State gains approval for big Medicaid overhaul

Baker administration secures waiver worth $52b over 5 years

THE FEDERAL GOVERNMENT today approved a huge infusion of money to Massachusetts and big restructuring of the state’s Medicaid program, known as MassHealth.

The five-year $52.4 billion waiver is major win for the Baker administration, and especially for Health & Human Services Secretary Marylou Sudders and Medicaid director Daniel Tsai.

The new waiver will preserve vitally important federal funding for the state that is directed toward the safety net and vulnerable populations.  It will also result in significant restructuring of MassHealth in line with directions encouraged by the Obama administration and the Affordable Care Act, particularly the establishment of so-called accountable care organizations in MassHealth.  ACOs are a new system for health care delivery and payment designed to make providers fully responsible for all aspects of a patient’s care under a set budget and to move away from the fee-for-service model that rewards providers for the quantity, not quality, of care.

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Details of the waiver process and the state’s proposed reforms were laid out here in the new fall issue of CommonWealth.

MassHealth will look strikingly different five years from now, and this new agreement is the start and the major step forward.