Massachusetts unveils payment reform plan

Massachusetts Gov. Deval Patrick unveiled legislation yesterday that he said will reign in health care costs in the state widely regarded as the test case for national reform (Source: “Mass. gov. unveils plan to curb health care costs,” Boston Globe, Feb. 17, 2011).

While Patrick hailed the landmark 2006 health care law that is responsible for providing insurance to 98 percent of residents, he acknowledged that little has been done to contain costs.

The legislation calls for the phasing out of a fee-for-service payment system by 2015 and replacing it with one that pays doctors and hospitals in lump sums for overall patient care. The plan would also pay bonuses based on patient outcomes.
 
Participation in the new fee structure would be voluntary, but would give the state’s insurance commissioner increased power to reject premium increases that are out of line with medical costs in the region or growth in the state’s economy.