State Proposes Tweaking Health Safety Net Regulations

The Executive Office of Health and Human Services (EOHHS) has issued proposed changes to the two regulations governing Health Safety Net (HSN) eligibility and payments. The HSN fund pays hospitals and community health centers for the care they provide to uninsured and underinsured Massachusetts residents. Hospitals contribute $422.5 million annually to the HSN trust fund (Of that amount, $257.5 million is further transferred from the HSN to a MassHealth trust fund that supports other hospital payments and Accountable Care Organization investments.) If there is a shortfall between the money in the HSN fund and the cost of care to uninsured and underinsured patients, hospitals alone are responsible for covering that shortfall – that is, they must absorb the bad debt. The shortfall for FY2020 is estimated at this point to be between $80 and $100 million.
Last week’s proposed changes to the rules governing the HSN are relatively minor. But two issues remain unresolved. First, each year the state budget permits a $15 million state-funded transfer into the HSN. In FY2019, the Baker Administration fulfilled the state transfer late in the fiscal year after continued advocacy efforts by MHA and hospitals. The administration did not fulfill the transfer in FY2016, FY2017, and FY2018. MHA has requested that the FY2020 transfer occur early in FY2020 to help alleviate the expected shortfall and help hospitals with their budgeting.
Also of concern is that the FY2020 budget permits EOHHS to transfer up to $7.5 million from the HSN fund and the Prescription Advantage program to support the state share of financing the Medicare Savings/Buy-in program, which provides state and federal premium and cost-sharing assistance for low-income seniors.  MHA supports the senior assistance, but has argued that the Medicare Savings Program expansion deserves a more appropriate and sustainable state funding source.