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Employers Launch Effort to Reduce Unnecessary ER Use

Posted by Katie Holahan on Dec 4, 2018 9:00:00 AM

A coalition of employers led by AIM and the Massachusetts Taxpayers Foundation will formally initiate a campaign on December 11 to moderate the cost of health care by reducing avoidable use of hospital emergency departments (EDs).

EmergencyThe Massachusetts Employer Health Coalition will work with employers, employees, doctors, hospitals, and health insurers to reduce inappropriate use of emergency departments by 20 percent in two years. State officials estimate that a significant number of ED visits are potentially avoidable, a pattern that costs $300-$350 million annually for commercially insured members.

The good news is that employer coalitions in other areas of the country have already succeeded in curbing unnecessary use of emergency departments. The Massachusetts groups plan to kick off their initiative on the 11th with a breakfast at which they will hear comments from Louise Probst, Executive Director of a regional health improvement collaborative serving the state of Missouri, and the St. Louis Area Business Health Coalition, an employer coalition supporting more than 60 leading, self-insured employers.

In addition to Ms. Probst, a panel including AIM members will discuss cost savings initiatives they have implemented, as well as the challenges to reducing health-care costs for both large and small employers.

Register for the Coalition Kickoff

“The rising cost of providing health insurance to employees remains the most pressing issue facing the 4,000 employers who are members of Associated Industries of Massachusetts,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“The Massachusetts Employer Health Coalition is a great example of employers stepping up and taking action to ensure that their workers can access the right care in the right place, maximizing both health care quality and affordability.”

The objective, according to Lord, is to reduce health-care costs and provide rate relief for small businesses and patients, while optimizing resources to ensure quality care for those in need of emergency care.

Most ED use is necessary, appropriate, and in many cases life-saving. However, providers and payers broadly agree that shifting ED use for non-urgent health problems to more timely, appropriate settings will improve quality and patient experience, and lower the cost of care.

The cost of an ED visit can be five times that of care provided in a primary care or urgent care setting. Upper respiratory infections, skin rashes, allergies, and back pain are among the most common conditions for which Massachusetts patients seek care in the ED unnecessarily.

The Coalition is expected to use the December 11 event to unveil resources that employers will use to engage with their workers about the importance of seeking medical care in appropriate settings. These resources will include educational materials, along with procedures to help employers and employees identify local care options.

AIM plans to provide links to the resources for its employer members.

The Coalition plans to focus on four tactics for change:

  1. Educating Employees: Work with employers to communicate information about avoidable ED use with employees and families so they can get the best possible care in settings such as primary care practices, retail clinics, and urgent care centers.
  2. Learning from Data: Track and publicly report the rate of avoidable ED visits so employers, stakeholders, and the public may understand and tackle the scope of the issue.
  3. Collaborating Across the Health Care System: Work with labor unions, health care providers, health plans, employers, and employees to reward and encourage the appropriate use of the ED by aligning financial incentives, and bolster the availability of care in the community, especially during nights and weekends.
  4. Advocating for Policy Change: Advocate for policy changes that will advance new care delivery and payment models, such as Accountable Care Organizations (ACOs), telemedicine, and mobile integrated health, which combined, can improve access to timely care in the right setting.

Topics: Health Care Costs, Controlling Health Care Costs, Health Insurance

Health Insurance Costs Top Employer Concerns Heading into 2019

Posted by John Regan on Nov 29, 2018 8:00:00 AM

The rising cost of providing health insurance to employees remains the most pressing issue facing Massachusetts employers, a new AIM survey shows.

health_careThree-quarters of the employers who participated in the association’s biennial Issues Survey from September to November identified the cost of health care as one of their three policy priorities. Other major challenges include work-force availability (64 percent), regulatory issues (53 percent) and the new paid family and medical leave law (51 percent).

AIM conducts the survey to solicit employer opinions on its policy agenda for the upcoming two-year session of the Massachusetts Legislature.

