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Healthcare Reform – What’s Next in Your State, and Are You Ready for It?

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By Michael O’Brien

This summer we have already seen the Supreme Court strike down part of the Affordable Care Act. Several state governors indicate they are not going to increase their state's Medicaid rolls to be able to qualify for additional federal dollars. And, the running mate for the Republican presidential nominee is the member of Congress who is most vocal on Medicare reform. That would be a big year, let alone crammed into eight weeks. What else could possibly happen this summer?

If you operate in Massachusetts, you already know. And since we know what happened the last time Massachusetts led the nation with a major healthcare initiative, you should be asking, "Am I ready if this comes to my state?"

If what comes to my state? On Aug. 6, 2012, Massachusetts Governor Deval Patrick signed Senate Bill 2400 (S. 2400) into law. If you were tracking that legislation, you would know that S. 2400 was actually most recently S. 2270 and H. 4127 and had a few other bill numbers before that. You might also know that it was one of 173 bills in the Massachusetts General Court aimed at controlling healthcare costs.

What does it do? The bill aims to rein in healthcare costs through a mix of innovative policy changes, regulatory control and rule enforcement. The goal is to limit total healthcare spending to at or below the rate of growth of the state's gross domestic product. The savings are projected to be as high as $200 billion during a 15-year period. Among the highlights of S. 2400 are:

1. A dramatic move from fee-for-service based healthcare model for Medicaid and other state-financed healthcare systems to test other potentially cost-saving alternatives such as a yearly flat fee or bundling of services.

2. Encouraging hospitals and doctors to form “accountable health organizations" (ACOs) to further develop and test innovative fee-for-service alternatives.

3. Creating a commission that monitors healthcare providers and insurers rates and proposed rate increases above the target growth rate.

4. The commission can impose penalties of up to $500,000 on rate and premium increases deemed excessive.

5. Requiring healthcare providers to report cost trends and quality measures.

6. Providing $60 million in funding for programs focused on reducing obesity, diabetes, asthma and other chronic diseases.

7. Providing $30 million in funding to speed the move to electronic records.

Massachusetts' S. 2400 is just one of the bills that passed state legislatures this year that will impact surgical care centers, though certainly one of the biggest. You can easily see potential cost increases in reporting and compliance – but also opportunities for savings by leading the move from fee-for-service care.

Now you may be asking, out of joy or fear, "Is this coming to my state?". As I said before, we know what happened the last time Massachusetts passed major healthcare reform. A quick search on any bill tracking service will bring up hundreds of bills that mention fee for-service (nearly 500) or healthcare reform (more than 700), so the trend is moving that way.

What can you do about it? Keep an eye out for legislative and regulatory changes in your state through a tracking service or your state legislature's website. Get involved in your state and national associations. They help tell your story, but you are your own best advocate. Educate your lawmakers and regulators whenever you can. Tell them about innovative projects you are undertaking or would like to undertake (and then tell them if legislative or regulatory changes are needed to help you take that next step). Most importantly, make sure you are prepared to take advantage of these legislative changes to provide a competitive advantage for your surgical center or practice.

Michael O’Brien is a business development consultant for LegiNation and founder and principal of MOB Advocacy, a multi-state government relations firm. He has more than 10 years experience in state and local government relations working with corporations, national trade associations and nonprofits on issues related to healthcare, education, agriculture and the environment. Visit www.billtrack50.com for an easy, free way to stay updated on legislative efforts in your area.

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