the state’s objective for the growth of health-care expenditures from 3.6 percent to 3.1 percent beginning in 2018.

HPC.jpgThe vote marks a significant milestone for employers and consumers struggling with the soaring cost of health insurance. AIM President and Chief Executive Officer Richard C. Lord, who represents employers on the Health Policy Commission, has been a vocal supporter of lowering the benchmark and voted in favor of the 3.1 percent level.

“Today’s vote represents a concrete, measurable step toward moderating the type of premium increases that give employers a knot in their stomachs when they look at their insurance renewals,” Lord said.

“The action will ultimately mean more than all the sound and fury over national health reform in Washington."

The spending growth benchmark, established as part of the health-cost control law of 2012, is a critical component for understanding year-over-year increases in health-care spending. AIM has always favored an aggressive goal – the organization joined with the Greater Boston Interfaith Organization in 2012 to support setting the health-care cost growth benchmark at two percentage points below the growth in the state’s economy.

The association ultimately supported the establishment of a 3.6 percent benchmark because it recognized the vital importance of creating a standard to measure cost-containment efforts.

But Massachusetts has not yet seen sufficient progress. The commonwealth has exceeded the 3.6 percent benchmark in two of the past three measurement periods. Total Health Care Expenditures (THCE) grew by 4.2 percent from 2013 to 2014, and by 4.1 percent from 2014 to 2015.

“These unsustainable cost increases are occurring in an industry where experts agree that at least a third of all care is unnecessary – delivered in the wrong setting; marked by a lack of coordination; provided with an inadequate emphasis on prevention; harmed by medical errors; burdened with rules and fraud; or just plain excessive,” Lord said.

AIM is also addressing the health cost issue by supporting new research conducted by the Health Policy Commission suggesting that Massachusetts could reduce total health-care expenditures anywhere from $279 million per year to $794 million per year, or 0.5 to 1.3 percent, by making seven improvements to the health-care system.

The improvements:

  • Shift community appropriate care to community hospitals – Reduce by 5-10 percent the number of cases treated at teaching hospitals that would be more appropriately treated at community hospitals. Savings: $43 million to $86 million.
  • Reduce hospital readmissions – Cut the 2015 hospital readmission rate from 15.8 percent (78,000 readmissions) to a range of 15 to 13 percent. Savings: $61 million to $245 million.
  • Reduce avoidable emergency room visits – More than 900,000 emergency room visits during 2015 were considered avoidable. Shift 5-10 percent of those avoidable visits to lower-cost settings. Savings: $12 million to $24 million.
  • Reduce use of institutional post-acute care – Redirect 5-21 percent of the patients who currently leave hospitals to go to institutional rehabilitation facilities into home care. Savings: $46.6 million to $186 million.
  • Provide incentives for consumers to choose high-value primary care providers.
  • Increase the use of alternative payment methods -The commonwealth wants to increase the percentage of HMO participants covered by alternative payment methods from 58.5 percent in 2015 to 80 percent this year. Savings: $23 million to $68 million.
  • Reduce the growth of prescription-drug spending – Cut the growth-rate of spending on prescriptions from 5.0 percent in 2016 to 3.6 percent to 4.3 percent. Savings: $57 million to $113 million.

Topics: Health Care, Health Care Costs, Health Insurance

Infographic: The Rising Cost of Health Care

Posted by Katie Holahan on Dec 17, 2015 1:27:03 PM

The Massachusetts Health Policy Commission this week released its 2015 Cost Trends Report examining the cost of health care and health insurance in the commonwealth. Per-person spending on health care grew at less than the 3.6 percent overall economic growth rate, though overall spending grew at 4.8 percent. The bottom line is that health care spending continues to divert precious resources from employers, families and state government.

Graphics are courtesy of the Health Policy Commission.

HealthCosts.Families.jpg

 

 

HealthCosts.Increases.jpg

Topics: Health Care Costs, Health Care, Benefits

Why is Health Care So Expensive in Massachusetts?