“AIM members understand the value of providing good health insurance to their employees, but employers are telling us clearly that they need relief from the relentless cost increases generated by the health-care system,” said Katie Holahan, Vice President of Government Affairs at AIM.

“AIM looks forward to addressing the health-cost issue on multiple fronts, from working with industry partners on health-plan design to resolving the employer MassHealth assessment to leading an employer effort to reduce unnecessary use of emergency rooms.”

One hundred sixty-eight employers participated in the AIM survey. The top 10 issues were:

  1. The cost of health care – 74 percent
  2. The availability of work force – 64 percent
  3. Regulatory issues (including compliance) – 53 percent
  4. Paid family and medical leave – 50 percent
  5. State and local taxes – 42 percent
  6. Minimum wage & the cost of electricity (tie) – 28 percent
  7. Transportation & federal taxes (tie) – 21 percent
  8. Trade issues – 15 percent
  9. Education – 12 percent
  10. Housing – 2 percent

Several employers expressed concern about the cumulative burden of government-imposed expenses – including the $200 million MassHealth assessment, unemployment insurance and minimum-wage increases – on their ability to grow and create jobs.

Health-insurance costs have been a dominant worry for Massachusetts employers for decades.

The Massachusetts Center for Health Information and Analysis (CHIA) reported in September that health care-spending in the commonwealth grew 1.6 percent from 2016 to 2017, with costs totaling $61.1 billion, or about $8,900 per resident.

While 2017 was the second consecutive year that overall growth came in below the 3.6 percent benchmark set by the Health Policy Commission, small-business premiums rose on average 6.9 percent. Deductibles, co-pays, co-insurance and other out-of-pocket expenses were up 5.7 percent.

Contact John Regan at jregan@aimnet.org

Topics: Health Care Costs, Health Care, Skills Gap

Employers Face New HIRD Form Tomorrow

Posted by Katie Holahan on Oct 31, 2018 11:14:31 AM

Starting tomorrow, the Commonwealth of Massachusetts will implement a new Health Insurance Responsibility Disclosure (HIRD) form for employers.

Health.EnergyThe new form is different than the HIRD form established under the 2006 Massachusetts Health Care Reform law and later repealed in 2013. 

The purpose of the new HIRD form is to collect employer-level information about company-sponsored insurance offerings, to assist the state in identifying individuals with access to employer-sponsored insurance who may be eligible for MassHealth’s Premium Assistance Program.

MassHealth is the state's Medicaid health-insurance program for low-income residents.

This will help some employers to avoid the EMAC Supplement tax, while still ensuring comprehensive insurance coverage for employees.

  • Employers will have to complete the HIRD form once – annually, in November – detailing the health insurance benefits that they offer their employees.
  • The form will be accessible through the Department of Revenue’s MassTaxConnect online portal.
  • Employers have until November 30 to complete the form. There will be no penalty this year for employers who fail to complete the new HIRD form.

Unlike the old HIRD form, employees do not have to fill out the document. Only the employer is required to fill it out.

Here is an overview of the Premium Assistance Program and additional details for employers who are interested in the program.

Read HIRD Form FAQs

Need more information? Contact Katie Holahan at kholahan@aimnet.org.  

Topics: Health Insurance, Controlling Health Care Costs, Health Care Costs

Health-Care Costs Burden Small Employers

Posted by Jessica Bartlett on Oct 19, 2018 4:06:22 PM

Editor's Note - The following article appeared in the Boston Business Journal. It was written by reporter Jessica Bartlett and is re-posted here with permission.

health_careHealth care costs are hammering small employers, with premiums for small businesses coming in as the second highest in the country.

That's according to a report presented by the state’s health care oversight group, the Health Policy Commission, on Tuesday during the first day of the state’s annual Cost Trends Hearing. According to the data, small employers with fewer than 50 employees paid close to $8,000 for the average premium. Large employers in Massachusetts — those with more than 50 employees — paid closer to $7,000 for the average premium, the 10th highest in the U.S.

