Baker asks for crossed fingers as he readies Medicaid waiver plan

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STATE HOUSE — Gov. Charlie Baker’s administration will release a comprehensive Medicaid reform proposal next week in the hopes of renegotiating a federal waiver worth billions of dollars with the Obama administration by Labor Day, before presidential politics further complicate state and federal talks.

The detailed waiver proposal will be posted for public comment on Wednesday with the intent of formally filing the plan with the U.S. Department of Health and Human Services in July, state Health and Human Services Secretary Marylou Sudders told the News Service.

Baker and Sudders have been engaged in informal talks with Obama officials over the waiver, which is required for Massachusetts to avoid losing $1 billion a year starting next summer in federal MassHealth reimbursements.

Baker, speaking with business leaders at the New England Council breakfast on Thursday morning, said he hopes to have a deal in place by Labor Day, despite the fact that current federal funding levels for MassHealth are guaranteed through June 2017.

“We are very worried about having this negotiation sort of roll through into what I think will be a very complicated political season and then a transition period and then a new administration and you have to start all over again and who the heck knows where it will be in the spring of 2017 if we haven’t gotten it negotiated by this fall,” Baker said.

In October 2014, former Gov. Deval Patrick secured a five-year deal with the Obama administration worth $41.4 billion that funded for only three years the state’s safety net care pool and many of the state’s MassHealth expansion programs for the homeless, chronic disease interventions and substance abuse prevention.

“The reason they only funded three years of it is they were grumpy about whether or not Massachusetts was as enthusiastic about the reform part of the program as they were about the revenue piece of the program, so they said, ‘Fine, we’ll give you three years on your five year waiver, but you need to come back and prove to us that you’re more serious about reform than you have been so far and if you’re not, boom, billion dollars on July 1, 2017 goes away.’ Now a billion dollars? That gets my attention. That’s a lot of money,” Baker said.

While it’s unclear if Baker will seek a new five-year waiver or if a deal will be worked out for the remaining two years of the current agreement, the administration has already moved to implement a piece of its proposal by filing in its budget a plan to accelerate the increase of an assessment on hospitals used to transition to new care delivery models this fall.

The $250 million hospital assessment starting in October has been accepted by the House and Senate in their budget plans, and would eventually come back to many hospitals in the form of higher provider payment rates. Hospitals with a greater share of Medicaid patients would stand to benefit more than those with fewer low-income patients.

MassHealth Director Dan Tsai also said in February that the administration is looking for an upfront federal investment of $1.5 billion to $2 billion in its waiver proposal to support efforts to transition to “value-based” payment models that support accountable care organizations, or networks of doctors that work collaboratively to manage a patient’s care.

Baker on Thursday said the Obama administration is “supportive” of the timeline the state hopes to operate under, but he still asked audience members to say a prayer.

“For everybody in here who’s involved in the health care space, I would appreciate it if you crossed your fingers, grabbed your rosary, said a couple of Hail Mary’s. I mean, we really need the help,” he said.

— Written by Matt Murphy

Copyright State House News Service