Massachusetts Special Commission Proposes Abolition of Traditional Fee-For-Service Health Care Payment Model and Adoption of Global Payments

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On July 16, 2009, the Massachusetts Special Commission on the Health Care Payment System (“the Commission”) released its final report, in which it recommends abolishing the traditional “fee-for-service” (“FFS”) payment model for all public and private payers in Massachusetts, and replacing FFS with a “global payments” model. Under a global payments model, health care providers would be compensated prospectively for most (or all) of the care their patients will receive over a set contractual period. As Massachusetts would be the first state in the nation to eliminate FFS for both public and private payers, this proposal would, if implemented, constitute a significant change in how health care is delivered and reimbursed. Additionally, the Massachusetts payment reforms could provide a model for national payment reform initiatives. Understanding the Commission’s recommendations is therefore crucial for anyone involved in the health care, insurance, biotechnology, or drug and device sectors.

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