Posted by Christopher Geehern on Oct 28, 2015 1:50:15 PM

Editor's note - The cost of health care in Massachusetts is everyone’s problem. On average, every Massachusetts resident spends 36 percent more on health care than the national average. This comes primarily as a result of lack of effective competition in the health care marketplace and the inability of our largest providers to treat patients in the appropriate care setting.

Howard Grant, JD, MD, President and Chief Executive Officer of Lahey Health, recently gave an engaging and provocative talk on what employers, consumers and health care providers can do together to fix this growing problem.

Topics: Health Care Costs, Health Care

Governor Will Let Stand Repeal of Fair-Share Assessment on Employers

Posted by Kristen Lepore on Jul 11, 2013 2:48:00 PM

Governor Deval Patrick said today that he will let stand a budget provision repealing the Fair Share health care assessment on employers, even though the Obama Administration last week postponed a related provision of federal health reform.

Deval PatrickAssociated Industries of Massachusetts applauds the governor’s decision. Elimination of the Fair Share assessment created under the 2006 state health care reform law is part of package of changes intended to make way for the federal Affordable Care Act and reduce the administrative burden on employers who provide health insurance.

John Regan, Executive Vice President of Government Affairs at AIM, said the new implementation date for federal penalties does not diminish the value to employers and consumers of eliminating Fair Share and the Medical Security Trust Fund.

“The temporary presence or absence of health reform penalties does not drive benefit decisions for the vast majority of Massachusetts employers,” Regan said.

Included in the budget for Fiscal Year 2014 now on the governor’s desk is a provision eliminating the $295 per employee Fair Share assessment that Massachusetts employers have been paying under state health reform since 2006. The budget would also drop the requirement that employers collect and retain the Health Insurance Responsibility Disclosure (HIRD) form, and replace the current $67.20 per employee contribution to the Medical Security Trust Fund with a $50 per employee contribution to fund subsidized health care.

The measures were the product of extensive negotiations among AIM, state lawmakers and groups representing the health care industry and consumers.

The proposed changes became more complicated last week when the U.S. Department of the Treasury announced that it will postpone until 2015 the federal health reform mandate that larger employers provide health insurance for their workers or face penalties. Those penalties - $2,000 per each full-time employee after the first 30 for companies that do not provide insurance or $3,000 per full-time employee for employers who offer health insurance that is either not affordable or of minimum value– were expected to replace the Fair Share assessment.

Elimination of the Fair Share assessment has been a priority for the AIM Health Policy Committee and was proposed by Governor Patrick in January.

Topics: Health Care Reform, Health Care, Issues

Employers Embrace New Health Plans to Reduce Costs

Posted by Eileen McAnneny on Feb 10, 2011 2:54:00 PM

Massachusetts employers are migrating to new health insurance plans that limit premium increases by encouraging customers to seek quality care at reasonable rates, The Boston Globe and WBUR report today.

Health costsAIM applauds the trend. The association has for months urged employers to use tiered networks to control the spiraling cost of health insurance. AIM will make the case this spring to members that these products provide value and make both employees and providers aware of the cost of care.

The Globe article reports that hundreds of small businesses have signed up for a new tiered product offered by Blue Cross Blue Shield of Massachusetts, making it the fastest product launch in the insurer’s history. Tufts Health Plan and Harvard Pilgrim Health Plan also report significant interest in their new tiered offerings.

The trend will likely accelerate in the spring when the health cost control law signed by Governor Deval Patrick in August takes effect. The law requires Massachusetts health plans to offer at least one limited or tiered network product that is at least 12 percent less expensive than a comparable full-network offering. 

The idea behind limited networks is simple – find quality medical care at reasonable prices. That means avoiding high-cost providers for procedures that can be performed just as well in lower-cost, community settings.

In a tiered network plan, the patient’s ability to choose where to have care provided is preserved, however, he or she may have to pay more to receive care at more expensive medical facilities. In a limited network product, access to those high cost facilities is prohibited altogether.

“These innovative products that differentiate between providers give employers the opportunity to control health care expenses that have in some cases been rising as much as 20 percent to 40 percent per year,” said Richard C. Lord, President and Chief Executive Officer of AIM.

