NCPA - National Center for Policy Analysis


July 17, 2009

Boston Medical Center on Wednesday filed a lawsuit against the state of Massachusetts claiming the state lowered payments to hospitals that treat low-income patients and Medicaid beneficiaries as a way to help fund its near-universal health insurance law, according to the New York Times.

Since the law took effect three years ago, just 2.6 percent of the state's population remains uninsured, compared with the national average of 15 percent.  However, ballooning costs and the economic recession have created more problems than supporters of the law anticipated, says the Times.  State lawmakers already are making cuts to the program as they struggle to finance health insurance subsidies for low-income residents.

According to the lawsuit:

  • Boston Medical Center faces a $38 million deficit for the fiscal year that ends in September -- its first loss in five years.
  • The hospital claims that its losses will total more than $100 million in the next fiscal year because the state has lowered Medicaid reimbursement rates and does not pay "reasonable costs" for treating other low-income patients.
  • Boston Medical Center is reimbursed 64 cents for each dollar it spends treating low-income residents; currently, about 10 percent of the hospital's patients are uninsured, down from about 20 percent before the law took effect, but many more patients are enrolled in subsidized Commonwealth Care or Medicaid.

"We believe in health care reform ... but it was never, ever supposed to be financed on the backs of the poor, and that's what has happened in Massachusetts," says hospital CEO Elaine Ullian.

State officials say that Boston Medical Center received $1.5 billion in state funds over the past year and suggested that the hospital could reduce costs by improving efficiency.  State Health and Human Services Secretary JudyAnn Bigby says, "At a time when everyone funded and served by state government is being asked to do more with less, BMC has been treated no differently," adding, "We are confident that the administration's actions in this area comply with all applicable law and will be upheld."

Source: Amy Goodnough, "Massachusetts in Suit Over Cost of Universal Care," New York Times, July 15, 2009.

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