Health Policy Commission Begins to Begin

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The Health Policy Commission convened for the third time yesterday (1/16/13), in a packed room atop 1 Ashburton. The Commission is still mainly in the getting-up-and-running-stage, and discussion focused mostly on the Board’s responsibility to regulate the maximum cost growth level for health care costs in the Commonwealth. Executive Director David Seltz is still the sole staffer, alone in an office suit, and he only figured out his phone number a day earlier. But their Twitter account is up, at @Mass_HPC.

The place will be jumping soon. Materials from the meeting are here, and our full report is below the fold.

Board chair Stuart Altman called for reports from the four subcommittees that had been established, each of which had had organizing meetings by phone.

  • David Cutler reported from the cost trends and market performance subcommittee.  He said that the subcommittee discussed mission, organizing an open meeting for the end of January, and discussed how to measure cost trends.  No substantive decisions have been made.
  • Carol Allen reported on behalf of the subcommittee on quality control and patient protection.  Their first meeting was held immediately following the HPC meeting (details at the end of this post).
  • MaryLou Sudders reported on behalf of the delivery and payment system reform subcommittee.  She said that their first meeting will be January 30, 9:00-10:30AM, 2 Boylston, 5th floor.  They will be electing a chair and prioritizing provider registration and the administration of the grant program.
  • Paul Hattis reported on behalf of the consumer protection subcommittee.  Their first meeting will be on February 6, from 9:00-11:00AM, location TBD.  They will choose a chair and think about establishing a regular meeting date.

Altman added that each subcommittee meeting will be posted publicly and that the public can address specific questions to each subcommittee via David Seltz.

Altman then moved on to  the one-time assessment regulation.  David Seltz explained that Ch. 224 directs the HPC to administer a $225 million assessment.  From that total, $165 million will be coming from health plans and other payers. Another $60 million will be coming from hospitals with more than $1 billion in assets that receive less than 50% of its revenue from public payers.  This defines Childrens Hospital, and hospitals that are part of the Partners and CareGroup systems.

This assessment provides investment funding for many important Ch. 224 initiatives, including the distressed hospital fund, electronic health records, public health, and the operation of the Health Policy Commission.  David Seltz has posted a draft regulation online (pdf), on the HPC web page.   Next steps include filing the regulation with the secretary of state, public comment and hearing, and final approval of the regulation by the HPC during the March meeting.

Jean Yang brought up that the CareGroup hospital system has already expressed interest in applying for a mitigation from the one time assessment, permitted under the statute.  Yang also indicated that the HPC will pay careful attention to the public comment on the assessment.  Seltz reminded the panel that the assessment cannot be passed along to consumers in the form of higher premiums or other costs.

The HPC voted unanimously to advance the regulations.

Next was a discussion of cost and market impact review.  Altman reminded the board that it is a fact finding body, primarily established to uncover the forces generating increased health care spending.  Seltz added that the HPC must issue a public report on cost drivers and the health care market.  All providers and provider organizations must submit notice of any material change, including mergers, acquiring a dominant market share, and acquisition of a health plan.  The HPC will evaluate the impact of these changes on cost and the market.  Providers that are contributing disproportionately to overall health care spending may be referred to the Attorney General for investigation.  The HPC, via the cost trends subcommittee, must define certain terms, such as “material change” and “materially higher prices”.  Bigby suggested that a summary of what other states are doing in terms of health care spending and market impact would be helpful.  Sudders wants the HPC to note not just the impact on costs, but also the impact on services and loss of services—especially in the area of mental health.  Cutler reminded the HPC that this is not an anti-trust review, but rather a review of the impact on consumers because of these changes.  Altman said that he is trying to standardize the notices that providers must send to the HPC, AG, CHIA, and DPH.  HPC is not trying to overburden private industry.

Next, David Cutler presented on the projected economic growth benchmark (pdf) for 2014.  The growth target is set to potential gross state product, a defined term in economics.  Potential growth rate describes how rapidly an economy grows without recessions.  The potential growth rate steadies out the highs and lows, and so is more stable than the actual growth rate.  The potential gross state product is comprised of two calculations: real gross state product growth (how much more is a typical worker producing than they used to?) and inflation (how rapidly are prices going up?).  The potential gross state product indicates how quickly the economy is growing on average.