The U.S. average pegs average premiums at approximately $6,250 for both small employers and large employers.

Massachusetts premiums have gone up drastically since 2013, when the average for Massachusetts-based small and large businesses was close to $6,500. In 2013, the U.S. average for small and large employers was around $5,500.

“It’s tough to balance cost increases of 10 percent every year, and whether it’s premium increases… or increasing copays or deductibles, we don’t have the resources,” said Liora Stone, owner and president of Uxbridge-based Precision Engineering, Inc., who testified Tuesday morning as a representative of the state’s small business community.

Read the Full Article

Topics: Health Insurance, Controlling Health Care Costs, Health Care Costs

Employers Announce Initiative to Reduce Health Costs

Posted by Katie Holahan on May 30, 2018 11:30:32 AM

AIM and 19 other prominent Massachusetts business organizations today announced an initiative to save $100 million in health care costs by reducing avoidable use of hospital emergency departments (EDs).

Health.EnergyThe newly formed Massachusetts Employer-Led Coalition to Reduce Health Care Costs will work with doctors, hospitals, and health insurers to reduce inappropriate use of emergency departments by 20 percent in two years. State officials estimate that 40 percent of ED visits are avoidable, a pattern that costs $300-$350 million annually for commercially insured members alone.

Coalition leaders Richard C. Lord, President and CEO of the Associated Industries of Massachusetts (AIM), and Eileen McAnneny, President of the Massachusetts Taxpayers Foundation (MTF), say the group will help employers take a direct role in the health and health care of their employees and beneficiaries.

(Read the full statement of the Massachusetts Employer-Led Coalition to Reduce Health Care Costs here).

Health care industry organizations – including the Massachusetts Health and Hospital Association (MHA), Blue Cross Blue Shield of Massachusetts (BCBSMA), the Massachusetts Association of Health Plans (MAHP), and the Massachusetts College of Emergency Physicians (MACEP) – are committed to be strategic partners with the Coalition.

The Coalition’s goal is to shift as many avoidable ED visits as possible to high-value, lower-cost settings to relieve crowded EDs, reduce the cost of care, and improve quality. The vision is a health care system that delivers the right care, in the right place, at the right time.

“The rising cost of providing health insurance to employees remains one of the most troublesome issues facing the 4,000 employers who are members of Associated Industries of Massachusetts,” said Lord.

“AIM has always been active in the health care policy arena, advocating for changes to our delivery system that balance access to care and efficiency. Today, we are taking this collaborative step to ensure that employers and their workers can access the right care in the right place, maximizing both health care quality and affordability.”

McAnneny stated, “As an organization dedicated to the long-term economic and fiscal health of the commonwealth, the Foundation recognizes the need to address the costs of health care by taking unnecessary cost out of the system. I am proud to co-chair this newly formed coalition that will provide employers with the tools they need to educate their employees on getting appropriate care at the appropriate setting.”

McAnneny added, “Not only will this reduce health care costs and provide rate relief for small businesses and patients, it also allows us to optimize resources to ensure quality care for those in need of emergency care.”

Most ED use is necessary, appropriate, and in many cases life-saving. However, providers and payers broadly agree that shifting ED use for non-urgent health problems to more timely, appropriate settings will improve quality and patient experience, and lower the cost of care. Upper respiratory infections, skin rashes, allergies, and back pain are among the most common conditions for which Massachusetts patients seek care in the ED unnecessarily and the cost of an ED visit can be five times that of care provided in a primary care or urgent care setting.

“For several years the HPC has identified reducing avoidable ED use as a target area for health care improvement and has recommended coordinated action to address it,” said David Seltz, Executive Director of the Massachusetts Health Policy Commission. “This new coalition represents an exciting commitment by employers to work collaboratively to address one of the underlying drivers of health care costs. We are excited to be a strategic partner in this effort, consistent with the HPC’s goal of reducing health care cost growth without compromising quality or access.”

