Health Policy Commission Report: June 19 Meeting

The Health Policy Commission (HPC) convened this past Wednesday, June 19 for its 6th meeting. Materials from the meeting are available here, and can you read on for our full update below.

The meeting opened with an update from Executive Director David Seltz, who reported on the Commission’s accomplishments thus far and highlighted the items on the packed agenda, which included voting on six separate motions: approval of the minutes from April’s meeting, acceptance of the 2014 HPC operating budget, and authorization of four recommendations from various HPC subcommittees.

First on the agenda, the Quality Improvement and Patient Protection (QIPP) subcommittee, chaired by Marylou Sudders, presented recommended regulations (slides 12-15) governing mandatory nurse overtime. The development process was comprehensive and included listening sessions, review of other state regulations (15 states already have laws on the books on this issue), and communication with stakeholders.

In short, the regulations limit mandatory nurse overtime to emergency situations: government-declared emergencies, catastrophic events and hospital emergencies. Prior to the vote, which carried unanimously, Marylou Sudders stressed the importance of the review and monitoring aspect of these regulations, and that the issue may be revisited in the future, depending on how the regulations work when implemented.

The second issue taken up by the QIPP subcommittee was the adoption of the Office of Patient Protection (OPP) regulations, 958 CMR 3.00 Health Insurance Consumer Protections (related to consumers’ appeal and grievance rights) and 958 CMR 4.00 (related to the availability of waivers for those seeking to enroll in health insurance outside of the open enrollment periods).  Jen Bosco, Director of the OPP, clarified that changes made at this time would be limited to technical ones necessary to transition the OPP from the Department of Public Health to the HPC.  However, an opportunity for public comments and a listening session to incorporate substantive revisions to the regulations will be scheduled in the near future.

Discussion centered on how appeals and grievances currently work in the Commonwealth, and what changes may occur under the ACA. The OPP receives about 400 consumer requests each year for review of an insurer denial of payment, about half of which are eventually overturned in favor of the consumer after review by one of three independent organizations contracted with the OPP. While the OPP grievance process will continue under the ACA, consumers under self-insured plans (plans currently not subject to the OPP appeals process) will now have a remedy under the ACA. Given these changes, the committee may look at this issue in the future. The motion to approve the emergency regulations carried unanimously.

The Cost Trends and Market Performance subcommittee next reported that six transactions had drawn attention as potential candidates for a Cost and Market Impact Review (CMIR) (slides 21-28). A decision is still pending for three of these cases, while two transactions will avoid review, and one transaction, the South Shore Hospital and Partners Healthcare system, will undergo a CMIR. Why the decision not to proceed with the other two? Karen Tseng, Policy Director for Market Performance at the HPC, explained:

  • The clinical affiliation among Beth Israel Deaconess Medical Center, Harvard Medical Faculty Physicians, and Cambridge Health Alliance: due to the particular nature of this transaction—a clinical affiliation—it is not expected to have the same sorts of impacts on contractual power or governance structure.
  • Merger of Cooley Dickinson Hospital and Partners Healthcare System: the Attorney General has come to an agreement with the involved parties, specifying that they cannot contract jointly for five years. This agreement materially changes the transaction, prompting the decision not to proceed with a CMIR.

The HPC board voted to proceed with its first CMIR of the Partners/South Shore merger. Karen Tseng explained that the subcommittee endorsed a CMIR of the Partners/ South Shore merger because it was expected to have consequences for governance and contractual bargaining power. Furthermore, Partners, the biggest health system in the state, already has prices significantly above average. South Shore’s prices are also higher than those of other hospitals in the region.

Commissioners weighed in, but were supportive of proceeding with the CMIR. For instance, Paul Hattis recommended soliciting specific details to justify the parties’ claims that the transaction will increase both quality and access to care, as historically, hospital mergers have not had this effect. Marylou Sudders asked that the analysis assess the impact of concentrating almost all behavioral health beds in two systems, Steward and Partners, should this transaction go through. Similarly, Carole Allen voiced concern about the future of South Shore’s pediatric offerings, particularly the rare level 3 nursery and its 24-hour pediatric emergency room, and asked the CMIR to determine whether these facilities will continue to exist after the merger.

The next update came from the Community Health Care Investment and Consumer Involvement subcommittee (slides 30-34).  David Seltz provided an overview of Chapter 224’s one-time hospital assessment, which subjects 9 hospitals across the state to a $60 million total payment to be paid in a lump sum or over the course of four years. An institution is statutorily eligible to apply for a mitigation of this assessment if it is an acute care hospital receiving more than 25% of its reimbursements from Title XIX of the Social Security Act or if its assets total less than $1.25 billion. All of the assessed hospitals except Mass General Hospital applied for the mitigation. The HPC staff recommended a 50% mitigation for the following hospitals:

  • Boston Children’s Hospital
  • Beth Israel Deaconess, Mount Auburn, New England Baptist (CareGroup)
  • Martha’s Vineyard (Partners)

Mitigation was based on the rationale the hospitals provided, the hospital’s recent financial trends, and consideration of how mitigation would impact the Distressed Hospital Fund. For instance, the committee weighed trends in operating surplus; Children’s, the Caregroup hospitals, and Martha’s Vineyard, all saw their operating surpluses decline from 2010 to 2012. Meanwhile, the three hospitals that did not receive mitigation—Brigham and Women’s, Newton Wellesley, and Faulkner, had seen large increases during this time period. These three were also the only hospitals that did not provide a rationale justifying their application for mitigation. The recommendations to provide mitigation at 50% to the above hospitals carried unanimously. The Distressed Hospital Fund will receive $2.3 million less each year for four years, the duration of the payout period.

The Care Delivery and Payment System Reform subcommittee reported on its work around Patient Centered Medical Homes (PCMH), which now account for about 10% of primary care practices in Massachusetts (slides 36-42).  Patti Boyce, Policy Director for Care Delivery and Quality Improvement at the HPC, provided an overview of the research on existing PCMH standards and practices in Massachusetts. Carole Allen discussed some key considerations moving forward, such as the level of standards, whether to build on existing national standards or build our own state standards, and the probable overlap of PCMH and ACO standards. Discussion arose about the how specialty care fits in with PCMHs and how broadly to define primary care, as specialists may assume the role of a primary care provider for certain patients. The subcommittee will continue the process of developing recommendations for the PCMH certification standards.

The final agenda item was to approve the HPC’s operating budget (slide 48) for the 2014 fiscal year. David Seltz first presented a review of this year’s expenditures, noting that the HPC had been able to save money by coordinating with sister agencies in various ways. As a final consideration, David Cutler pointed out that the new operating budget represents 0.007% of medical spending in Massachusetts, noting that the HPC will pay for itself if it can decrease costs by even that amount. The Commission unanimously approved the operating budget for fiscal year 2014 of $5,647,812, thereby concluding the meeting.

The next HPC board meeting is scheduled for July 25 from 9:30 am – 12:30 pm on the 21st floor of One Ashburton Place.  

Claudia Kraft

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