Greg Mennis, from Administration and Finance, then began his own presentation (pdf).  Mennis said that the 2014 projected economic growth benchmark is 3.6%.  The 3.6% reflects consensus over real growth (1.6%) and inflation (2%).  Issues for the commonwealth going forward will be to monitor real growth and inflation, account for differences in population versus workforce growth, and to maintain alignment with other processes and forecast estimates.

Altman added that the growth of health care spending usually exceeds the growth of the economy by about 1-2%.  HPC is trying to rein in this spending.  Not every part of the health care sector is pegged to the potential gross state product because some sectors need to grow faster.  Turner commented that some health care providers are reacting to the growth cap by downsizing their workforce.  This is affecting health care workers and she wondered what the governor planned to do about it.  Glen Shor, ANF secretary, deferred the question to a later time.

David Seltz then gave a staff update.  Seltz is currently the only staffer for HPC.  He is in the process of hiring a senior management team: general counsel, chief of staff, directors of various policy positions, and assistant general counsel.  A number of these positions are posted and open until January 25 on the state website.

Seltz then gave an Office of Patient Protection Update.  OPP is in the process of moving to HPC, but is not quite ready.  OPP is currently housed under DPH, and Seltz expects to extend this past February.  To comply with the ACA and not default to the national standard, changes must be made to the OPP statute.

Seltz then gave a presentation on the FY13 budget for the Commission.  Funding for the HPC will come from two sources: the one time assessment (5% of $225 million) and 23% of the gaming commission’s one time licensing fees (but not the application fees just collected this week).  For FY13, HPC will be getting at least $2.8 million from the on- time assessment but will not be getting any funding from the gaming commission.  In the future, HPC will get $19.5 million for each gaming commission license.  Because of the timing of revenue,  HPC has a cash flow problem.  Governor Patrick filed a supplemental budget to temporarily fix this problem and the HPC will be getting a total of $745,000 for FY13, in addition to non financial support from several state agencies.  Seltz estimates that $735,000 will be spent, leaving a balance of $10,000 for FY13.  The board unanimously approved the budget.

Seltz then recommended the formation of a fifth subcommittee, an Administration and Finance subcommittee.  This subcommittee will handle budgetary oversight matters such as creating a budget and setting compensation rates for HPC senior staff.  It is standard procedure for public accountability.  The ANF subcommittee was unanimously approved.  Turner, Yang, Lord, and Altman are on the subcommittee.

Lastly, there was time reserved for public comment.  Comments ranged from concern about workforce downsizing to criteria for quality measures.  The comments were well received by HPC.  HPC promised to look into all issues.


The subcommittee, chaired by Sudders, met following the main meeting. Seltz began by explaining that the subcommittee’s mandate is to reduce cost while improving quality and determine how quality is affected by Ch. 224 changes.  The subcommittee will be heavily involved in OPP’s transfer from DPH.  OPP helps consumers navigate the health care system, serves as an external review mechanism for denials of coverage, and grants waivers to allow people to enroll in coverage outside of the open enrollment period.  Seltz is looking for a director for OPP.

Everett asked if there is an end date for OPP set up.  Seltz said that there is a six week window leading up to the moment when OPP goes under HPC from DPH.  The transfer will probably happen sometime in April.  Allen asked what changes must be made to OPP legislation to comply with the ACA.  Seltz said that more guidance and information must be provided to consumers about health plans and their rights under health plans.  The statutory changes are very minor and technical, like timeline changes.  HPC must also promulgate regulations for OPP.

Sudders saw the OPP transfer as an opportunity to put out reports using OPP data and to refresh OPP.  Allen saw the OPP transfer as a way to make information more understandable to consumers.  Seltz wants OPP to be more robust.

Seltz added that the subcommittee would work on developing guidance related to the prohibition of mandatory overtime for hospital nurses, except in the event of an emergency where public safety would be compromised.  There is ambiguity around this, especially in regards to what constitutes an emergency.  Sudders said that she would like the subcommittee to work on where DOI and MassHealth are with the mental health parity regulations.  Everett said that someone has to do a thorough analysis of quality measures that are already in existence.  HPC should not pile on another set of measures and should give clinicians only one quality form to fill out.

Lastly, the subcommittee asked for public comment.  The President of the MA Nurses Association commented on the ban on mandatory overtime for hospital nurses.  She said that the ban was necessary to avoid medical error but that than ban was frequently violated due to poor planning and poor staffing.  She hopes that her organization can be helpful in remedying this.

The subcommittee hopes to have another meeting in February.
-Jessica Sanchez

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