Limited and tiered networks begin to address one of the leading cost drivers in Massachusetts – the gaping disparity in rates among doctors and hospitals within commonwealth for the same service and same quality outcome. A recent report by the Massachusetts Attorney General concluded that the primary driver of health costs is the variation in rates that certain hospitals and physician groups are able to charge relative to their peers.

The growing popularity of tiered-network plans is one of several recent developments that together show considerable momentum building for controlling health care costs in Massachusetts.

Consider:

  • The chief executive of Blue Cross Blue Shield of Massachusetts is urging hospitals to adopt a new global payment system and warned that providers who hold onto traditional fee-for-service arrangements face level or reduced payments.
  • The Patrick administration is preparing to file health cost legislation that is widely expected to institute a payment system under which medical care providers are put on an annual budget and given incentives to control costs and improve care instead of being paid for individual doctor visits and procedures.
  • The governor and the business community appear to be on the same page when it comes to helping struggling cities and towns reduce their cost of providing health insurance. The administration filed a bill last week that would require all cities and towns to either join the state-run Group Insurance Commission or institute a program “of equivalent value and cost.”

Topics: Associated Industries of Massachusetts, AIM, Health Insurance, Health Care, Health Care Costs

Massachusetts Blue Cross CEO Adds Momentum to Health-Cost Control

Posted by Eileen McAnneny on Jan 24, 2011 3:59:00 PM

The push to control health costs in Massachusetts gained significant momentum over the weekend as the chief executive of Blue Cross Blue Shield of Massachusetts urged hospitals to adopt a new global payment system and warned that providers who hold onto traditional fee-for-service arrangements face level or reduced payments.

Health cost controlBlue Cross President and CEO Andrew Dreyfus, in a letter to hospitals and physician practices reported Sunday in The Boston Globe, noted that “we all know that rising costs continue to threaten the health care that is so important to our community.

“Health care costs are making businesses in Massachusetts less competitive, and limiting their ability to grow. Health care costs are squeezing municipal budgets, taking money from schools and police and fire protection, and health care costs are consuming too much of family incomes, forcing many families to make difficult sacrifices,” Dreyfus wrote.

Dreyfus’ comments came as the Patrick administration prepares to file health cost legislation that is widely expected to institute a payment system under which medical care providers are put on an annual budget and given incentives to control costs and improve care instead of being paid for individual doctor visits and procedures.

Associated Industries of Massachusetts, which has been at the forefront of efforts to resolve the insurance crisis facing employers, applauds Dreyfus’ comments as a constructive step in helping employers suffering with rate increases of up to 40 percent. Employers remain ready to work with lawmakers, doctors, hospitals and insurers to ensure that spiraling health costs do not divert an already tentative economic recovery.

We encourage members to read the full article and to leave your comments below.

Topics: Associated Industries of Massachusetts, AIM, Employers, Health Care, Health Care Costs

Massachusetts Representatives Back Move to Repeal 1099 Provision

Posted by Brian Gilmore on Jan 18, 2011 2:42:00 PM

House Republicans have initiated efforts to repeal a controversial provision of federal health care reform that will require businesses to file 1099 tax forms for every vendor that sells them more than $600 worth of goods or services. The provision is due to take effect in 2013.

The Republican leadership has made the 1099 repeal a priority and has therefore assigned the initiative the number H.R. 4. The bill has more than 245 co-sponsors - nearly all House Republicans and several Democrats, including Massachusetts Representatives Barney Frank and Niki Tsongas.

The provision will subject more than 40 million entities, including governments, nonprofits, and businesses of all sizes across the nation to onerous data collection and IRS information filing burdens on virtually all non-credit card purchases. 

AIM believes the 1099 provision would saddle employers with significant administrative and accounting expenses at a time when many firms are still struggling with a soft economy. We appreciate Representatives Frank and Tsongas for supporting the measure, and will ask other members of the Massachusetts Congressional delegation to join them. 

Topics: Associated Industries of Massachusetts, Health Care Reform, AIM, Taxes, Health Care

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