December 19, 2007

The Massachusetts Connector Authority voted last week (Dec. 13th) to cut reimbursements for managed care providers offered through the Connector.

Is this a problem? In a word, yes. At a time when Massachusetts is trying to move hundreds of thousands of uninsured residents into health insurance and primary care settings, they are slashing payments to doctors - in other words, giving them an incentive not to treat patients covered by Connector sponsored plans.

The Massachusetts Medical Society weighs in on the problem on its blog:

The MMS is dismayed by the Commonwealth Connector Authority's reported decision to require insurers who bid on insurance products offered by the connector to cut provider payments next year by 3 to 5 percent. The reductions, voted on Thursday (Dec. 13), will be included in bid documents that will be issued early in 2008.

Until recently, the four managed care plans had offered a fee schedule above Medicaid indemnity rates for services provided to Medicaid and individuals insured through the Connector. Patrick Holland, the authority's chief financial officer, was quoted in news reports stating, "There's no justification to be paying more than Medicaid rates."

Here's one "justification" for paying more than Medicaid rates: low reimbursements are driving doctors out of the primary care system according to a July article in the Wall Street Journal, Doctor Shortage Hurts Coverage for All Plan:

The dearth of primary-care providers threatens to undermine the Massachusetts health-care initiative, which passed amid much fanfare last year. Newly insured patients are expected to avail themselves of primary care because the insurance covers it. And with the primary-care system already straining, some providers say they have no idea how they will accommodate an additional half-million patients seeking checkups and other routine care.

State officials have acknowledged the problem. "Health-care coverage without access is meaningless," Gov. Deval Patrick said in March.

Coverage without access is meaningless - but, as the Connector faces rising costs, policymakers are falling back on the time-honored tactic of price controls to try and reign in spending.

This doesn't bode well for the future of the Connector experiment.

Posted by Paul Howard at December 19, 2007 10:53 AM

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