Baker administration's planned overhaul of MassHealth includes getting $1.5B from federal government

April 20, 2016

Gov. Charlie Baker's administration is planning to overhaul the $15-billion-a-year MassHealth program by moving away from a fee-for-service model and toward the use of ACOs. Beneficiaries will choose an ACO based on where their primary care doctor is enrolled. The state is negotiating with the federal government to get $1.5 billion while the state will contribute $250 million to serve as:

  • Incentive payments for providers;
  • Improvements to the way health care is delivered;
  • Services to meet social needs, such as air conditioners for asthmatic children; and
  • Payments to community-based organizations that provide behavioral health care and long-term support services.

The state amount will come from an increase in a fee paid by hospitals, with hospitals getting a corresponding $250 million annual increase in MassHealth reimbursements. Doctors can choose not to join ACOs, but won't be eligible for the extra money. The proposal would integrate physical care and mental health services by allowing the federal money to go to community-based organizations that work with health care providers. It would also require ACOs to offer substance abuse treatment. The new ACOs would be available in October 2017.
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