Community Hospitals File Lawsuit Against Commonwealth of MA
(Boston, MA) Six community hospitals (Berkshire Medical Center, Brockton Hospital, Cape Cod Hospital, Holyoke Medical Center, Merrimack Valley Medical Center and Quincy Medical Center) are suing the Commonwealth for millions of dollars in unreimbursed payment for healthcare services delivered to residents in communities that stretch from Cape Cod to the Berkshires.
The hospitals are known as “disproportionate share hospitals” (DSH) because at least 63% of their patients are covered by public insurance. While healthcare reform has brought the state closer to universal coverage, the unintended consequence of that success is many DSH hospitals are experiencing significant shortfalls in payments as they treat additional patients whose public insurance doesn’t cover the full cost of care.
Plaintiffs in the lawsuit are Berkshire Medical Center in Pittsfield, Signature Healthcare Brockton Hospital in Brockton, Cape Cod Hospital in Hyannis, Holyoke Medical Center in Holyoke, Merrimack Valley Hospital in Haverhill and Quincy Medical Center in Quincy. The lawsuit will be filed Tuesday, December 1.
The hospitals claim that the state has violated a law requiring financial reimbursement equal to the costs of providing care to Medicaid recipients. The hospitals say that the state has set Medicare, Medicaid and other reimbursement rates so low that many of them are facing severe financial distress as they fulfill their state mandate to care for more and more individuals covered by public insurance.
“The community hospitals involved in this lawsuit are unfairly bearing the cost of healthcare reform. The under funding at Merrimack Valley Hospital in Haverhill and at the other hospitals is a significant detriment to serving our patients and community. All disproportionate share hospitals deserve fair and equitable treatment with respect to healthcare reimbursement," said Michael Collins, chief executive officer of Merrimack Valley Hospital.
According to the suit, cumulative state cuts to Medicaid (the state’s MassHealth program), and an additional capping of hospital payments last December, have left the hospitals with a combined funding shortfall in excess of $70 million in just the past three years. On average, the state's Medicaid program has paid only between 40% and 86% of the costs of providing care to the elderly, low income, and uninsured populations it is supposed to cover.
"The Commonwealth made a commitment to provide access to health care for all citizens but we cannot do that at the expense of these vital community hospitals," said State Senator Michael Morrissey. "We all know that resources are tight but there has to be a way to protect these safety net hospitals that are so critical to our communities, especially if we can find a way to leverage federal dollars."
While the state has been focused on finding a solution to address a similar lawsuit brought by Boston Medical Center, the community DSH hospitals handle nearly four times as many patients covered by government insurance, as measured in patient days, than Boston Medical Center and Cambridge Health Alliance combined. The hospitals provide care for more than 1.5 million patients and handle more than 300,000 emergency care visits annually. Some of the hospitals are the only hospital within 25 miles in their communities.
The hospitals maintain that the unfunded mandates have resulted in significant financial losses as well as prevented or delayed investment in capital projects, equipment, and other updated healthcare resources for their communities.