The strategic partners, MHA, BCBSMA, MAHP, and MACEP, will engage with the Coalition in a collaborative process to uncover solutions and support changes in the health care delivery system. Additionally, the Coalition intends to engage collaboratively with other important health care stakeholders, including health plans, hospitals, physicians, consumer advocates, labor unions, government agencies, and community organizations.

The Coalition will focus on four tactics for change:

  1. Educating Employees: Work with employers to communicate information about avoidable ED use with employees and families so they can get the best possible care in settings such as primary care practices, retail clinics, and urgent care centers.
  1. Learning from Data: Track and publicly report the rate of avoidable ED visits so employers, stakeholders, and the public may understand and tackle the scope of the issue.
  1. Collaborating Across the Health Care System: Work with labor unions, health care providers, health plans, employers, and employees to reward and encourage the appropriate use of the ED by aligning financial incentives, and bolster the availability of care in the community, especially during nights and weekends.
  1. Advocating for Policy Change: Advocate for policy changes that will advance new care delivery and payment models, such as Accountable Care Organizations (ACOs), telemedicine, and mobile integrated health, which combined, can improve access to timely care in the right setting.

More details on the Coalition’s framework to reduce avoidable ED use are included in the statement here.

The Coalition was built and organized throughout the beginning of 2018, and plans to kick off its public activities in September. The rest of the major initiatives are planned to begin in early 2019. If successful, this collaborative effort will provide a model for future coordinated efforts to tackle other drivers of health care costs.

“I urge employers of any size to participate in the Coalition’s initiatives,” added Lord. “These efforts are an opportunity to engage with each other by sharing our successes and difficulties in managing health care costs – while also actively educating our employees about their ability to drive down health care costs through patient choice. We want to raise the bar for all employers in Massachusetts.”

The Employer Members of the Coalition are:

Associated Industries of Massachusetts
Associated Subcontractors of Massachusetts
Boston Municipal Research Bureau
Greater Boston Chamber of Commerce
Massachusetts Bankers Association
Massachusetts Business Roundtable
Massachusetts Competitive Partnership
Massachusetts Food Association
Massachusetts High Technology Council
Massachusetts Package Stores Association
Massachusetts Restaurant Association
Massachusetts Society of CPAs
Massachusetts Taxpayers Foundation
NAIOP Massachusetts
National Federation of Independent Business
North Shore Chamber of Commerce
Retailers Association of Massachusetts
South Shore Chamber of Commerce
Springfield Regional Chamber of Commerce
Worcester Regional Chamber of Commerce 

The Strategic Partners are:

Blue Cross Blue Shield of Massachusetts
Massachusetts Association of Health Plans
Massachusetts College of Emergency Physicians
Massachusetts Health and Hospital Association
Massachusetts Health Policy Commission

Topics: Health Care Costs, Controlling Health Care Costs, Health Insurance

AIM to Senate - Control Health Costs, Reform MassHealth

Posted by Katie Holahan on Nov 8, 2017 11:50:22 AM

Editor's note - The following are excerpts of a letter that AIM sent to Senate President Stan Rosenberg and members of the Senate as they began debate on a health-care reform measure. The Senate passed its health reform bill last week.

Dear Mr. President and Members of the Senate:

After eleven years of universal health insurance, Massachusetts has made great strides to ensure our residents have access to some of the best health care in the nation and the world. Thus far, we have failed to make comparable progress in containing the cost of both health-care services and insurance for employers and their work forces.

MedicalRecordSmall.jpgMassachusetts residents are assured of access to high quality health care, without the assurance that they can afford it. Our complex, confusing health-care system leaves both consumers and employers at a disadvantage when it should empower them to advocate for their long-term health and productivity.

