Hospital sues Massachusetts over its universal health law

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The Boston-based hospital that treats the greatest number of Massachusetts’ poor residents has filed suit against the state, accusing it of illegally cutting funds to the hospital as a means of funding the expansion of its universal health coverage.

JudyAnn Bigby

JudyAnn Bigby

The suit, filed in Suffolk Superior Court, alleges that JudyAnn Bigby, Massachusetts’ health and human services secretary, cut the funding to Boston Medical Center to finance its landmark 2006 health reform law.

Massachusetts’ Health Care Reform Act, watched as a possible model for national health care reform, sought to enhance Medicaid rates, but BMC says in the suit its rates have been cut. The hospital says it has not received the millions of dollars in special payments it was supposed to get over three years since the health insurance law was implemented, according to the article.

State officials questioned BMC’s need for additional funding since the hospital has $190 million in cash reserves and the state is currently experiencing a budget crisis, according to an article in the Boston Globe.

“The administration is greatly disappointed that BMC, which has received $1.5 billion in state funding in the past year, has chosen this path,” said Bigby in a statement to the newspaper. “At a time when everyone funded and served by state government is being asked to do more with less, BMC has been treated no differently.”

BMC predicts that state funding cuts will cost it $175 million in the fiscal year, starting Oct. 1, and that it will be $38 million in debt by the end of this year, its first loss in five years. The hospital blames these losses on the state, which reduced the amount BMC receives for each Medicaid patient from $12,476 per admission last year to $9,323 this year, according to the Globe.

The state’s new Medicaid rate pays for 75% of the average cost of caring for Medicaid patients in Massachusetts’s hospitals.  BMC argues that a 1991 law requires the state to pay hospitals that treat large numbers of poor patients based on each institution’s financial needs, and BMC treats 70% of Boston’s trauma cases in addition to caring for the city’s poor, according to the Globe.  The hospital also claims that the state has been paying only 64 cents of every $1 used to treat the poor at BMC.

Tom Traylor, BMC’s vice president, told the newspaper that hospital would be willing to meet state officials, although it is unclear whether they will continue negotiations now that the courts are involved.

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