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The "Green Glue" of Massachusetts Health Reform

Posted by John McDonough  December 21, 2011 08:15 PM

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As obscure as it sounds, the three-year renewal of the Massachusetts Medicaid Waiver, announced yesterday, is a "big ... deal" to paraphrase Vice President Joe Biden. The waiver is the essential glue that holds together the Massachusetts health reform project -- no waiver, no health reform. And because the waiver is really about money, federal money and lots of it, I refer to it as the "green glue" of MA health reform.

The details are impressive. $26.7 billion over three years, a $5.69 billion increase over the prior waiver, and bringing $13.3 billion federal dollars to the state; $120 million for safety net hospitals such as Boston Medical Center (BMC) and Cambridge Health Alliance (CHA); a pilot project to improve pediatric asthma care; a first-in-the-nation express renewal process for MassHealth, the state's Medicaid program; enhanced early intervention services for Autism Spectrum Disorders, and more.

But first, what the heck is a Medicaid waiver anyway? The answer takes a little patience.

Section 1115(a) of the Social Security Law allows states to obtain “research and demonstration” waivers from the federal government to experiment with new ways of structuring and running their Medicaid programs.  Currently, 33 states have 1115 Medicaid waivers in operation.  Arizona was the first in the early 1980s; Tennessee got a big one to launch its “TennCare” program in the early 1990s, and Massachusetts joined the party for the first time in 1997 while Bill Clinton was President and Bill Weld (remember him?) was Governor.  These waivers are time limited, usually for 3-5 years, and renewable if the U.S. Department of Health & Human Services and the state can agree. 

 

Though federal law requires that all 1115 waivers be “budget neutral” for the feds, there is substantial wiggle room.  Massachusetts got a lot of wiggle in its first 1997 waiver that included a special source of funding the safety net hospitals; by 2004, that special funding had grown to $385 million extra per year for Massachusetts. 

 

When the George W. Bush Administration told MA Governor Mitt Romney in 2004 that they were going to stop the extra payments when a new waiver took effect in 2005, Romney and the late U.S. Senator Ted Kennedy went to town to convince the Bush Administration to allow Massachusetts to keep the extra money, though switch it from supporting safety net hospitals to paying instead to help MA uninsured residents purchase health insurance.  Thus was born the 2006 MA health reform law (aka “RomneyCare”) – engineered by a Republican President, a Republican Governor, a Democratic US Senator, and a Democratic-controlled State Legislature. 

In his final year as president, George Bush renewed the waiver in 2008 for three years, ending June 30, 2011.  Yesterday's renewal announcement comes nearly six months after that expiration of the prior waiver, as the Obama and Patrick Administrations tussled about important details, particularly the continuation of additional funding for BMC, CHA and the other smaller safety net hospitals. 

 

There is an important and unnoticed parallel between this new waiver agreement and the 2005 brand.  In 2005, Romney signed a deal with the feds that put a gun to the state’s head to pass the 2006 health reform law.  If no health reform law had passed, the state would have forfeited more than $1.1 billion in federal safety net dollars.  The 2011 waiver lacks the drama of the gun, but the new conditions commit Massachusetts to:

 

“… support investments in health care delivery systems that will support payment reform, and transition away from fee for service payments toward alternative payment arrangements that reward high-quality, efficient, and integrated systems of care. … The Commonwealth is required to define the specific initiatives that will align with the following four categories: developing a fully-integrated delivery system, improving health care outcomes and quality, payment transformation to value-based purchasing, and population-focused improvements.”

 

The above is completely in sync with the letter and spirit of the Affordable Care Act as it relates to reform of the nation’s health delivery system.  It is also in sync with Governor Patrick’s health payment reform legislation – and it places significant additional pressure on the MA Senate and House of Representatives to adopt some form of the Governor’s payment reform vision.  Not as dramatic as the 2005 gun to our head, though very much in the same direction and intent.

 

Kudos to Governor Patrick, Health & Human Services Secretary Judy Ann Bigby, Senator John Kerry (“This is the result of one hell of a team effort,” he noted), Cong. Ed Markey, Jim McGovern, Mike Capuano, and Bill Keating.  Special kudos to Donald Berwick, the former Administrator of the U.S. Centers for Medicare and Medicaid Services, and his successor, Marilyn Tavenner.  And a shout out to the CMS Medicaid chief, Cindy Mann, a former Massachusetts resident, and one of the nation’s most passionate Medicaid advocates.

 

This new waiver ends on June 30, 2014, six months after the full-throated launch of the ACA’s coverage expansions.  Much bigger changes will come in the next version – it will be done during Deval Patrick’s final year as Governor; will his negotiating partner be Barack Obama or one of the Republican contenders?  Big question and bigger consequences.
This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About the author

John E. McDonough is a professor of practice at the Harvard School of Public Health. He is the author of the book “Inside National Health Reform”, published in 2011 by More »

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