According to the most recent data available from the Centers for Medicare and Medicaid Services (CMMS), Massachusetts was the second highest-spending state for health care in 2014 shelling out 30 percent more than the national average. Personal health-care spending in Massachusetts, per capita, has increased more than 12 percent in five years – from $9,417 in 2009 to $10,559 in 2014.

Cost growth like this is unsustainable and has increased unabated in the face of attempts by both employers and the commonwealth to contain it.

Employers, especially smaller employers, have almost nothing to show in the way of cost savings and efficiencies five years after Massachusetts’ major push toward health-care cost containment. These cost increases are occurring in an industry in which experts agree that at least one-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.

We are pleased by the Senate’s focus on difficult and expensive issues like Massachusetts’ high re-admission rates, to encourage more efficient care focus on keeping consumers healthy and out of care settings. We also support the Senate’s efforts to include provider costs in the commonwealth’s efforts to track and contain year-over-year spending increases.

We would like to express our support for Amendment #38, filed by Senator Donaghue, and Amendment #67, filed by Senator deMacedo, both of which return assessments on carriers and providers to rate payers in the form of premium reductions. The most meaningful immediate health-care reform for employers and workers is a reduction in their monthly premiums.

With that in mind, we would urge careful consideration of any new policies, with particular focus on potential financial implications. A number of amendments have been filed that expand the mandated benefits required for coverage in Massachusetts. Although many health-care services are worthy, before acting to expand benefits we must understand the complete financial effects of any such changes, particularly since the Affordable Care Act requires that states pay for any mandated benefits enacted after December 31, 2011 in excess of the federally required essential health benefits.1

AIM would oppose the implementation of any new mandated benefits, without the completion of a fiscal analysis by the Center for Health Information and Analysis. The following amendments contain some form of expanded mandated benefit:

LettertoSenate.jpg

We should, instead be further supporting innovative products and practices that lower costs and encourage healthy habits and practices. We would like to express our support for Amendments #51 and 101, filed by Senators Moore and Timilty, respectively, to reinstate the Wellness Tax Credit for small employers.

AIM also supports Senator Moore’s Amendment #45, which would remove confusion about the definition of telemedicine and would allow licensed providers to prescribe certain medicines. We are supportive of facilitating market-based solutions that could help employers innovate and bring down costs.

However, in a state facing an alarming deficit in its Medicaid program, employers are now shouldering the escalating costs of the public healthcare system. For the next two years, employers statewide will provide at least $200M annually in funding for MassHealth. This is in addition to the cost and administrative burden of providing commercial health insurance to their workers.

Most importantly, employers are tasked with closing a funding deficit absent any of the long-term structural reforms needed to solve the underlying financial problems with the program. Over the past eleven years, employers have implemented wellness programs, purchased innovative insurance products, embarked on employee educational programs – all with the goal of providing higher quality insurance that keeps their employees healthier and costs lower.

The same cannot be said of the public health insurance program. We oppose any amendments that expand the current MassHealth program, including Amendments #2, 93, and 153. Regardless of enrollment rates, action must be taken to improve the efficiency and cost-effectiveness of this currently unsustainable program. The result will not be simply cost reductions, but higher quality of care for enrollees in the long term.

Thus, we express our support for Amendments #74 and #122, filed by Senator Tarr, which not only eliminate the buy-in option for MassHealth, but also provide a framework for efficiently determining eligibility so those who truly need it can access much-needed health-care services.

We would like to voice our strong support of Amendment #57, filed by Senator deMacedo, which would eliminate the so-called Name and Shame list.

The Affordable Care Act (ACA) reversed existing Massachusetts law and now allows income-eligible employees to decline employer coverage and seek insurance through MassHealth. That change created a migration of newly eligible individuals to MassHealth, substantially increasing the Commonwealth’s financial burden. The ACA made public health insurance an economically rational choice for eligible residents in a state known for its expensive health-care system, and employers should not be publicly shamed for a choice they cannot control.

