A Massachusetts agency providing health insurance to nearly 450,000 beneficiaries voted unanimously to support limiting its payments to the state's biggest hospitals in an attempt to cut healthcare expenses, The Boston Globe reports.
The Group Insurance Commission, which spends more than $2 billion annually on the coverage, looks to cap its payments at 160 percent of what Medicare pays. As a result, some of Massachusetts' largest and highest-priced hospitals — like Boston-based Partners HealthCare, UMass Memorial Health Care in Worcester, Mass., Boston-based Dana-Farber Cancer Institute and others — would see a decrease in payments.
Lynn Nicholas, president of the Massachusetts Health and Hospital Association, said the payment caps could negatively affect stressed hospitals and cause job cuts. Additionally, UMass Memorial spokesperson Tony Berry said in a statement to Boston Globe the caps "may negatively impact access to services for GIC members, as many providers will likely choose not to accept GIC."
However, Roberta Herman, MD, executive director of GIC, said the agency's expenses could increase 10.2 percent in the next fiscal year if nothing is done to curb costs.
"Despite valiant efforts, prices in Massachusetts continue to grow at an unsustainable rate, and the gap between providers has widened," Dr. Herman told Boston Globe. "Something is required to mitigate that."
GIC is the largest insurer in Massachusetts and is funded by taxpayers, and changes such as increasing deductibles and new plan designs could limit costs to a 3.6 percent increase, according to the report. GIC anticipates $50 million to $100 million in sayings annually from the proposed caps.
Officials plan to include the proposal in Massachusetts' Gov. Charlie Baker's (R) annual budget, which is due Wednesday and begins July 1 after it passes through the legislature.