“There is a wide discrepancy between the ‘have’ hospitals and the ‘have-not’ hospitals,’’ Mariano said. “This is an attempt to focus that discussion.’’
Given the general resistance in Massachusetts to government regulation of the prices charged by medical providers, Mariano’s plan is assured to be controversial.
Lynn Nicholas, president of the Massachusetts Hospital Association, said her members acknowledge that price disparities exist in the state, as they do nationwide, but members do not believe the difference is severe enough to warrant aggressive government intervention into private contracts. She also said that cutting prices to higher-paid hospitals could force them to get rid of valuable but poorly paid services like psychiatric care.
“We believe the market is responding to new pressures [to control costs] and premiums are coming down on their own,’’ Nicholas said, citing “tiered networks’’ and other insurance plans that use premium discounts to steer patients to less-expensive hospitals and doctors.
But Mariano’s proposal is an indication of the growing impatience in some legislative circles over how long it is taking to curb rising health care costs, which government investigations have blamed in part on hospitals and doctors with market clout that demand top dollar because they can, not necessarily because they provide better care.
His plan would require insurers to reduce payments to providers with rates in the top fifth, and raise payments to those in the bottom fifth, using a methodology that compares hospitals and doctors within each of four regions of the state to one another.
Starting Jan. 1, 2012, insurers would not be able to enter new contracts with providers who fall into these two groups until their rates are brought closer to the average. The law would stay in effect until Dec. 31, 2015, when efforts to reform the state health care payment system are expected to be fully implemented.