As MassHealth enrollment grows, the commonwealth experiences the reality that employers have faced for years: the high cost of health-care coverage in this state threatens the underpinnings of our economy. Policymakers who have concentrated almost exclusively on access and coverage now face a renewed imperative to lower the cost of health insurance for everyone in Massachusetts.

We are active participants in providing health insurance to the majority of residents in the commonwealth, a role that we have played for the past 10 years and more. It is an integral part of the Massachusetts economy and we look forward to working with you to bring the same level of innovation and sustainability to health care coverage, traits which Massachusetts is known for worldwide.

Topics: Health Care Costs, Health Insurance

Governor to Sign Employer Assessment

Posted by Katie Holahan on Aug 2, 2017 7:43:35 AM

Governor Charlie Baker said last night that he intends to sign legislation imposing a $200 million MassHealth assessment on employers. The governor also reaffirmed his commiment to work with lawmakers to make long-term structural reforms to the state’s health-insurance program for low-income people.

“While this is certainly not the outcome we hoped for, we recognize that the governor’s decision is carefully considered and designed to achieve the ultimate, long-term goal of substantive MassHealth reform,” said Rick Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“We are encouraged by the repeated statements of commitment by both Senate and House leadership that reform of the MassHealth system is as high a priority for them as it is for the employer community.

“In 2006, employers joined with doctors, hospitals, patient advocates, and lawmakers to forge a health-reform law that required everyone to share the responsibility for improving access to health care. Right now, employers are faced with a policy levying a new tax on businesses without any corresponding cost-efficiencies implemented in the public health-care system. We anticipate a continued dialogue as we work to affect meaningful, sustainable, long-term MassHealth reform.

“We are willing – in fact, we must – join together once again with a renewed focus to ensure the commitments of the employer community are not made in vain,” Lord said.

Topics: Employer Health Assessment, Health Care Costs, Massachusetts state budget

Senate Creates Roadmap for Debate on Employer Assessment

Posted by Katie Holahan on May 16, 2017 3:36:24 PM

The Massachusetts Senate today sought to define the process through which the Baker Administration might require employers pay for a shortfall in the MassHealth program.

statehousedome.jpgThe proposed Fiscal Year 2018 budget released by the Senate Ways & Means Committee gives the administration a choice of increasing the Employer Medical Assistance Contribution (EMAC) or creating a stand-alone quarterly assessment on employers.

The Senate envisions raising $180 million from such assessments versus the $300 million contained in the governor’s budget. Senators would also limit the life of those assessments to two years.

The approach of creating a roadmap for the administration is similar to the one adopted earlier by the House of Representatives, through the specifics of each proposal differ.

“The Senate Ways & Means Committee took a step in the right direction today by outlining a thoughtful and transparent approach to closing the Medicaid budget deficit. Employers are particularly encouraged that the committee’s budget proposal would raise $180 million from employers instead of $300 million; would provide the Baker Administration with the flexibility to find a solution; and would sunset any employer assessments,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“The Senate plan again reminds us that the only long-term solution to the Medicaid funding issue is to redouble efforts to control the cost of providing health insurance to our low-income neighbors. Without such an effort, the Medicaid budget gap will continue to grow and divert precious resources from other priorities such as education and infrastructure.”

Lord also urged the Senate to add a provision that would require the Baker Administration to seek a federal waiver allowing Massachusetts to prevent people who receive an offer of health insurance from their employers from purchasing insurance through MassHealth.

The Senate proposal would require Secretary of Administration and Finance Kristen Lepore to file a letter with the Legislature by August 1 indicating whether she will choose the EMAC or assessment option. Regulations must be published by November 1 and take effect January 1 of next year.

Secretary Lepore could either increase the employer assessment for EMAC, an obscure program originally meant to provide health insurance to unemployed people, from .34 percent to .75 percent, or establish a separate employer assessment based upon whether or not an employer offers qualified health insurance and has a minimum uptake rate for that insurance.

