Bill to force insurers to adjust rates, shrink payment gap

Hoping to minimize disparities in Massachusetts health rates, new legislation would require insurers to decrease rates to the highest-paid providers, using the amount saved to increase payments to the lowest-paid providers and also reduce premiums.

The bill, introduced by Massachusetts House Majority Leader Ronald Mariano, could trim about $267 million off premiums, reports the Boston Globe. His plan would force insurers to reduce payments to providers with rates in the top fifth, and raise payments to those in the bottom fifth, using a methodology that divides the state into four quadrants to evaluate rates, the Boston Business Journal reports.

Starting Jan. 1, 2012, the bill would prohibit insurers from entering into or renewing contracts with the lowest-cost providers unless they increased those rates beyond the 20th percentile of all plans, according to the Associated Press. The legislation would remain effective until Dec. 31, 2015, when the state plans to fully implement its healthcare payment system reforms.

In response to the bill, Tufts Health Plan CEO James Roosevelt told the Globe, "We have not seen voluntary movement that will produce significant short-term decreases in premiums," despite what some hospital leaders have asserted. And while officials at Blue Cross Blue Shield of Massachusetts expressed concern over the payment disparities, they said they prefer to review Mariano's bill before taking a position on it.

To learn more:
- see the Associated Press article
- read the Boston Business Journal article
- check out the Boston Globe article

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