Mass. insurers urge state to reject Boston Children's $1 billion expansion - Modern Healthcare

By: Maria Castellucci

The Massachusetts Association of Health Plans, a lobbying group that represents 17 health plans, has urged state regulators to reject a $1 billion expansion of Boston Children's Hospital. 

In a letter this week to the state's public health commissioner, Monica Bharel, the association said it's concerned Boston Children's expansion will increase healthcare costs throughout the state because it will boost the hospital's market share. 

Boston Children's currently accounts for 46% of all pediatric discharges throughout the state. That number is expected to rise to 55% after the expansion, according to the association. 

The expansion "will ultimately increase healthcare costs in the commonwealth by shifting care from other Massachusetts pediatric providers to these higher cost facilities,” the group wrote in the letter. 

Boston Children's responded to the letter with a prepared statement, “As MAHP seeks to derail Boston Children's efforts to meet demand for complex clinical care, it would be interesting to know if they surveyed their member plans about the wisdom of undermining access to this world-class care.” 

The state's Department of Public Health supported the expansion last week but with conditions. A spokesperson for the agency said in a statement that examining the impact the expansion will have on healthcare costs "has been a major focus of the department's monthslong assessment of Children's expansion and renovation proposal." 

The agency said the hospital could face up to $27 million in fines if it raises prices for consumers and insurers by more than 3.6% a year, and if it doesn't maintain services for children on Medicaid, the Boston Globe reported.

The opposition from the Massachusetts Association of Health Plans comes on the heels of a report last week from the state's Health Policy Commission that expressed concern the expansion could inflate healthcare costs. 

Boston Children's has among the highest commercial and Medicaid prices in the state for hospital care, the commission wrote. The office expects in-state referrals to the hospital will only grow after the expansion, increasing spending for commercial payers by $8.5 million to $18.1 million annually. 

In a statement, Boston Children's denied the claims made by the commission, and said “The data used by (the Health Policy Commission) is flawed and misleading. Even if (the commission's) worst case scenarios play out, the cost impact would equal a 0.033% increase in costs to Massachusetts consumers.” 

The hospital has also reinforced that the expansion is not an effort to draw more inpatient referrals but patients from out-of-state and internationally. 

Boston Children's is one of the largest pediatric medical centers in the nation with 395 beds. The proposed expansion includes the construction of a new 11-floor clinical tower, expansion of the cardiovascular program and more intensive-care unit beds. The expansion will add 71 new beds and four operating rooms. 

The hospital said in the statement that the expansion is “essential” to meet a growing demand for complex care. 

The Massachusetts Public Health Council will vote Oct. 20 on whether or not to approve the expansion.