The secretary would have  to consider the following in developing any assessment:

  1. how much the employer pays toward the employee’s insurance;
  2. how many employees they have;
  3. whether or not their employees are Massachusetts residents;
  4. how many employees are part-time
  5. whether or not their employees have access to health insurance through different private sources, like parental, spousal, veteran’s, or Medicare, for example.

Governor Baker originally proposed a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, and that do not make a minimum contribution of $4,950 annual contribution for each full-time worker. If 70 percent of a company’s employees accept company health insurance, the company would be assessed $2,000 per employee for the number of employees represented by the 10 percent difference.

AIM has opposed the employer assessment because the growing shortfall at MassHealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable largely to problems arising from the federal health care reform. Federal reform made access to health insurance an entitlement based on expanded income eligibility and significantly expanded the roles of people on Medicaid.

The full Senate will vote on the Medicaid assessment proposal and the rest of its Fiscal Year 2018 budget blueprint later this week. House and Senate will then meet to work out differences.

 

Topics: Health Care Costs, Massachusetts senate, Employer Health Assessment

House Establishes Process to Study Health Assessment

Posted by Katie Holahan on Apr 10, 2017 1:08:24 PM

The Massachusetts House Ways and Means Committee wants the Baker Administration to examine the assumptions underlying its controversial proposal to have employers pay for a shortfall in the MassHealth program.

StateHouse-resized-600.pngThe proposed Fiscal Year 2018 budget released by the committee today would create a six-month review of the $2,000-per-employee “Fair Share Assessment” that the administration included in its own budget proposal in January.

The House plan would require the administration to conduct public hearings and determine the potential effect of the assessment on small business. It would also limit the definition of a full-time employee in any assessment by excluding temporary and seasonal employees.

Perhaps most importantly, the House envisions that any assessment would generate $180 million instead of the $300 million initially projected by the administration. MassHealth is the commonwealth’s Medicaid health-insurance program for low-income people.

“The issues surrounding the MassHealth deficit and the proposed employer assessment are extraordinary complex. We believe the House proposal lays out a prudent process for reviewing the issue in a manner that will allow AIM to continue its ongoing discussions with lawmakers and the administration,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The administration’s plan would impose a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, and that do not make a minimum contribution of $4,950 annual contribution for each full-time worker. If 70 percent of a company’s employees accept company health insurance, the company would be assessed $2,000 per employee for the number of employees represented by the 10 percent difference.

The employer assessment represents an expansion of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act (ACA). 

The House Ways and Means budget will require the administration to consider the following factors in developing any sort of health-care assessment on businesses in Massachusetts.

  • What a reasonable utilization (uptake) rate might be by reviewing other entities, such as the Group Insurance Commission;
  • Whether employees receive premium assistance through MassHealth;
  • Whether employees receive primary MassHealth benefits;
  • Whether employees receive insurance from other, non-MassHealth sources (spousal; parental; veterans);
  • Whether employees are residents of the commonwealth (and thus eligible for MassHealth);
  • What average Massachusetts employer contribution rates might be.

The review of the proposed assessment would involve multiple state agencies, including the Executive Office of Health and Human Services, the Department of Revenue (DOR), the Health Connector, the Division of Unemployment Assistance, the Center for Health Information and Analysis, and MassHealth.

A public hearing on proposed regulations must be held by the first week in October 2017.

The administration would be required to implement all regulations relative to an assessment by November 1. Full implementation of any resulting policy would occur on January 1, 2018. A small-business impact statement must be filed.

AIM has opposed the employer assessment because the growing shortfall at MassHealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable largely to problems arising from the ACA. Federal reform made access to health insurance an entitlement based on expanded income eligibility and significantly expanded the roles of people on Medicaid.

The House budget would require the administration to seek an ACA waiver that would allow the original prohibition to be reinstated.

Topics: Health Care Costs, Massachusetts House of Representatives, Budget

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

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