Hospitals want new Medicaid cash faster

Give us the money now.

That's what Massachusetts hospitals are saying to state lawmakers. They stand to gain an extra $500 million in payments for Medicaid services during the first three years of the healthcare reform bill that became law last month. The first additional payments totaling $90 million are slated to start Oct. 1 -- the beginning of the fiscal year for most hospitals -- but the Massachusetts Hospital Association wants to move them up to July 1, the start of the state's fiscal year.

Medicaid money compensates hospitals for providing care to low-income and disabled residents. Hospitals have long complained that it doesn't fully cover the expense of their services.

``Below-cost payments to hospitals have been something of a MassHealth tradition," said Paul D. Wingle, a spokesman for the association, referring to the state Medicaid program. ``Hospitals are grateful for the corrective course set by the health reform law, but given the long pattern of underpayment, we'd like to speed up the timing of fairer payment."

The association is trying to get the measure included into what is called a technical correction bill to the healthcare reform law. When complex bills are passed, lawmakers sometimes find discrepancies in language and other details that must be corrected. Those problems are typically handled in a technical correction bill.

Lawmakers said the change the hospitals are asking for is unlikely to gain traction in the Legislature, and isn't in the spirit of a technical correction. Two lawmakers involved in crafting the compromise healthcare bill said the request would more likely reopen settled issues than correct minor errors.

``There are parties that didn't get all they want that are trying to make substantive changes," said State Representative Patricia A. Walrath , Democrat of Stow, a member of the conference committee that crafted the final reform bill.

``I don't think any of us would be interested in reopening something of consequence. Technical corrections are quite narrow."

``The hospital fiscal year starts in October," Walrath added. ``That's why we did it the way we did."

State Senator Richard T. Moore , Democrat of Uxbridge and chairman of the Health Care Finance Committee, said he doubts the payment schedule will be accelerated.

The healthcare reform bill is intended to extend insurance to the approximately 500,000 state residents who lack coverage. It includes penalties for people who can afford health insurance but don't buy it, and incentives for businesses to offer coverage to employees.

Part of the landmark law is a gradual increase in Medicaid payments to Massachusetts hospitals. State hospitals say payments from the program -- jointly run by the state and federal governments -- only cover 80 to 90 percent of the cost of providing Medicaid services. They contend that underpayment leads to inflated premiums for those with insurance.

Besides the $90 million in the year starting Oct. 1, the law stipulates that hospitals will receive another $180 million in the second year and $270 million in the third year.

Part of the money is earmarked to boost physician pay.

Joe Kirkpatrick , vice president of healthcare finance and managed care policy for the Massachusetts Hospital Association, said the change in payment schedules is fair because the reform law makes more people eligible for Medicaid services on July 1.

``We want to hit the ground fast on those 80,000 new MassHealth enrollees," Kirkpatrick said. ``If the state can appropriate the money, they can appropriate the money at the start" of the reform plan. ``Let's end the cost shift as soon as we can. It is an injustice to shortchange people."

Kirkpatrick said the group is seeking to have the change in payment schedules included as an amendment to the Senate budget bill.

Jeffrey Krasner can be reached at krasner@globe.com.