The companies were also asked to provide documents relating to Partners’ contract negotiations and, specifically, what its Boston teaching hospitals, including Brigham and Women’s and Massachusetts General, are receiving in reimbursements, according to Globe the report. The insurance companies identified by the Globe as contacted by the DOJ were Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Healthcare and Tufts Health Plan.
Partners’ clout and ability to draw high reimbursements has placed the hospital system under scrutiny. Last year, Massachusetts Attorney General Martha Coakley launched an investigation into practices between the system and BCBS of Massachusetts. The status of this investigation is currently unclear, according to the Globe report.
The federal investigation suggests the increasing role the government is taking in scrutinizing relationships between healthcare providers and insurers. The idea that different providers can demand different rates from insurers has long been accepted, but this investigation shows that the government — at a time when driving down the costs of healthcare has become almost a political imperative — is taking a greater interest in ensuring these price variances were achieved through wholly legal behaviors.
A Globe editorial, released today, stated, “Now that the nation has embarked on a course toward universal healthcare, it is more important than ever that the government go after cost drivers in the system. In Massachusetts, that means addressing the power some hospitals have to demand rates much higher than others get for identical procedures …The market clout of Partners — and that of hospitals with geographic monopolies, like Berkshire Medical Center in Pittsfield — pushes rates up and contributes to annual increases in insurance premiums that greatly exceed the cost-of-living index.”
While the investigation is likely to raise concern among high-clout providers, Massachusetts insurers welcome the investigation. Karen Ignagni, president of America’s Health Insurance Plans, told the Wall Street Journal the investigation will draw attention to high-clout providers that essentially provide “take it or leave it offers” to insurers. This is problematic for insurers because, in Massachusetts, a state insurance regulator must approve all rate increases. This month alone the regulator has denied 235 of 274 requests for increases, according to the Wall Street Journal report.
