Medicare payment boost in Massachusetts prompts angry letter to Obama

A group of 21 hospital associations says that one provision of the Affordable Care Act is going to cost them billions--and they're asking the White House for help.

A 20-state coalition sent a letter to President Obama this week arguing that a provision that allows hospitals in Massachusetts to boost their Medicare payments is unfairly upping fees for other states, The Hill reported.

Sen. John Kerry (D-Mass.) added the provision to the healthcare law in 2011, despite criticism from former Obama Medicare Director Don Berwick. The provision works like this: Urban hospitals must be paid the same amount as rural hospitals, but Massachusetts has only one rural hospital on Nantucket Island, therefore setting the floor for every hospital in the state.

This is problematic because of Nantucket's high cost of living and high Medicare payments, driving up payments for every other hospital in the state. The provision makes it so hospital payments would come from a national pool.

"Scarce Medicare funding should reward value and efficiency in healthcare, not be diverted based on manipulation of obscure payment formulas," the letter to Obama reads.

The authors of the letter said Massachusetts gets about $367 million per year from outside the state, and over the next 10 years, that amount would increase to roughly $3.5 billion. In August 2011, when Medicare issued the inpatient payment regulation, a select few states came out on top, including Massachusetts reaping $275 million in reimbursements--at the expense of others. 

Meanwhile, Kerry supported the change, and defended it by saying Massachusetts had taken a big hit under original Medicare legislature; he said the state was being paid back by the new rules.

"It's a zero-sum game. What Massachusetts gets comes from everybody else," Berwick told the Boston Globe.

To learn more:
- read The Hill article