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September 3, 2014

Patrick: State close to health care deal with feds

State and federal officials are close to an agreement on a high-dollar health care deal, but payments to a select group of hospitals that treat higher volumes of uninsured and publicly funded patients remain an area of disagreement.

“The hard issues are as usual left to the end, but we’ll get there,” Gov. Deval Patrick told reporters Tuesday afternoon after celebrating the opening of the new Assembly Square MBTA station in Somerville.

In 2011, the Patrick administration valued the current three-year health care waiver at $26.75 billion. The waiver is critical to state health care reform efforts but also to shoring up the state budget, where health care programs often consume newly available tax dollars.

Patrick said Tuesday “we’re close” to an agreement on an extension to the state’s 17-year-old waiver with the federal government.

The governor said he has spoken directly with U.S. Health and Human Services Secretary Sylvia Mathews Burwell about the waiver, and plans to do so again.

While talks continue, the current three-year waiver has been extended three times for short stints beyond its June 30, 2014 expiration date.

Asked about sticking points, Patrick identified the length of the waiver, support for state programs, and funding levels for so-called disproportionate share hospitals, including Cambridge Health Alliance.

In testimony to state officials, Cambridge Health Alliance CEO Patrick Wardell last year emphasized the “great importance” of the waiver’s public hospital payments, calling the alliance the state’s only public acute hospital system and saying it has the highest concentration of care for Medicaid and low-income populations. He called the waiver “the cornerstone of state and federal collaboration” in the area of health care coverage and payment reform.

The state has traditionally operated with three-year waivers but this time around is asking for a five-year deal, which Patrick called “the custom the federal government has been using with other states.”

In testimony last year, Massachusetts Hospital Association Executive Vice President and General Counsel Tim Gens cautioned about the link between the waiver’s details and its length.

“A 5-year term can provide greater certainty and reduce administrative burdens, but if the waiver request ultimately results in new restrictions or outcomes that are not in the interest of the commonwealth, Massachusetts may best be served by a 3-year term,” Gens wrote in testimony obtained from Patrick aides at the News Service’s request.

Gens also urged the state to address Medicaid underpayments, a longstanding and growing concern among providers. “By curing chronic Medicaid underpayments, the commonwealth will be in the best position to successfully meet the ambitious goals of payment and delivery system reform, sustain coverage expansions under the ACA, and continue to provide high quality care to MassHealth patients,” he wrote.

The latest waiver extension runs through Sept. 12.

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