HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Saturday, February 13, 2010

Will Massachusetts Cap Hospital, Doctor Rate Increases?

Massachusetts now has at least some form of health coverage for most of its citizens. The next step is to try to figure out what to do about the rapid rise of health costs. Jacob Goldstein of the WSJ Health Blog reports that

[t]he latest proposal comes from the state’s governor, Deval Patrick, who yesterday proposed a bill that would give the state the power to review — and, in some cases, reject — rate increases by doctors and hospitals.

Here’s a key paragraph from the bill:

Any contract under which provider payments increase by an amount in excess of the applicable Consumer Price Index for Medical Care Services shall be presumptively disapproved. The division may conduct a hearing on any contract that is presumptively disapproved and will approve or disapprove the contract based on its findings following the hearing.

The bill would also allow the state to prevent health-insurance plans sold to small businesses from raising premiums by more than 1.5 times the rate of medical inflation, and impose a two-year moratorium on lawmakers mandating new health benefits that plans must cover (those mandates drive up costs).

The Boston Globe said reaction “was mixed, with small business groups expressing cautious optimism, insurers saying the measures do not go far enough, and health care providers worrying that smaller hospitals could be disproportionately harmed and that some might have to lay off caregivers.”

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