Massachusetts hospital sues state over cost of universal care

Jul 16 2009

"A hospital that serves thousands of indigent Massachusetts residents sued the state on Wednesday, charging that its costly universal health care law is forcing the hospital to cover too much of the expense of caring for the poor," according to the New York Times.

The Times reports: "The hospital, Boston Medical Center, faces a $38 million deficit for the fiscal year ending in September, its first loss in five years. The suit says the hospital will lose more than $100 million next year because the state has lowered Medicaid reimbursement rates and stopped paying Boston Medical 'reasonable costs' for treating other poor patients. ... The central charge in the suit is that the state has siphoned money away from Boston Medical to help pay the considerable cost of insuring all but a small percentage of residents. Three years after the law's passage, Massachusetts has the country's lowest percentage of uninsured residents: 2.6 percent, compared with a national average of 15 percent."

The Times notes: "Low-income residents, who have benefited most from expanded access to health care, receive state-subsidized insurance, one of the most expensive aspects of the state plan. But rapidly rising costs and the battered economy have caused more problems than the state and supporters of the 2006 law - including Boston Medical - anticipated. According to the suit, Massachusetts is now reimbursing Boston Medical only 64 cents for every dollar it spends treating the poor. About 10 percent of the hospital's patients are uninsured - down from about 20 percent before the law's passage in 2006. But many more are on Medicaid or Commonwealth Care, the state-subsidized insurance program for low-income residents" (Goodnough, 7/15).

The Boston Globe reports: "The lawsuit could influence the national debate on healthcare by warning of the potential repercussions for hospitals that treat the poor" (Kowalczyk, 7/16).